APPLE CEO STEVE JOBS took the stage at the Moscone Convention center here, pronouncing a new era for digital music consumption, saying that other online music services are either illegal or unattractive.

“We were able to negotiate landmark deals with all of the major labels,” he said of the company’s newly launched iTunes Music Store. “There is no legal alternative that’s worth beans.”

Apple’s music store launch has drawn keen interest. Despite its paltry share of the home PC market — less than 5 percent — the company has set industry benchmarks before, notably with the iPod.

The iTunes Music Store is launching with a library of 200,000 licensed tracks, with participation from all five of the major record labels. In addition, the store will list exclusive tracks from 20 artists, including Bob Dylan and U2.

The songs cost 99 cents to download, carry no subscription fee and include the most liberal copying rights of any online service to date.

Jobs has been an outspoken opponent of so-called digital rights management in the past, arguing that limitations on digital music will undermine the market for legitimate content.

Songs can be transferred freely to iPod players, burned on unlimited numbers of CDs and accessed on up to a maximum of three Macintosh computers.

Songs are available only for the Macintosh running the OS X operating system and for iPod, although older versions of iPod require a software upgrade. Jobs said a version for Microsoft’s Windows operating system is in the works and expected to launch by the end of the year.

Jobs on Monday also unveiled new ultrathin iPod models, advertised as being as wide as two CDs together. The devices come with 10GB, 15GB and 30GB of storage, costing $299, $399 and $499 respectively.

The higher-end iPod versions include a new docking station to connect easily with PCs, as well as an audio out socket that can be used to connect the devices directly to home stereos.

The releases come in the wake a court ruling last week that — for the first time in the United States — handed a defeat to the record labels and movie studios a in their attempts to stamp out online file-swapping services.

A Los Angeles federal judge ruled Friday that file-trading services Grokster and Morpheus were legal technological tools, protected by law in much the same way as videocassette recorders or copy machines. The ruling did not serve as an endorsement of copyright infringement that takes place using that software, but will certainly make it harder for copyright holders to put a rein on the services.

Apple’s service breaks from the pack of most recent digital music services, which have offered large or unlimited amounts of music — although with restrictions on how or where it can be used — for a single monthly fee.
The subscription model has been seen by many analysts as one potential response to file-swapping services such as Napster and Kazaa, where a vast amount of music is available for free. The subscription model allows consumers to sample new music in much the same way as they can with free file-trading networks, without having to pay for each song.

While the subscription model has been slow to pick up customers over the past year, it has begun to gain ground in recent months as record labels have allowed more music to flow into the plans and have permitted CD burning and similar features. RealNetworks agreed to buy San Francisco company Listen.com last week in a cash-and-stock deal worth $36 million in order to take over that company’s Rhapsody subscription service.

Apple’s model is more similar to earlier, largely unsuccessful plans by companies like Liquid Audio or the record labels themselves that have popped up and down over the past . Those pay-per-song services generally charged high price tags — sometimes as much as $3.99 per song — and had much smaller selection than what Apple is offering, however.

“I think 99 cents is the magic number. I think that’s an impulse buy,” said P.J. McNealy, an analyst for Gartner G2, a division of Gartner Research.

The new Mac-based service is also integrated tightly with the company’s iTunes music software and the popular iPod MP3 player, an advantage that no other music service has had to date.

Hard research on what digital music lovers actually want or do is still slim, but some information is available that indicates different computer users might use both services.

A recent study by Jupiter Research indicated that 47 percent of online consumers said they would buy a digital version of a single without copy restrictions for 99 cents online, although the study did not say how many they would buy at the price. The same study said 49 percent of file sharers would buy a single for 99 cents.

Internal metrics from Listen.com, the company that runs the Rhapsody subscription service, indicates that the all-you-can-eat plan is also popular.

According to the company, just 13 percent of its “tens of thousands” of subscribers have burned a song to CD in the last month — a process that also costs 99 cents per song, but gives the subscriber permanent access to the track. The average Rhapsody subscriber listens to about 200 different songs per month, the company said.

Apple’s flirtation with the music business took a stranger turn earlier in the month, when rumors began flying that the company was interested in buying Universal Music Group, the largest of the big five major record labels.

The company said it had not made a bid for acquisition or investment in any label, but did not rule out a future investment.

Jobs spend considerable time backpedaling from the company’s onetime marketing slogan, “Rip. Mix. Burn.” The advertising campaign angered record executives at the time, but on Monday the Apple CEO put forward an antipiracy face, criticizing free file-swapping programs.

