War is on for online music fans

Digital online music sales are taking off, boosted by the runaway success of Apple Computer’s iTunes launched last year, so the question is, who of the many new competitors will snare the market?

Since its launch in the United States last April, iTunes has sold more than 30-million songs.

The other good news for the music business is that people buying online are not just snapping up current top hits, but are paying for a huge variety of tracks. A staggering 95% of iTunes’s online music catalogue of 500 000 tracks have sold at least once.

While this news was music to the ears of the 8 500-plus top movers and shakers of the music world who have crammed into the Mediterranean resort of Cannes for the five-day Midem international music fair, the flipside is that 2004 could see war break out between the fledgling host of new legitimate online stores due to launch this year.

Many big-name technology firms are gearing up with Apple lookalike global online stores and pocket-size digital jukebox devices including Sony’s Connect, Real Networks, Musicmatch, MyCokeMusic and Wal-Mart, while newly legal Napster is capturing large numbers of customers through its monthly subscription service. In Europe, OD2 also offers legit tracks.

A year ago the big question hanging over a global music industry reeling from the slump in sales lost to illegal internet music downloads was whether people were prepared to pay for online music.

“Now, the question is which of the many legal online music stores will really gain traction with the consumer,” music giant EMI’s John Rosen told a packed discussion forum on the eve of the Midem fair.

The battle lines between the giants look as if they are already starting to be drawn up if the messages being issued by the current big online hitters here hold true.

After Apple’s applications and internet service vice-president Eddy Cue made an upbeat pitch about sales on his company’s $0,99-per-track iTunes store, online competitor Napster warned music delegates to “stay-off the Apple platform”.

These fighting words were issued by Chris Gorog, chairperson and chief executive of Roxio, owner of the relaunched Napster paying online music service.

Gorog tried to convince music execs they should make their record catalogues available on Napster with claims that its Windows-based PC platform is compatible with two-thirds of all the mobile music devices currently available.

Both firms, however, agreed on one thing. They both promised their online stores would finally become available early this year in Europe. They laid Europe’s huge lag behind the US on big differences in music copyright practices, retail pricing and track release dates between the various European countries.

While it seems there is no question that people are becoming prepared to pay to download their favourite tracks, no one is sure how they will prefer to pay in the long run.

Napster‘s Gorog claimed that its $9,95 monthly subscription service for unlimited downloads will become the favourite payment method, while Apple’s customers are using their credit cards to pay for each 99c track on iTunes.

Credit-card payments for such small amounts could be a problem in Europe—especially with coveted teen music consumers.

But it is still early in the day of digital music, and online actors are allowed some trial and error.

Apple, for example, is trying out an online credit-card “allowance” system that parents could set up for their children.

This was introduced in October and, according to Cue, is “proving very, very popular”.

But parents might like to bear in mind one startling fact that Apple’s Cue revealed here. Apple’s iTunes biggest spending customer has rung up a staggering total of $29 500 dollars since the service began less than a year ago.—Sapa-AFP

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