Legal action by Apple Records caused the iTunes Music Store to hit the headlines recently, but there's no denying it's been an instant success that could change the way music is distributed forever. We look at the background to the Music Store and consider its implications for independent musicians.
"The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There's also a negative side." said Hunter S. Thompson — or rather he didn't. The quote, originally from Thompson's Generation Of Swine: Tales Of Shame And Degradation In The '80s, and actually a criticism of television, has succumbed to the 'Chinese Whispers' effect over the years, having been used to describe many entertainment industries. This didn't prevent Apple CEO Steve Jobs citing it (and getting a good reaction from the audience) during his April 2003 presentation to announce the iTunes Music Store.
Described by Apple as "music downloads done right", the iTunes Music Store is a way to legally purchase and download music from the Internet that offers flexibility to the consumer, while protecting the rights of the copyright holder. The iTunes Music Store is also perhaps the first music download service to win nearly universal praise from artists, record companies and critics alike (as well as attracting a possible court case from Apple Records, over the use of the Apple name in conjunction with a musical venture). It has undoubtedly reinvigorated the interest and market for legal music downloads. But after so many companies, including many who are dominant in the fields of music or technology, have tried and failed at similar ventures, how did Apple manage to hit, if you'll excuse the pun, the right note with consumers? And how will this success affect the way music is distributed in the future?
In the run-up to Apple's special music event on 28th April of this year, there had been much speculation as to what Steve Jobs would announce. A music download service was the rumour, but this had become tangled up with another that Apple would buy the Universal record label. While Apple had indeed been in talks with Universal, the reason was actually to get the label's support and content for launching an online music store. Indeed, one of the iTunes Music Store's most impressive achievements was the deals Jobs managed to make with the 'big five' record companies (BMG, EMI, Sony, Warner and, of course, Universal), which he described as being "landmark".
One of the key problems technology companies have faced in providing online access to media, whether music or video, is in keeping both the content providers and the consumers happy with the service being offered, especially when it comes to digital rights management (DRM). Jobs talked about how applications such as Napster and Kazaa (not forgetting Audio Galaxy) demonstrated that "the Internet was built for music distribution", providing instant gratification and saving you from getting up to visit a record store, but that the downside was the fact that using these services was actually illegal.
For some time, industry commentators have pointed out that the proliferation of illegal file sharing is arguably due to the lack of legal alternatives providing the same service. Regardless of the ethics, even people who are quite willing to pay for a download are more likely to use an illegal service if it's easier and offers them greater flexibility in listening to and managing the music. At the height of Napster's popularity, for example, finding music to download really was as simple as entering a few search strings, double-clicking a few potentials, downloading and pressing play. Legal music download services, even today, are rarely that easy to use.
However, while not actively developing file-sharing technology to encourage illegal activities, technology companies like Apple can't consider themselves blameless for the increasing popularity of downloading music from the Internet. It could be argued that downloading music would be far less appealing if applications like iTunes, which make it easy to manage music files on a computer, or portable data-based music players, such as the iPod, didn't exist. And to this end, Jobs was keen to redefine Apple's original "rip, mix, burn" iTunes strategy to the more politically correct "acquire, manage, listen".
Jobs' iTunes Music Store presentation was refreshingly frank when it came to discussing the reasons people are drawn to downloading music illegally, citing five main advantages, from the user's perspective, of using file-sharing services. The first, and possibly the most important mentioned, was that file-sharing services offer a vast selection of music, "better than any record store on the planet". The next three points covered DRM, or rather the lack of DRM: the ability to burn the files to any number of CDs, and copy them to an unlimited number of MP3 players and computers. The final, most obvious point was that the files downloaded illegally are basically free, with Jobs concluding "what's wrong with this? It's fantastic!"
