In a week Apple has managed to do more than the entire music industry in a year.
When it launched an online music service that uses its iTunes music management software, eyebrows were raised at what was seen as an attempt to distribute music over the Internet in the face of rampant piracy.
But a week after launch Apple, led by CEO Steve Jobs, had performed a digital miracle in one of the most difficult markets: convincing millions of users to pay for music they previously had for free.
“In less than one week we’ve broken every record and become the largest online music company in the world,” Jobs said.
A drawback for South Africans is that the service is only available at present in the United States.
Apple had done all the hard work before the service was launched: Jobs spent 18 months convincing the big five music labels — BMG, EMI, Sony Music Entertainment, Universal and Warner — to make 200 000 songs available for download at US99c each.
“The hardest part was to convince the labels that 99c-a-download is a legitimate business, and Apple has done that work already,” Josh Bernoff, an industry analyst at Forrester Research, was quoted as saying.
Anti-piracy campaigner Hilary Rosen, CEO of the Recording Industry Association of America, told AP that “if it weren’t for Steve Jobs’s persistence, I don’t think this would have happened”.
The industry was quick to gush about a triumph for legitimisation. Universal’s CEO, Doug Morris, called it an “over-the-top success”, while his counterpart at Warner, Roger Ames, said: “Apple has shown music fans, artists and the music industry as a whole that there really is a successful and easy way of legally distributing music over the Internet.”
The big five used their financial and legal muscle to quash the first file-sharing program, Napster, that made all this possible. But subsequent pretenders have evaded these efforts, forcing the music industry to get tougher.
But the reality is that people want to get their music online and CD sales are declining. Previous legitimate services, like Pressplay and MusicNet, have been derided for two things: they charge a monthly subscription for a song, which disappears when the subs lapse, and they are cumbersome to use.
Apple has solved both of these problems with its per-song fee and seamless integration with its iTunes software. The iTunes Music Store allows users to order their software by artist, album and self-created playlists with remarkable simplicity.
Apple timed the online music launch with the release of the third-generation version of its iPod portable music player. The size of a cigarette pack, it has a built-in hard drive (of either 10, 15 or 30 gigabytes), which can store thousands of songs and connects with the computer using a super-fast FireWire.
The latest model is almost a personal digital assistant: it can hold contacts, a calendar and notes, has an alarm clock and can play games. Apple received 110 000 orders for the iPods in the first week after they were released, while 20 000 were sold on the first weekend.
The iTunes service does have restrictions. Apart from being available only in the US, songs can only be copied to three iPods or computers and a playlist can only be burned to 10 CDs.
Despite its high profile Apple has captured only 3% to 5% of the worldwide computer market, but is key in the design and publishing industries and in education in the US.
Apple has been engaged in a long, low-intensity conflict with Microsoft, but still runs the Office productivity suite and Internet Explorer. Although Microsoft has clearly trounced it in the PC market, Apple has never given up hope and has a band of loyal supporters. One reason is that it makes the whole box — from style and hardware to software — and from this benign dictatorial position has been able to be innovative.
It would be an exquisite irony if Apple became the dominant online music player. It was the original force behind the personal computing revolution and has had a hand in most of its major innovations, including the icon-based graphical user interface most people know as Windows, the mouse, the stiffie drive and the latter’s abandonment.
Ironically, the music industry had accused Apple of aiding music piracy when it launched iTunes at the beginning of last year, as part of Job’s plan to make it a digital hub using sophisticated software to order music, photographs and other files.
An iTunes version for Windows is due at the end of the year, and music executives who expected to sell only one million songs a month are likely to extend the service to the dominant computer platform.
Meanwhile, The Guardian reports that Apple is negotiating with record labels to launch its iTunes online music download service in Europe by the end of the year following the venture’s much-hyped US debut.