Apple Computer launches online service cheered by analysts and record labels

Tuesday, April 29th 2003, 12:00 am
By: News On 6

SAN FRANCISCO (AP) _ Apple Computer is offering a way to download songs that analysts say could give the music industry an effective model for countering the popularity of illegal online song swapping.

The venture draws from all five major record labels in offering more than 200,000 songs _ and includes some big name artists who previously shunned online distribution. Each song costs 99 cents.

The Cupertino, Calif.-based company launched the service, iTunes Music Store, after winning the cooperation of record labels. The system, announced Monday, has virtually no copy-protection _ a major concession to consumer demand.

Apple lets customers keep songs indefinitely, share them on as many as three Macintosh computers and transfer them to any number of iPod portable music players. No subscriptions are necessary and buyers can burn unlimited copies of the songs onto CDs.

``There's no legal alternative that's worth beans,'' said CEO Steve Jobs.

As CEO of the Recording Industry Association of America, Hillary Rosen has led the fight against Napster and its free online music-swapping successors. But she called Apple's new service ``cool, cutting edge'' in a statement.

Apple does incorporate some minor restrictions _ playlists can be stored on no more than three Macs and once a user burns 10 copies of a playlist onto CDs, they have to ``modify'' the list before copying again. That can be as simple as shuffling the order of the songs.

While the service remains limited to Macs, which comprise less than 3 percent of the desktop computing market, the segment is big enough to let the music industry test a new business model, said Phil Leigh, an analyst at the research firm Raymond James & Associates.

``I think it'll change the world a little bit,'' Leigh said. ``It'll be the first legitimate online music service that will have major brand recognition, and it's focused on portability and ease of use.''

Jobs has intensely courted music industry executives, who have been leery of digital music downloads and have aggressively used lawsuits and lobbying to stem the illegal copying and distribution of copyright works.

ITunes Music Store already includes music by Bob Dylan, U2, Eminem, Sheryl Crow, Sting and other artists previously wary about music downloads. Eventually, millions of songs will be for sale on the site, said Doug Morris, the chairman and CEO of Universal Music Group.