“On the good side, (services like Kazaa) are instant gratification, showing the Net was built for music distribution,” Jobs said. “On the downside, it is stealing, and it’s best not to mess with karma.”

MSNBC.com Article

"with participation from all five of the major record labels"
Meaning you get the stuff they have already offloading to Columbia house at 11 for a penny deals

And for one low price you can get it as a lossy 128kbps MP3 file or that wondrous proprietary Apple AAC format.

The new iPod looks SMOKINGLY sweet though, I have to say, Yummy.

I believe the AAC format is a new compression method, but then again it may just be an Apple thing. :/

And that iPod is soooo BOSS!!

From what I have read yes, AAC is a better standard of compression that promises less loss, but is proprietary to Mac and not usable by Wintel machines, Linux, et al. Didn't Apple learn the hard way about limiting access to things?

Cool, didn't know that. Good point Sven!

AAC will be available for Wintel shortly. Apple is porting iTunes 4 to Wintel, though I do hope they do a better job of it than they did of Quicktime.

I am sure that they will release the codec for Linux as well.

The new iPod looks like a step backwards to me. The 'old' one is the model of efficiency and usability, though my wife seems to think otherwise. She is the anti-technology though. I certainly won't be selling off my old one any time soon.

That would be good news, Tinfoil. Now we can have Lou start up a lab and test AAC vs mp3 and his alltime favorite ogg.

Who's up on the DRM inherent in AAC? There's GOT to be some in there, it's based on mpeg4.

this is all a bit late if you ask me.. if they'd come up with it back when napster was just becoming popular and getting into legal troubles, then it would take off. but now, after people have spent years becoming accostomed to "free and now"...? it might go over with the mac user base, i'll give it a "maybe" there.. but when it comes to win9x users, forget it.

and 99 cents is still too freakin' much. for one single song at probably lower quality than a cd, and with very negligable distribution costs? puh-lease.

10 or 20 cents might be the "impulse" point, but 99..? if you drop a dime on the ground, a lot of people will leave it there. drop a dollar? everyone bends down.

but that's okay. if they can make money off the dying music industry, let 'em go for it.

slashdot.org has an article on this, ogg won hands down, or so they say. AAC is still better than mp3 though.

I agree with you ash. You made some very real points!

I read somewhere that apple has to pay the RIAA 65 cents in royalties for each song which makes charging 10 or 20 cents completely unfeasible. Of course I don't know if this is true or not.

Oh and AAC is not proprietary to apple. It is part of MPEG2 and MPEG4 and there are players that will decode AAC on windows available now. You can even buy an AAC de-/encoder for Nero.

This service sounds great, superb.

Can't wait for the Windows version however.

99 cents is dead on target .. no subscription fee, just download that new single you want, burn and share if its your choice

the store looks great, like a file-sharing service

99 cents is still too pricey in my book. You buy ten songs and you're getting a CD, and I doubt these songs are going to be CD quality.

However, most CDs at the iTunes store are 9.99 regardless the number of songs. The videos are pretty good resolution, fun and free. 128 AAC sounds as good to my ears as -alt preset standard EAC/LAME.

Sound quality of 128 AAC certainly beats the pants of 128 MP3 of most PC services!

Cheers

Wow, pop ups, I have never felt so threatened. I guess this will open the door for the industry to back up it's failing bottom line with sales of viagra, breast enhancers, faux teenie porn, and the host of other high quality products brought to our screens via the pop/bot.

Sorry wrong story apply to riaa sends warning. E

AAC has been around for a few years. It runs on windows machines and apple machines. Yes, it is better in quality to Mp3. Most players have the codec. Winamp has had it for a fair few version so far......maybe even version 2.xx but i can't remember. I can't believe spo many people here have no idea what AAC is.......but, that's the way it is. I started re encoding all my CD's into AAC format......a few years back - but why would you bother when you have OGG!!!!!! OGG is superior to both MP3 "AND" AAC. It is open source, which means no legal issues with the use of the codec. It's becoming an open source world......try OGG, and u will never turn back!!!! LONG LIVE THE SPINNING FISH!!!!

Record labels get the money...artists get a penny off every download?

think of though, if a person buys 5 albums and he like only ten songs from those albums then he's wasted $40 bucks. Buy from Itunes and you spend $10 dollars on the ten songs you like.

Saves you money