international news_14th June, 2004

itunes UK Launch

The itunes online music revolution crosses the Atlantic this week and arrives with its European service launching initially in France, Germany and the UK.

A phenomenal success in the US where itunes has a 70% market share in the legal download market, in its first year users downloaded 85 million tracks. This is all good news for the record industry who says their 7.9% drop in retail music sales last year was due mainly to internet piracy. Anything that encourages people to pay for what they have downloaded freely they are welcoming with open arms.

But not everyone is so happy about the development. With Tracks priced at 79 pence each (160 yen) with full albums being sold for just 7.99 GBP (1600 yen) industry observers predict the itunes music store could kill the singles market and affect retailers. The itunes pricing undercuts event the cheapest online CD retailer, not to mention the high street record shops.

Apple isn't alone however. Napster, the company which ironically made its name as the first widespread file exchange software for pirated music, has gone straight and is launching its own service, along with OD2, a online jukebox, where users can listen to any track for just 1 pence each. With the online music market having such a large potential you can bet that the other companies aren't going to give it to Apple without a fight.

Who wins the battle for the online music market will no doubt emerge over the next few months. It will all depend on scope of content, ease of use and no doubt ultimately on the clever marketing campaigns from all companies involved, but whoever it is, as long as it increases revenue for artists, the result will be more quality music for the listeners.