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CreatorsWeb watches with increasing interest the development of digital on demand technology as it relates to music.  The following article about the itunes music store was taken in part from Wikipedia and is offered here as part of CreatorsWeb commitment to provide relevant and current information about music including the music industry and music technology.  For farther research on the subjects of music, the music industry, music downloads and digital music on demand, please refer to the numerous references  provided in this article. Thank you.

The iTunes Music Store (iTMS) is an online music service run by Apple Computer with its iTunes application. Introduced on April 28, 2003, the store, which uses DRM restrictions, has since been a dominant online music service and has proven the viability of online music sales. Sample and subscribe to thousands of free podcasts at the iTunes Music Store.

Debuting on April 28, 2003, the iTunes Music Store was the first of now many online music stores to gain widespread media attention, opening up the path for many other companies to start-up similar services. Fans and some executives in the music industry say that the Music Store has more attractive characteristics than previous services such as Rhapsody and MusicNet: it allows the user to purchase an unlimited number of songs and transfer them to the iPod, and is comparatively simple and easy to use because it is closely integrated into the iPod and iTunes product lines. Currently, the iPod is the only digital music player that works with the iTunes Music Store (however other players work with iTunes), but is able to play non-DRM audio files (such as MP3) from other on-line music stores, such as Emusic.[1]

The store was the result of a deal with all four major record labels, EMI, Sony BMG, Universal and Warner Bros. It also includes over 600 independent labels, with a total offering of over 2,000,000 songs, including exclusive tracks from more than 20 artists such as Bob Dylan, U2, Eminem, Sheryl Crow and Sting. Each song can be downloaded for 99 US cents. Free 30-second previews are available of every song. Most albums are priced at 9.99 US dollars, although recently the price of some albums has been raised depending on the length of the album itself. The user can burn songs to an unlimited number of compact discs, and specific playlists up to seven discs, after download.

Currently, several dozen new songs are added each Tuesday, and beginning with Moby on July 29, 2003, independent artists are now included. Apple also releases a 'Single of the Week' and usually a 'Discovery Download,' on Tuesdays, which are available at a no cost download for one week. It has recently launched albums on pre-order status, the first one to become available was X&Y by Coldplay.

The iTunes Music Store also includes over 9,000 audio books, encoded at 32 kbit/s. 90 second previews are offered for every book.

Neither The Beatles nor Led Zeppelin appear in the iTunes online catalogue (with the exception of a very early Tony Sheridan album with the Beatles as background singers). Led Zeppelin are not included due to a belief (by the band) that their songs should not be available outside of albums, while The Beatles' record company Apple Corps is currently in a legal battle with Apple Computer over the name "Apple". There are, however, biographies within the Music Store for both Led Zeppelin and The Beatles.

As of August 2005, the Japanese store offers no songs from Sony Music Entertainment. However, some musicians like rock musican Motoharu Sano are trying to sign with Apple independently [2]. On September 6, 2005, SME announced its plan to sell songs in iTMS but did not say when [3].

In 2004, CDBaby (an online music store which features more than 100,000 independent artists) signed a deal with Apple and managed to get every artist (who wanted digital music distribution) on iTunes.

Episodes from the ABC television shows Lost and Desperate Housewives became available for download in October 2005, along with several short animated films by Pixar.

• The store sold about 275,000 tracks in its first 18 hours and more than 1,000,000 tracks in its first week. When released for Windows, iTunes was downloaded more than 1,000,000 times in the first 3 days and more than 1,000,000 songs were sold in that period.

• On December 15, 2003 Apple announced that it had sold 25 million songs since the launch in April.

• In January 2004 at the Macworld Conference & Expo in San Francisco, Steve Jobs announced (as cited in Sellers, 2004) that an unnamed person had purchased $29,500 USD worth of music.

• On March 15, 2004, Apple announced that iTunes Music Store customers had purchased and downloaded 50 million songs from the iTunes Music Store. They also reported that customers were purchasing 2.5 million songs a week which translates to a projected annual run rate of 130 million songs a year. The 50 millionth song was "The Path of Thorns" by Sarah McLachlan. [4]

• On April 28, 2004, the iTunes Music Store marked its one year anniversary with 70 million songs sold, the clear dominance in the paid online music market and the slight profit. [5] The store also offers hundreds of movie trailers and music videos, in an attempt to boost soundtrack sales. In the conference, Steve Jobs reiterated that a subscription service is still not the interest of customers and reported that only 5 million of the 100 million songs offered in the Pepsi giveaway campaign were redeemed, which he blamed on technical problems in Pepsi distribution.

• According to an Apple Press Release [6] released on August 10, 2004, the iTunes Music Store is the first store to have a catalog of more than one million songs. Also, the iTunes Music Store at that point maintained an over 70% market share of legal music downloads.

