Apple launching new music store service - East Valley Tribune: Business

Apple launching new music store service

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Posted: Monday, April 28, 2003 12:54 pm | Updated: 1:00 pm, Thu Oct 6, 2011.

SAN FRANCISCO - It's time to buy, mix, and burn, according to Apple Computer Inc. The Silicon Valley company that angered the recording industry with its "Rip. Mix. Burn" ad campaign has won the support of all five major record labels for its new Music Store service, which makes more than 200,000 songs available online at 99 cents a download.

The service announced Monday removes several limitations that have so far reduced legitimate online music distribution to a small niche in the entertainment industry.

For example, consumers can buy songs and keep them for as long as they want, share playlists on up to three Macintosh computers, and transfer them to any number of portable iPods so they can hear their music on the road. No subscriptions are necessary, and buyers can burn unlimited copies of the songs onto CDs.

"It's not free, but it's 99 cents a song, pretty doggone close," Apple CEO Steve Jobs said. "There's no legal alternative that's worth beans."

Also, a new, thinner and lighter version of the iPod will be available this Friday in the United States. It comes with 30 gigabytes, the largest storage capacity yet for the Apple device, enough to hold 7,500 songs.

Jobs has intensely courted music industry executives, who have been leery of digital music downloads, filing lawsuits and pushing for new laws to stem the illegal copying and distribution of copyright works. That wariness has hamstrung other online music distribution models, keeping most of the best new music offline.

In contrast, Music Store includes many more songs, Jobs said, with more to be added each day. They include music by U2, Eminem and 18 other artists who have previously not allowed any music downloads.

Artists and consumers have had real concerns about how music gets sold and played. "No one is being left behind" by this distribution model, said musician Alanis Morissette in a pre-taped video shown at the Apple news conference.

Initially, it only works on Macintosh computers, but by year's end, Apple plans to make it compatible with devices using the nearly ubiquitous Microsoft Windows platform - as it did for its portable iPod music player. Then, the service could have mass appeal.

Even while the service remains limited to Macs, which comprise less than 3 percent of the desktop computing market, the segment is big enough for record labels to test a new business model for supplying music online, said Phil Leigh, a digital music analyst at research firm Raymond James & Associates.

"I think it'll change the world a little bit," Leigh said. "It'll be the first legitimate online music service that will have major brand recognition, and it's focused on portability and ease of use."

Until now, most music found online has not had the blessing of the major record labels. Millions of users are downloading free copies of songs through file-sharing services such as Kazaa - services that the recording industry have sued in an effort to stem what they deem as revenue-robbing piracy.

The Recording Industry Association of America has sued four college students who allegedly offered more than 1 million recordings over the Internet, demanding damages of $150,000 per song. Music companies also are urging other big businesses to crack down on the downloading of songs using company computers.

But their efforts suffered a major blow Friday when a federal judge in Los Angeles ruled that Grokster Ltd. and StreamCast Networks Inc., the companies that distribute Grokster and Morpheus, aren't to blame for any illegal copying that their customers do using their file-sharing software. They've vowed to appeal.

Apple is entering a market that has yet to take off. Other providers of online music to paid subscribers have drawn only about 650,000 users, analysts estimate. Pressplay, a joint venture of Sony and Universal, charges a flat fee of $9.95 a month to listen to an unlimited number of songs from the major labels. Consumers who want to purchase songs to store on their hard drive or burn them onto a CD pay an extra fee of 98 cents per song.

Apple's latest efforts aren't limited to new music downloading. The company also has its sights set on Hollywood, and is promoting its products as a "digital hub" that consumers can use to play or edit movies as well as music.

The ability to make perfect copies of creative content makes entertainment industry executives nervous, but Jobs, who also runs Pixar, the animation studio behind such hits as the "Toy Story" movies and "Monsters, Inc.," has tried to bridge the divide between their world and that of the computer industry.

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