ITunes Music Store

The iTunes Music Store (iTMS) is a paid online music service run by Apple Computer. Introduced on April 28, 2003, the store, with generous restrictions on the uses of songs, has since been the dominant online music service, helping the sale of iPods and proving the viability of online music sale.

Features

 * Pricing: All songs cost 99 cents (USD); most albums cost $9.99 (USD)
 * Platform(s): Mac OS X (not Mac OS Classic), Windows 2000, Windows XP, and Windows Server 2003
 * Downloading: Yes
 * Burning/Copying: Yes
 * Streaming: Not for purchase, only for previews
 * Radio: Yes (built into iTunes)
 * Format: AAC @ 128 kbit/s
 * Digital Rights Management: Up to 5 computers, unlimited CDs (7 with an unchanged playlist), unlimited iPods (formerly 3 computers, and 10 unchanged playlist burns)
 * Preview: 30 seconds
 * Trial: N/A
 * Catalog: >1,000,000 files; includes audio books; originally iTMS contained about 200,000 files
 * Features: Allowance, gift certificates, iMix (user-submitted playlists), Billboard charts, music videos and movie trailers
 * Global availability: USA, Germany, France, UK, Austria, Belgium, Finland, Greece, Italy, Luxembourg, the Netherlands, Portugal, Spain, and Canada addressed credit-card holders only

Catalog content
The store is the result of a deal with all five major record labels, BMG Music, EMI, Sony Music, Universal and Warner Bros. It also includes over 300 independent labels. It offers more than 1,000,000 songs, including exclusive tracks from more than 20 artists such as Bob Dylan, U2, Eminem, Sheryl Crow and Sting. Each song can be downloaded for 99 US cents. Free 30 second previews are available of every song. Most albums are priced at 9.99 US dollars. The user can burn songs to a unlimited number of compact discs after download.

Currently, several dozen new songs are added each Tuesday, and beginning with Moby on July 29, 2003, independent artists are now included. Apple also releases a 'Single of the Week' and usually a 'Discovery Download,' on Tuesdays, which are available at no cost for one week.

On August 10, 2004, Apple announced that the iTunes Music Store was the first store to have a catalog of more than one million songs.

The iTunes Music Store also includes over 5,000 audio books, encoded at 32 kbits/s. 90 second previews are offered for every book.

Internationalisation
Originally only Mac OS X users who had credit cards with a U.S. billing address could buy songs with the service, but Steve Jobs, the CEO of Apple, announced plans to support both Windows and international users. The Windows version of iTunes, and support for the Windows platform from the iTunes Music Store was announced on October 16, 2003, with immediate availability.

On June 15, 2004, the iTunes Music Store was launched in France, Germany, and the United Kingdom. Songs were priced at 99 Euro cents ( EUR 0.99) for France and Germany, and 79 pence (GBP 0.79) for the United Kingdom. According to an Apple Press Release, the European iTunes Music Stores sold a combined total of 800,000 songs in one week, with 450,000 of those songs sold in the UK. On October 26th 2004 nine countries were added to the iTunes Music Store in a large EU store expansion: Austria, Belgium, Finland, Greece, Italy, Luxembourg, the Netherlands, Portugal, and Spain. This extended availability to all countries in the Eurozone except for the Republic of Ireland, where the iTMS remains unavailable. These countries also pay EUR 0.99 for songs, and all these stores share the same catalog and are available only in English. The French, German, American, and British stores are localized for their respective countries and have different catalogs. On December 3, 2004 the British Office of Fair Trading referred the iTunes Music Store to the European Commission because it prevents consumers in one EU country from buying music from stores in other EU countries, in violation of EU free-trade legislation; the immediate cause of the referral was because the EUR 0.99 price charged in the Eurozone equates to 68 pence in British currency, rather than the 79 pence actually charged there. The iTunes Music Store was launched in Canada on December 1, 2004; Canadian customers pay CDN 0.99 (Canadian dollar) per song.

On November 18, 2004, Nihon Keizai Shimbun reported that Apple will launch the iTunes Music Store in Japan in March 2005, with 100,000 songs. 

Marketshare
The iTunes Music Store was the first of now many online music stores to gain widespread media attention, opening up the path for many other services to join the so-called "revolution." Fans and some executives in the music industry say that the Music Store has more attractive characteristics than previous services such as Rhapsody and MusicNet: it allows the user to legally purchase an unlimited number of songs and transfer them to the iPod, and is comparatively simple and easy to use because it is closely integrated into the iPod and iTunes product lines. Currently, the iPod is the only digital music player that works with the iTunes Music Store (however other players work with iTunes), and iTunes Music Store is the only music store available for iPod users.