However, even from a technical perspective, downloading music from a file-sharing service isn't always an easy experience, and the presentation continued with a further five points that dealt with the disadvantages of downloading music illegally. Firstly, the fact that the downloading process itself is often unreliable and slow, since the speed of the service is usually dependent on the connection speed of the peer you're downloading from. Secondly, the encoding of the files you do download successfully is also often unreliable — Jobs wryly noted that "a lot of these songs are encoded by seven year-olds, and they don't do a great job". And while you can usually listen to partially downloaded files, none of the file-sharing applications offer previews of the file you're about to download. The fourth disadvantage was one of aesthetics — that album cover art is rarely available. The final one was best summed up by Jobs himself when he said "and, worst of all, it's stealing, and it's best not to mess with karma!"
Although Apple launched the iTunes Music Store based on a catalogue of music provided by the 'big five' record labels, the company was keen to point out from the start that this was only a beginning, and that they were in talks with independent labels to further boost the content available. Importantly, all parties offering content to the iTunes Music Store get the same 'take it or leave it' deal, according to some leaked information posted accidentally on the CDBaby web site, providing a level playing field for both major and independent labels — which is perhaps an indication that the ideals of music on the Internet are coming true after all? However, the deal is apparently a non-exclusive reseller agreement that addresses the labels directly, but not those involved in the production of the music, meaning that the labels are still directly responsible for distributing earnings.
For many, though, the idea of distributing music on the Internet is not just to make things fairer for any size of record label, but to allow unsigned and otherwise unknown musicians to gain exposure and find an audience. While anyone can publish their own music online, the problem is how you let other people know it's there; and if the majority of people shop on only one or two online music stores that aren't supportive of musicians not released by a label, it's hard to see how an Internet music store can be any better than a regular music store. However, on the plus side, there is at least the potential for Apple to be supportive of new talent, providing exposure for emerging artists, so it will be interesting to see if this is realised over the next year once the iTunes Music Store is fully established.
With these advantages and disadvantages in mind, the basic model for Apple's own music store was introduced. The aim has clearly been to address the disadvantages of illegal downloads, while at the same time retaining as many of the advantages as possible. However, the big downside for non-US residents at the current time, compared with downloading music illegally, is that only those with a credit card registered to a US address are able to purchase music from the iTunes Music Store, although everyone is free to browse. As you might imagine, this is due to licensing restrictions; Apple hope to launch their music store in other parts of the world later this year — though there may now be a delay in the wake of the Apple Records legal action.
Starting with the selection of music available, Apple launched the iTunes Music Store with 200,000 tracks and the promise that more would be added on a daily basis from that point. However, rather than just offering content you can already get from other sources, the iTunes Music Store also has a selection of exclusive content from over 20 artists, including U2, Eminem and Bob Dylan. More interestingly, the news broke recently that Trevor Jones' score to the movie The League Of Extraordinary Gentlemen would only be released via the iTunes Music Store in the US (with CDs available in the UK, however). This demonstrates an interesting direction and is potentially a sign of the way music distribution could change if the experiment is a success.
For DRM, Apple are using a technology they've termed as Fairplay, which is built into iTunes and QuickTime and may potentially form the basis for DRM in other areas of media distribution in the future. Tracks downloaded from the iTunes Music Store can be written an unlimited number of times to CD, although you're only allowed to burn each iTunes Playlist to CD 10 times before you have to reshuffle the tracks. This is pretty generous, and, as Jobs pointed out, few people would want to make more than 10 copies of a Playlist if it was for their own personal use. Downloaded tracks can also be copied to an unlimited number of past, present and future iPod models, and once you've downloaded the tracks to one Mac computer, you're allowed to copy them to two other Macs. If you decide to replace one of your Macs at some point, it is possible to unauthorise the old Mac and reauthorise a new Mac to play your music library.
Deciding on how to charge for music downloaded from an online service is inevitably a difficult and possibly subjective issue: after all, how much is music actually worth once you take away the physical product? Significantly, Apple decided not to base the iTunes Music Store on a subscription model, like the majority of existing online music services, such as Pressplay and Rhapsody. Jobs' reasoning was that people have always bought their music, no matter what the medium, with a fairly liberal license, and that most of the existing subscription services treated the consumer as if they were a thief, only allowing them to listen to downloaded tracks while actively subscribing, for example, or charging additional fees for CD burning. In contrast, the iTunes Music Store has a flat fee of 99 cents per song, with album downloads always being less than the cost of downloading the tracks individually.
