The Beat Goes On(Line)

TechTalk
By Ken Doyle

Competition in the online music industry has been heating up this summer. The industry’s pioneering store and current leader, the iTunes Music Store (iTMS), recently reached the 100 million mark in little over a year of operation. Although this number pales in comparison to the estimated collective 1 billion downloads per month from peer-to-peer (P2P) file-sharing services, it’s clear that the online music purchasing model is here to stay.

This is apparent from the recent entrants into the field, all vying for a slice of the Apple pie. It’s also clear that consumers are not interested in the subscription model offered by some of the early competitors to the iTMS, in which downloads are “rented” by paying a flat monthly fee, but ownership of the files is not passed on to the purchaser. As a music lover, I want to own the music I purchase, and do what I please with it—burn it to CDs, transfer it to another computer, or move it to a digital music player. That seems to be the sentiment of an overwhelming majority of audiophiles as well.

Last week, Yahoo announced its entry into the mix with its purchase of Musicmatch, best known for its digital jukebox software. Pricing for music downloads is expected to be similar to that of the iTMS.

Previously, RealNetworks made a controversial debut in the purchased-music market, after reverse-engineering the digital rights-management software used by Apple, in a questionably legal maneuver. This move by Real, after Apple had declined to let Real license the software, allows Real’s music downloads to be played directly on Apple’s iPod music player, the most popular model currently on the market. Real also ran a promotional offer for the first month, offering 49-cent downloads, in an attempt to raise interest in its offerings.

Microsoft, not to be left out, also recently announced its MSN Music Service. Downloads are priced on par with the iTMS, and integrate directly with Microsoft’s Windows Media Player, in the same fashion as the iTMS and iTunes software. A major drawback is the requirement for a .Net passport, which means divulging a slew of information to Microsoft before you can use the service.

The iTMS still enjoys almost 70% marketshare, and it’s my personal favorite due to the easy-to-use interface and integration with iTunes. It remains to be seen whether any of the other challengers can duplicate that experience. Nonetheless, competition can only be good for the consumer in the long run.