The store sold about 275,000 tracks in its first 18 hours and more than 1,000,000 tracks in its first week. When released for Windows, it was downloaded more than 1,000,000 times in the first 3 days and more than 1,000,000 songs were sold in that period. On [December 15]], 2003, Apple announced that it had sold 25 million songs since the launch in April. In January 2004 at the Macworld Conference & Expo in San Francisco, Steve Jobs announced (as cited in Sellers, 2004) that an unnamed person had purchased 29,500 USD worth of music.

On March 15, 2004, Apple announced that iTunes Music Store customers had purchased and downloaded 50 million songs from the iTunes Music Store. They also reported that customers were purchasing 2.5 million songs a week which translates to a projected annual run rate of 130 million songs a year. The 50 millionth song was "The Path of Thorns" by Sarah McLachlan. 

On April 28, 2004, the iTunes Music Store marked its one year anniversary with 70 million songs sold, the clear dominance in the paid online music market and the slight profit. The store also offers hundreds of movie trailers and music videos, in an attempt to boost soundtrack sales. In the conference, Steve Jobs reiterated that the subscription service is still not the interest of customers and reported that only 5 million of the 100 million songs offered in the Pepsi give-away campaign were redeemed, which he blamed on technical problems in Pepsi distribution.

On October 14, 2004, the iTunes Music Store had surpassed 150 million songs sold. 

On December 16, 2004, Apple announced that 200 million songs were sold from the iTunes Music Store. The 200 millionth song was part of "The Complete U2" and was purchased by Ryan Alekman from Belchertown, MA, USA.

According to an Apple Press Release, the iTunes Music Store currently maintains an over 70 percent marketshare of legal music downloads.

File format
Songs are encoded using Dolby's Advanced Audio Codec at 128 kbits/s, which is considered to be equivalent to songs encoded at 160 kbits/s using MP3 or 128 kbits/s using Microsoft's Windows Media Audio WMA format. Dolby's Advanced Audio Codec, or AAC, is part of the MPEG-4 standard and QuickTime 6. Although any music player can technically play AAC files, only Apple's iTunes and iPod can play AAC files encrypted with Apple's FairPlay technology. Recently however, RealNetworks has created Harmony, a controversial technology which allows songs from its Rhapsody online music store to be played on the iPod, using Apple's FairPlay DRM.

Other online music stores primarily license Microsoft's proprietary Windows Media Audio, or WMA format.

Digital rights management
Apple's FairPlay Digital rights management (DRM) is integrated into iTunes, which manages songs purchased from iTunes Music Store. Compared with other DRM systems, it is less restrictive and visible. Users are allowed unlimited CD burns of individual songs, copying of songs to unlimited iPods and the ability to play all songs on any 5 computers, Mac or PC.

With the introduction of iTunes 4.5, Apple raised the number of machines allowed to use purchased music from 3 to 5. They also cut the number of times a user can burn CDs of the same playlist from 10 to 7. This adjustment was the result of the renegotiation Apple had with major labels.

Apple FairPlay technology, however, is not unbreakable. To convert protected files to MP3-format files, the user must burn them on an audio CD and then rip the CD back to iTunes using the MP3 encoder. This method, however, results in loss of quality. Recently, software has emerged which removes Apple's FairPlay DRM without any restrictions.

Promotions
On Super Bowl Sunday, February 1st, 2004, Apple launched a promotion with Pepsi in which they gave away 100 million songs, through tokens on selected soft drink bottle caps. Unfortunately for Apple, Pepsi failed to properly distribute the bottles to major metropolitan areas until only weeks before the promotion ended, despite a 1 month extension of the deadline by Apple. The promotion might have contributed to Coca-Cola's decision to launch a music store, albeit only in the United Kingdom, as well.

On July 1st, 2004, Apple announced that, starting with the sale of the 95 millionth song, an iPod would be given away to the buyer of each 100 thousandth song, for a total of 50 iPods. The buyer of the 100 millionth song would receive a PowerBook, iPod, and $10,000 gift certificate to the iTunes Music Store.

Ten days later, on July 11, 2004, Apple announced that 100 million songs had been sold through the iTunes Music Store. The 100 millionth song was titled Somersault (Dangermouse Remix) by Zero 7, purchased by Kevin Britten of Hays, Kansas. He then recieved a phone call from Steve Jobs personally, who offered his congratulations, as well as a 40GB 3rd Generation iPod laser-engraved with a message of thanks.

See also: Napster, KaZaA, Gnutella, Limewire

Sources and References

 * Wikipedia: iTunes Music Store
 * Sellers, Dennis. (2004). Reporter's notebook: keynote observations. Retrieved January 8, 2004 from http://www.macminute.com/2004/01/07/reportersnotebook