3 Internationalization

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 16th, 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 ( €0.99) for France and Germany, and 79 pence (£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 [1]. On October 26th 2004 nine countries were added to the iTunes Music Store: Austria, Belgium, Finland, Greece, Italy, Luxembourg, the Netherlands, Portugal, and Spain. These countries also pay €0.99 for songs. In November 2004, the iTunes Music Store will be launched in Canada; Apple has yet to announce pricing for that market.

On November 18, 2004, Nihon Keizai Shimbun reported that Apple will launch iTunes Music Store in Japan in March 2005, with 100,000 songs. [2]

4 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 15 December, 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. [3]

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. [4] 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. [5]

According to an Apple Press Release [6], the iTunes Music Store currently maintains an over 70 percent marketshare of legal music downloads.

5 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.

6 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.

7 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 of 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 of 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

8 References

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

9 External links

• Apple: iTunes Music Store
• Wired News: Apple Launches Paid Music Service
• shumans.com: iTunes Music Store usage inconclusive
• Time Magazine: Coolest Inventions of 2003, Apple Music Store
• Fortune Magazine: iTunes Music Store named Product of the Year 2003

Online music stores Apple software

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