• On September 1, 2004 the iTunes Music Store had surpassed 125 million songs sold. [7]

• On October 14, 2004 the iTunes Music Store had surpassed 150 million songs sold. [8]

• On December 16, 2004 the iTunes Music Store had surpassed 200 million songs sold. Ryan Alekman of Belchertown, Massachusetts, USA, bought the 200 millionth song "The Complete U2" by U2. [9]

• On January 24, 2005 the iTunes Music Store sold a quarter of a billion songs worldwide. [10]

• As of March 2, 2005, the iTunes Music Store had surpassed 300 million songs sold. [11]

• On May 10, 2005 Apple announced that it had sold over 400 million songs. [12]

• On July 5, 2005 Apple announced that the countdown to half a billion songs had begun. [13]

• On July 18, 2005 Apple announced that it had sold 500 million songs. Amy Greer of Lafayette, Indiana, USA, bought the 500 millionth song, "Mississippi Girl" by Faith Hill. [14]

• On October 31, 2005 Apple announced that it had sold 1 million videos since the launch of video support on October 12, 2005. [15]

Originally only Mac OS X users who had credit cards with a U.S. billing address could buy songs with the service, but Steve Jobs, the CEO of Apple, announced plans to support both Windows and non-American users. The Windows version of iTunes and support for the Windows platform from the iTunes Music Store were announced on October 16, 2003, with immediate availability.

• On 15 June 2004, the iTunes Music Store was launched in France, Germany, and the United Kingdom. Songs were priced at 99 Euro cents ( €0.99) for France and Germany, and 79 pence (£0.79) for the United Kingdom. According to an Apple Press Release, the European iTunes Music Stores sold a combined total of 800,000 songs in one week, with 450,000 of those songs sold in the UK [16].

• On 26 October 2004 nine countries were added to the iTunes Music Store in a large EU store expansion: Austria, Belgium, Finland, Greece, Italy, Luxembourg, the Netherlands, Portugal, and Spain. This extended availability to all countries in the Eurozone except for the Republic of Ireland, where the iTMS became available on 6 January 2005. These countries also pay €0.99 for songs, and all these stores share the same catalog and are available only in English. The French, German, American, and British stores are localized for their respective countries and have different catalogs. On 3 December 2004 the British Office of Fair Trading referred the iTunes Music Store to the European Commission because it prevents consumers in one EU country from buying music from stores in other EU countries, in violation of EU free-trade legislation; the immediate cause of the referral was because the €0.99 price charged in the Eurozone equates to 68 pence in sterling, rather than the 79 pence actually charged there.

• The iTunes Music Store was launched in Canada on December 3, 2004; Canadian customers pay $0.99 (CDN) per song.

• On 10 May 2005, the iTunes Music Store "went live" for Norway, Sweden, Switzerland and Denmark, after about two weeks of speculation about these countries (and Australia) receiving the store.
• Apple officially launched the iTunes Music Store in Japan on 4 August 2005, with 1 million songs available; 90% of songs are priced at 150 yen (1.34 dollars) [17]. In the next four days the store had sold one million songs–the pace faster than that of the U.S. store [18]. This opening to the world's second largest music market, where iPod controls about 30% market share, came after a long delay. In addition, Apple failed to have one set price for singles. Pundits have speculated that this may indicate the introduction of new price structure to the rest of the stores in future, in favor of record labels who would like to see higher prices for new songs.

• The iTunes Music Store was launched in Australia on 25 October 2005. Individual songs are priced at AUD$1.69 per track, album prices vary but are generally priced at $16.99. The recent release of video-capable iPods also saw the store launch with music videos and short films by Pixar available for $3.39 each, although TV episodes are not currently available. Failed negotiations with the Sony BMG label (which had delayed the launch of the Australian iTMS significantly) meant that none of that label's artists are available at the time of launch. Stores in the Coles Myer retail chain will sell iTunes Music Cards in denominations of $20, $50 and $100. Access was accidently given to people in New Zealand too [19].

Songs are encoded using FairPlay-encrypted 128 kbit/s AAC streams in a mp4 wrapper, using the .m4p extension. In practice, the sound quality is comparable to songs encoded at 160 kbit/s using MP3 or 128 kbit/s using Microsoft's Windows Media Audio WMA format.

While licenses to the AAC compression and the mp4 file format are readily available, Apple has yet to allow their proprietary FairPlay encryption scheme to be licensed to other hardware manufacturers, so only Apple's QuickTime and iPod can play AAC files encrypted with Apple's FairPlay technology.

Apple's FairPlay Digital rights management (DRM) is integrated into iTunes, which manages songs purchased from iTunes Music Store. Users are not allowed unlimited CD burns of playlists, or to play the songs on more than five computers within 24 hours. However, they are allowed to copy the songs to an unlimited number of iPods.

