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Editors' Picks

Who will win the online music wars?

Editors' picks

Napster first knocked the music industry on its rear a few years ago by allowing millions of people to freely "swap" digital music files, a practice the courts frowned on, essentially driving Napster offline. While illegal downloading still occurs, millions of people are paying to acquire music legally from Apple Computer's iTunes, Rhapsody, the re-launched Napster and even sites operated by mega retailers such as Wal-Mart. Now mighty Microsoft has jumped into the game, and its deep pockets, tech savvy and take-no-prisoners management could change the game for consumers and competitors. Who are you betting on?
September 2, 2004

Apple's iTunes

There is no doubt that Apple has changed the course of the digital music industry. When the world was embroiled in the debate over peer-to-peer file-sharing's legality, Apple skirted the entire issue and launched an online music store. With the Recording Industry Association of America (RIAA) suing individual file-traders by the thousands, many music lovers turned to Apple's store, relieved to have a legal way to download songs. But even with the wild popularity of its iPod, and millions of songs sold, the iTunes store has yet to be very profitable. Though it has an established lead in the digital music market, Apple will have to fend off serious competition in order to hold its ground.

MacNewsWorld Competition for iPod's market share on the rise
CNET News.com Apple to pay commissions on iTunes sales
CNET News.com Apple and the legacy of Napster
MacDailyNews Piper Jaffray: iTunes Music Store could drive Apple's stock in future
CNET News.com Hacker takes bite out of Apple's iTunes

MSN Music

It was only a matter of time before the software behemoth entered the music download space. And Microsoft certainly has come onto the battlefield with a heavy arsenal. Bill Gates, for one, thinks his company's ability to offer video along with audio will be its biggest opportunity to take a bite out of Apple's market share. Microsoft has formed partnerships with three device makers, all of which are releasing combo audio/video players that support MSN Music. We can count on Microsoft, which rarely settles for second place in any of its ventures, to fight tooth and nail to become a leader in the music market.

CNET News.com Microsoft opens MSN Music store
New York Times Can Microsoft beat iTunes with a store of its own?
CNET News.com MSN Music: It's really about Windows
BusinessWeek Microsoft, the entertainer?
TheStreet.com Microsoft's online store more buzz than music

RealNetworks Rhapsody

RealNetworks has taken some heat in the last few weeks for its all-out campaign against Apple. First, the company "hacked" Apple's FairPlay code, allowing songs bought from the RealPlayer Music Store to be played on an iPod. They followed by dramatically dropping the cost of songs, and finally launching a petition to get music fans to support an open standard for digital music files and devices. How these bold moves will impact the company's success in the market is unclear, but by bringing the issue of interoperability to the forefront, they have drawn a line in the sand and music service providers will be forced to choose a side.

CNET News.com Can Glaser and Jobs find harmony?
CNET News.com Real gets flamed over iPod campaign
Business 2.0 Is RealNetworks just stinky cheese?
CNN RealNetworks offering college discounts
CNET News.com Microsoft just one factor in Net pioneer's chaotic history

Napster

Once the quintessential rebel of the Internet, Napster is finally playing by the rules, though the new Napster is a mere shadow of the company it once was. CD-burning software maker Roxio bought the Napster brand in a bankruptcy auction, sold the old Roxio business and relaunched Napster as a paid music service. Analysts are split on whether the new Napster has a chance of succeeding in the music market, and its recent partnership with Microsoft puts it in an awkward spot, positioning the company as both a partner and direct competitor of the software giant.