Jobs justified the 99-cents price tag as being "pretty affordable" by pointing that most people don't blink at starting their day with a $3 Starbucks latte — in the US, at least. But the biggest problem with flat-fee pricing for every track in the shop is easily illustrated by the fact that you pay the same for the first track on Eminem's The Marshall Mathers LP, 'Public Service Announcement', which lasts all of two seconds, as you do for the Adagio in Beethoven's ninth symphony, which lasts nearly 17 minutes. To overcome this potential loophole, tracks longer than seven minutes are in most cases only available if you download the entire album, although this is perhaps determined on a case-by-case basis. However, while it's easy to criticise the flat-fee pricing, Apple calculating the price of a track based on its length would be less preferable, and '99 cents a track' is an easy concept to sell.
When it comes to providing reliable downloads, Apple perhaps have an ace in the hole since, as Jobs noted, they've been moving "oceans of bits" around the Internet for years, by providing the most popular site for watching movie trailers. And it's also worth remembering that Apple still has a stake in Akamai, a company that specialises in delivering large amounts of data around the Internet. Also, in keeping with the technology industry's 'eating your own dogfood' ethos, the iTunes Music Store is powered by Apple's own Xserve, Xraid and Web Objects hardware and software.
Last, but not least, acknowledging the final disadvantages of illegal downloading, the iTunes Music Store offers free 30-second previews for every song, plus cover art, and, something you can't put a price tag on: "good karma".
Rather than being presented in the ubiquitous MP3 format, tracks downloaded from the Music Store are encoded as 128kbit AAC files. While AAC definitely offers better-quality encoding than MP3 at the same bit rate, Jobs' claim that AAC "rivals CD quality" was maybe a little bit of a liberty. Interestingly, though, Apple have apparently gone back to the original master tapes for some tracks, meaning that those tracks could potentially sound better than a poorly remastered CD taken from a later source.
AAC (Advanced Audio Encoding) is the ISO/IEC standardised audio codec used in the MPEG-4 specification, and was jointly developed by AT&T, Dolby, Fraunhofer IIS and Sony. Using information provided by Dolby, Apple claim that "expert listeners" found music encoded at 128kbit/s with AAC to be "indistinguishable" from the original uncompressed source. Even at 96kbit/s, AAC still generally sounds better than 128kbit/s MP3 encoding. This is obviously good news for those who purchase music from Apple's music store, but perhaps the two most interesting aspects of AAC are that it supports up to 96kHz sampling rates and 48 simultaneous streams of audio. Hopefully, this will mean, as the DVD-A and SACD formats take over from CD, that the quality of downloadable music won't remain a poor relation, and that Apple will provide 5.1 content on the iTunes Music Store as soon as QuickTime includes full surround sound support.
As well thought-out as the conceptual model for the iTunes Music Store is, it would be useless if the implementation and experience of buying music from it was confused. But if there's one area in which Apple has consistently succeeded, especially in recent years, it's designing visceral interfaces and experiences, and the iTunes Music Store is arguably the best approach yet seen when it comes to purchasing and downloading music online.
The genius of the iTunes Music Store is that it's built right into Apple's popular iTunes software, and is accessed by clicking the Music Store label, just like any other Source, such as an iPod, Playlist or web radio station, which brings up a home page by default. Here you can see the latest releases, the most popular downloads, and so on, but the best thing is that you can browse the store in exactly the same way you would normally browse your iTunes library. Simply click the Browse button to navigate genres, artists or albums, or type in a keyword to search for. If you want to see every Glenn Gould track available, simply type in Glenn Gould, press return, and every Glenn Gould track available is listed, allowing you to preview, navigate to the album, or visit the discography page to show all the albums in the store. The fact that the iTunes Music Store is embedded into iTunes also means that only Mac users running iTunes 4 on OS X will be able to enjoy downloading music in this way, leaving Windows users out in the cold for the time being. On the plus side, though, Jobs also announced that the iTunes Music Store would be available to Windows users by the end of the year — again, events permitting.
