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Apple to Launch Online Music Service

Posted on: Wednesday, 5 March 2003, 06:00 CST

Apple to Launch Online Music Service

source: Associated Press Tech News

Apple Computer Inc. and major record labels are expected to launch an online music subscription service within several weeks, entertainment industry sources said.

The service would allow Apple users to buy and download digital music for their Macintosh computers or iPod portable music players, the sources said on condition of anonymity.

Apple spokeswoman Lynn Fox would not confirm whether the company was preparing to launch a music service, which was first reported Tuesday in the Los Angeles Times. Fox characterized the story as "speculation."

More than a dozen recording industry executives have seen a demonstration of the service by Apple chief executive Steve Jobs, the newspaper said. The service will use a high-fidelity format called Advanced Audio Codec, which delivers higher quality sound than the MP3 format and prevents copying between computers.

Phil Leigh, a digital music analyst at research firm Raymond James, said a subscription service was a logical step for Apple, given the popularity of its iPod portable players.

None of the three major subscription providers - pressplay, Listen.com and MusicNet - work on Macintosh computers. That leaves iPod users going to free or advertising-supported music services.

It's unclear how much Apple would charge for its subscription, or whether all five of the major record labels would participate in the service.

Pressplay charges a flat fee of $9.95 a month to listen to an unlimited number of songs from all major labels. Consumers who want to purchase the songs to store them on their hard drive or burn them onto a CD pay an additional fee of 98 cents per song.

"If there's a sticking point with the Apple service, it probably has to do with price and the complexity of the technology," Leigh said Wednesday.

A subscription service endorsed by the record labels would mark a major departure from Apple's popular "rip, mix, burn" campaign, which touts the ability of Macintosh computers to easily copy songs and record them to CDs. The recording industry says the campaign promotes piracy.

Online music companies said they would welcome Apple to the growing niche of paid subscription providers. Analysts say as many as 500,000 consumers pay for digital music, but millions more download songs from unauthorized file-sharing networks.

Pressplay, founded by Universal and Sony, has long been interested in a service that supports Macintosh users, company spokesman Seth Oster said. But Apple has refused to use digital rights management technology, which prevents consumers from downloading music and making CDs, Oster said.

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