Online music store

An online music store is an online business which sells audio files, usually music, on a per-song and/or subscription basis. It may be differentiated from music streaming services in that the music store offers the actual music file, while streaming services offer partial or full listening without actually owning the source file. However, music stores generally offer partial streaming previews, some even with full length.

History

The Internet's first free high fidelity online music archive of downloadable songs was the Internet Underground Music Archive.^[1] IUMA was started by Rob Lord, Jeff Patterson and Jon Luini from the University of California, Santa Cruz in 1993^[2]

In 1998, Miami entrepreneur Ivan J. Parron, president of successful web development company Internet Marketing Consultants, Inc., founded and launched Ritmoteca.com as one of the early online music store business models. It allowed visitors to visually search through a jukebox-style catalog of over 300,000 songs organized by albums, listen to a :30 music clip or music video and purchase the MP3 format download. It sold single songs for $.99 and entire album downloads for $9.99. The company's revolutionary graphical user interface opened the door to signing distribution deals with Universal Music Group, Sony Music Entertainment, Bertelsmann Music Group and Warner Music Group. These agreements gave the company online digital distribution rights for artists such as U2, Madonna (entertainer), Britney Spears, Enrique Iglesias and Jay-Z. The company concept had originally been for the consumer to download an Mp3 and burn it onto a CD. However, early MP3 players from companies like Creative Labs began to appear.

The realization of the market for downloadable music grew widespread around the time of Napster, a music and file sharing service created by Shawn Fanning that made a major impact on the Internet scene during the year 2000. Some services have tethered downloads, meaning that playing songs requires an active membership.

The major record labels eventually decided to launch their own services, allowing them more direct control over costs. Sony Music Entertainment's service did not do as well as was hoped. Many consumers felt the service was difficult to navigate and use. Sony's pricing of US$3.50 per song track also discouraged many early adopters of the service. Furthermore, as MP3 Newswire pointed out in its review of the service, users were actually only renting the tracks for that $3.50. After a certain point the files expired and could not be played again without repurchase. The service quickly failed.

Undaunted, the record industry tried again. Universal Music Group and Sony Music Entertainment teamed up with a service called Duet, later renamed pressplay. EMI, AOL/Time Warner and Bertelsmann Music Group teamed up with MusicNet. Again, both services struggled, hampered by high prices and heavy limitations on how downloaded files could be used once paid for. In the end, consumers chose instead to download music using free file sharing programs, which many felt were more convenient and easier to use.

Non-major label services like eMusic, Cductive and Listen.com (now Rhapsody) sold the music of independent labels and artists to keep in the game, however digital audio download demand skyrocketed after the launch of the iTunes Store (then called iTunes Music Store) and the creation of portable music and digital audio players. This enabled music fans to take their music with them, wherever they went.

Current market

Recently, there has been a boom in "boutique" music stores that cater to specific audiences.

There are also an increasing amount of new services popping up that enable musicians to sell their music directly to fans without the need for a 3rd party. These type of services usually use e-commerce enabled web widgets that embed into many types of web pages. This turns each web page into the musician's own online music store.

A more recent development allows the instant downloading of radio-songs, as they are broadcast, straight to a mobile phone in less than 60 seconds. This technical innovation from Sweden, called DROPme, represents a different channel and consumer behavior relative to the online services.

As of April 2008, one of the largest online music service is iTunes Store with around 80% of the market.^[3] On April 3, 2008 iTunes Store surpassed Wal-Mart as the biggest music retailer in the US, a milestone in the music industry as it is the first time in history that an online music retailer exceeds those of physical music formats.

Compared to file sharing

Much controversy surrounds this issue, so many or perhaps all of these points are disputed.

Advantages

• Follows copyright laws.
• More consistent and higher quality meta-data, because the entering of the meta-data is more centralized and done by groups with financial interests.
• Music download companies are more accountable to users than creators of file-sharing programs
• Centralized repository of music makes it easier to find the songs you want.
• Notably, Apple Computer CEO Steve Jobs claimed in his introduction of the iTunes Store that file sharers get paid less than minimum wage for the work required to download audio.^{[citation needed]}

Disadvantages

• Many major online music stores only offer music in one audio format. Most labels will not allow their music to be sold in the common MP3 format that music players use. For the most part music that is sold in MP3 format is not sold at higher bit rate encoding.
• Many stores use Digital Rights Management, which limits use of music on certain devices. The restrictions vary between different services, and sometimes even between different songs from the same service.
• Geographical restrictions rule most of the stores at the request of record labels.
• Many online music stores sell music encoded in a lossy format, compared to an audio CD.
• Users do not have a "hard copy" of purchased music, such as a CD, for archiving (although music can usually be backed up to a CD or portable music player).
• Some stores do not provide artwork or liner notes.
• Stores have limited catalogs, because of copyright concerns.
• Some stores are not operating system independent and usually require the use of Microsoft Windows to use their software.

See also

• Comparison of online music stores
• Music industry
• Open Music Model

References

1. ^ Maurer, Wendy. "THE DYNAMICS OF MUSIC DISTRIBUTION". http://www.chime.com/about/press/iris_online-9501.shtml. Retrieved 2008-04-21. 
2. ^ David Pescovitz (1995-08-30). "It's All Geek to Them; Digital Communes Find a Social Scene in Computers". Business section, The Cutting Edge: COMPUTING / TECHNOLOGY / INNOVATION (Los Angeles Times): p. 1. Archived from the original on 1995-08-30. http://www.geek.org/press/95-08-30/. Retrieved 2008-04-21. "...27-year-old Jon Luini, who co-founded the hip Internet Underground Music Archive (IUMA) in 1993" 
3. ^ [http://www.theregister.co.uk/2007/04/26/amazon_digital_music/ Amazon flows into digital music sales