As many observers have noted, for those who can purchase from the iTunes Music Store, it's an addictive experience made all the more dangerous by Apple implementing Amazon's 1-Click shopping technology. When considering the iTunes Music Store, it's worth remembering that for around five years Apple have been operating an online retail store that generates between one and two billion dollars in sales every year. A couple of years ago, Apple (still the only company to do so) announced they were licensing Amazon's '1-Click' experience, which now makes even more sense in the context of an online music store. Once Apple have your payment details stored and you're logged in, you can make a purchase simply by clicking the 'Buy Song' or 'Buy Album' button, and the track or tracks are automatically downloaded into your iTunes library.
This ease of use has helped win the iTunes Music Store praise from the industry and consumers alike. More recently, the success of the Store has spawned an imitator based on Microsoft's Windows Media Technology, www.buymusic.com, which is only available to Windows users at present and, at the time of writing, has not achieved anywhere near the level of success realised by Apple.
Despite its success and acclaim, one of the most common criticisms levelled at the iTunes Music Store is that it encourages music buyers to purchase single tracks rather than complete albums, causing some to speculate that downloadable music services will distract listeners from the concept of an album. Indeed, according to a report by the news service Reuters, bands such as the Red Hot Chilli Peppers and Metallica have refused to allow their music to be distributed on Apple's service, with the management company for both bands citing that their clients "would rather not contribute to the demise of the album format."
Metallica are, of course, a band not afraid to fan the flames of debate when it comes to their audience downloading music online. However, in the same way that Metallica arguably only helped to boost the awareness of the Napster service they so desperately wanted to close down, bands that refuse to be part of the iTunes Music Store and similar services are perhaps not doing themselves any favours in the long term. In fact, the argument that the iTunes Music Store will see the demise of the album format is questionable, given that when Apple announced the five-million-sales mark, 46 percent of these downloads had apparently been purchased as albums.
However, if the use of computers in the way consumers listen to music does cause the demise of the album format, I think it's fair to say that the blame won't lie solely with music download services such as the iTunes Music Store. Instead, it's the result of the 'acquire, manage and listen' lifestyle that electronics manufacturers are encouraging, even for those who only use a computer to manage the music they already own on CD. A cynic might therefore suggest those in the record industry opposed to single-track downloads are more mindful of the greater financial gain from album sales than concerned with musical integrity.
As mentioned earlier, although Apple do have the ability to sell certain individual tracks only as part of an album download, the Reuters article goes on to mention that they will currently only sell music via their service if the artist consents to individual track downloads. Apple haven't commented on this issue yet, but the management company for the Red Hot Chilli Peppers and Metallica also commented that they can't let a distributor "dictate" the way their artists sell their music. However, musicians have actually always been bound by the limitations of the distribution medium — after all, the distributors of a CD dictate that a single disc can only hold 74 minutes of music and should, ideally, be split into multiple tracks.
Despite the absence of bands who take the same stance as Metallica, Apple managed to sell around 250,000 tracks within 18 hours of opening the virtual doors to the Music Store. A week later, the sales had reached the million mark, a figure commentators had predicted might be achieved after a month in business, and Apple recently announced total sales of 10 million tracks. Perhaps the most amazing fact about these statistics, though, is that Apple achieved this level of sales starting with just 200,000 songs, and selling only to US-based Mac users, with a credit card, running OS X. By the year end the catalogue should be substantially larger, a Windows version may be available, and the 'rest of the world' may be able to help boost sales figures. Barring a negative outcome for Apple Computer in the courts, it's hard to see how the iTunes Music Store can fail.