With the introduction of iTunes 4.5, Apple raised the number of machines allowed to use purchased music from 3 to 5. They also cut the number of times a user can burn CDs of the same playlist from 10 to 7. This adjustment was the result of the renegotiation Apple had with major labels. In 4.7.1, users were further restricted: they were limited to sharing their songs with five computers within 24 hours, rather than the previous five at a time

Apple FairPlay technology, however, is not unbreakable. A user can, for example, convert protected files to unprotected MP3 format by burning them to an audio CD, then ripping them back to iTunes. This method, however, reduces the sound quality of the recording. Software has emerged that can remove Apple's FairPlay DRM, allowing the files to be used without technological restriction.

Competitors accuse Apple of using iPod, the iTunes Music Store, and "FairPlay" (Apple's DRM-protected implementation of the AAC open standard) to establish a vertical monopoly to lock iPod users into using the iTunes Music Store exclusively (and vice versa). This "lock" has two aspects:

• Apple has maintained tight control of its FairPlay encryption, electing not to license it to other companies. As a result, other online music stores cannot sell music files encoded with FairPlay, and competing devices from companies such as Creative Labs and iRiver cannot play such files. Consumers who want to download songs from the extensive iTunes music catalog to their digital audio players have no choice but to purchase an iPod (or, as mentioned above, convert the downloaded files to an open format).
• The iPod does not support Microsoft's DRM-protected WMA format or RealNetwork's Helix-DRM protected files, so iPod users who wish to purchase protected music that uses one of these DRM protections must circumvent the DRM of the files (which may be illegal) to play them on their iPod.

In July 2004, RealNetworks debuted an application named Harmony, which used a technological workaround to allow iPod users to convert files purchased from RealNetworks' RealRhapsody service into a FairPlay-compatible format which an iPod could play. Apple responded by accusing RealNetworks of "adopt[ing] the tactics and ethics of a hacker to break into the iPod." [20] Apple later released a firmware upgrade that rendered fourth-generation iPods and iPod mini incapable of playing files converted with Harmony; RealNetworks subsequently vowed to develop another workaround.

On January 3, 2005, an iTunes online music store customer sued Apple Computer, alleging the company broke antitrust laws by freezing out competitors (iTunes Lawsuit).

In March 2005, Jon Johansen ("DVD Jon") released a program called PyMusique ([21]) that allows iTMS customers to purchase songs without any DRM restrictions. On 21 March Apple blocked access to the iTMS with PyMusique. A day later, Jon wrote in his "So Sue Me" post: "The iTunes Music Store recently stopped supporting iTunes versions below 4.7 in an attempt to shut out 3rd party clients. "I have reverse engineered the iTMS 4.7 crypto which will once again enable 3rd party clients to communicate with the iTMS." To this day, there are several ways to convert protected iTunes music files into regular mp3 files

On Super Bowl Sunday, February 1, 2004, Apple launched a promotion with Pepsi in which they gave away 100 million songs, through tokens on selected soft drink bottle caps. Fortunately for Apple, Pepsi failed to properly distribute the bottles to major metropolitan areas until only weeks before the promotion ended, despite a one-month extension of the deadline by Apple. The promotion, however, was repeated beginning January 31, 2005, with 300 million songs available, and an iPod mini given away every hour.

On July 1, 2004, Apple announced that, starting with the sale of the 95 millionth song, an iPod would be given away to the buyer of each 100 thousandth song, for a total of 50 iPods. The buyer of the 100 millionth song would receive a PowerBook, iPod, and $10,000 gift certificate to the iTunes Music Store.

Ten days later, on July 11, Apple announced that 100 million songs had been sold through the iTunes Music Store. The 100 millionth song was titled "Somersault (Dangermouse Remix)" by Zero 7, purchased by Kevin Britten of Hays, Kansas. He then received a phone call from Steve Jobs personally, who offered his congratulations, as well as a 40GB 3rd Generation iPod laser-engraved with a message of thanks.

Inspired by Pepsi's marketing success with iTunes giveaways, Coca-Cola partnered with 7-Eleven to give away a free iTunes song with every 32 oz. Slurpee frozen beverage until July 31, 2005. Songs could be redeemed until August 31, 2005 by entering a code printed on the Slurpee cup into the iTunes Music Store application. Coca-Cola did this in spite of having its own music store, myCokeMusic.com, that competes with the iTunes Music Store in Europe.

On July 5, 2005 Apple announced that they were counting down to half a billion songs. The buyer of every 100 thousandth song up to 500 million would receive an iPod mini and a 50-song gift card. The grand prize for the person who downloads the 500 millionth song was 10 iPods of their choice, a 10,000-song gift card, 10 50-song gift cards and 4 tickets to the Coldplay world tour. Twelve days later, on July 17, Apple announced that 500 million songs had been sold through the iTunes Music Store. The 500 millionth song, purchased by Amy Greer of Lafayette, Indiana, was "Mississippi Girl" by Faith Hill.

On July 28, 2005, Apple and Gap (Gap Press Release) announced a promotion to award iTunes music downloads to Gap customers who tried on a pair of Gap jeans. From August 8 to August 31, 2005, each customer who tried on any pair of Gap jeans could receive a free download of their favorite song from the iTunes Music Store.

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