InvestorsHub Logo
Followers 7
Posts 2743
Boards Moderated 0
Alias Born 03/29/2001

Re: None

Saturday, 08/30/2003 10:06:23 AM

Saturday, August 30, 2003 10:06:23 AM

Post# of 93824
Learning to Live with Legal Music Services
2 hours, 27 minutes ago Add Technology - Reuters to My Yahoo!


By Lucas van Grinsven

AMSTERDAM (Reuters) - After five years of regarding one another with fear and contempt, the music and technology industries are finally rolling out services that aim to make a business out of downloading music.



Competing with free music services like Kazaa and Morpheus is not an enviable position for anyone. But with the record industry suing individual users of those services for copyright infringement, consumers will almost certainly be looking for viable alternatives.


In the last four months, companies like Apple Computer Inc., Microsoft Corp., RealNetworks Inc. and BuyMusic.com, have struck licensing deals with the world's largest record companies to begin offering alternatives that allow users to download individual songs for around $1 each.


The services all perform differently. You will be disappointed if you're looking for the wide selection that the free services offer. Some sites are easier to navigate than others. Unlike most conventional CDs, there are limitations to how many times you can copy a song you've bought. And of course, you have to pay.


"They've been designed around how the industry wants to sell music, rather than how consumers want to buy it," says senior analyst Rebecca Jennings at Forrester Research in London.


On the positive side, you can buy downloads of complete albums more cheaply than buying the compact discs in stores. In most cases, the quality and speed of downloads are more reliable -- and you won't get sued for using them.


PRICING


With much fanfare, Apple launched its pay-per-download iTunes service in late April. In its first month, it sold 3 million songs to a relatively small community of Macintosh (news - web sites) users in the United States, a tiny fraction of computer users.


In recent months, BuyMusic, which was started by Buy.com founder Scott Blum, presented itself as the iTunes equivalent for users of Microsoft Windows-based computers. RealNetworks and Microsoft followed suit shortly thereafter. America Online and Amazon.com are among those considering similar services.


ITtunes, which is only available in the United States, offers a flat rate of 99 cents-per-song, or $9.99 for an entire album.


BuyMusic.com says it offers songs starting at 79 cents each and $7.95 an album, but most songs are in the 99-cent to $1.14 range, and albums cost $9.49 to $12.79.


RealNetworks' Rhapsody sells songs for 79 cents, but only after a $9.95 monthly subscription fee.


MSN Music Club, which is mainly available in Europe, is even more convoluted in its pricing. Songs are essentially the equivalent of 83 pence to 99 pence each -- or about $1.31 to $1.56. Users cannot buy songs outright from the service. Instead they must buy "credits" that can be redeemed for individual songs. One song typically sells for 100 credits, but MSN sells the credits in bundles of 150 and up. The more credits you buy the cheaper they are.


SELECTION


Although all sites offer hundreds of thousands of tracks, many early users failed to find their favorite songs. The Beatles, for example, are not available on any online service.


R.E.M (news - web sites).'s most popular songs like "Losing My Religion" or "Everybody Hurts" are absent on BuyMusic, while MSN Music Club lacks almost all of David Bowie and Earth, Wind & Fire. More recent albums appear to be better represented.


Big names like the Red Hot Chili Peppers, Madonna (news - web sites), Metallica (news - web sites), Green Day and Linkin Park refuse to make their songs available as individual tracks. They want consumers to buy entire albums.





Where the services often provide the most value is in hits by individual artists by whom you wouldn't necessarily want complete albums. While BuyMusic came up short on Petula Clark's "Downtown," users can find such gems like "Everybody Plays The Fool" by The Main Ingredient and "Drift Away" by Dobie Gray.

TO EACH HIS OWN MEDIA PLAYER

The availability of album sleeves for printing, artist information, album release dates and the option to sample a song also differ widely between the different services. ITunes offers artwork, while MSN Music Club and BuyMusic do not.

MSN Music Club and BuyMusic often lack the option to sample tracks. MSN Music Club and BuyMusic's artist information and original release dates are missing or incorrect.

Finally, there are the limitations for customers. Songs from MSN Music Club and BuyMusic can only be played back with Microsoft's Windows Media Player, available on personal computers and built into some portable MP3 players.

Apple's iTunes only plays on its own devices, from computers to the portable iPod music player. Rhapsody plays on RealNetwork's proprietary media player.

Apple has restricted consumers to make only three copies of a song, a line followed by most other services, although BuyMusic sometimes allows unlimited copying. Rhapsody allows consumers to burn songs on a CD, but copying onto a portable music player is not permitted.

(The PluggedIn column appears weekly. Comments or questions on this one can be e-mailed to lucas.grinsven@reuters.com.)

(Additional reporting by Andy Sullivan in Washington, Reed Stevenson in Seattle and Derek Caney in New York.)



Join InvestorsHub

Join the InvestorsHub Community

Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.