CNET News.com Betting it all on Napster
Yahoo News Napster previews first portable digital music subscription service
TechNewsWorld Whether Roxio or Napster, it's just a shadow
CNET News.com Roxio sells software division, focuses on Napster
Silicon.com BBC gazumped by Virgin Napster deal
Ars Technica Twenty universities approve student fleecing by RIAA

Free P2P

Regardless of the many paid music services that have popped up, there remains an enormous network of music lovers who believe their music should come for free. The popularity of free file-sharing networks, like Kazaa and Morpheus, has waned but has hardly disappeared. Despite continued lawsuits brought on by the RIAA, and proposed legislation that would shut down P2P services, file swappers take heart in a recent ruling by a federal appeals court that stated file-sharing services are, in fact, legal. Unless these networks are shut down entirely, the industry can count on many would-be customers taking the risk and downloading free music to their hearts' content.

CNET News.com Copyright Office pitches anti-P2P bill
CNET News.com Judges rule file-sharing software legal
Reuters Music industry sues 744 more over file sharing
CNET News.com File-swapping gets supercharged on student network

Audio and Video

Apple launches iTunes Music Store and new iPods
Apple CEO Steve Jobs announced on Monday the launch of a new online music store that features 99 cent downloads and a 200,000-song library. He also introduced three new iPods, one which has 30 gigs of storage.

Can Apple's iTunes Music Store stop Kazaa?
ZDNet's David Coursey asks Apple's Philip Schiller how the company's new online music store will compete with popular file-sharing services like Kazaa.

Music industry must learn to sing along
Singer Janis Ian tells CNET News.com's Charlie Cooper that it's time for record companies to work together to create a master Web site for consumers to easily download music.

Add a Comment (Log in or register) (12 Comments)

Room for All???
by Earl Benser September 2, 2004 7:21 PM PDT: This isn't a 'winner-take-all' contest. I have my own concerns
about the quality of WMA files as a useful music format. I have
no confidence in Real Media as a source for anything. But others
do, and Real and MS will benefit from their purchases. Apple is
the dominant music provider with iTunes, the iTunes Store, and
the iPod. Apple will likely remain the leader with its all around
solution.

It is essential that any music system handle the more common
formats, and Apple's does just that. Others had better provide
similar capabilities should they seriously want to compete.

By the way, I don't own an iPod. But my home and car audio
systems do work very well with the MP3 format via iTunes or
CD-ROM. That's all I need for now.; Reply to this comment

Room for All???
by Earl Benser September 2, 2004 7:21 PM PDT: This isn't a 'winner-take-all' contest. I have my own concerns
about the quality of WMA files as a useful music format. I have
no confidence in Real Media as a source for anything. But others
do, and Real and MS will benefit from their purchases. Apple is
the dominant music provider with iTunes, the iTunes Store, and
the iPod. Apple will likely remain the leader with its all around
solution.

It is essential that any music system handle the more common
formats, and Apple's does just that. Others had better provide
similar capabilities should they seriously want to compete.

By the way, I don't own an iPod. But my home and car audio
systems do work very well with the MP3 format via iTunes or
CD-ROM. That's all I need for now.; Reply to this comment

Who will win the online music wars
by Bro.Bob September 2, 2004 10:34 PM PDT: I think we all win after the dust settles its time for the music industry to
pay attention to what people want.
Apple just jumped out ahead everyone for while with a good marketing tool
iPOD!
they thought they where the only game in town then some other big players
moved in like Sony,Real network and now even Microsoft !

I'm independent musician and this is all good news for me.
I may have way better shot at getting my music on line and selling CDs with one of these guys then I ever did with the big record companies!

If I had to say who will win I would say Real networks has good shot at wining the war.
then on the other hand Apple has put millions of dollars in TV adds and bill boards I see the iPOD dancer everywhere I go.
If seeing iPODS all over on every kids head and some adult joggers has got tell you something about this trend in the market!
who would have thought that thousands of Moms and Dads would shell out close to four hundred bucks a pop for this little money making marvel!
I say more power to Apple no matter how long there glory days last!
you know there is always new kid on the block to steal there thunder and take bite out the Apple pie we call America, God bless them all.

Bro.Bob; Reply to this comment

Who will win the online music wars
by Bro.Bob September 2, 2004 10:34 PM PDT: I think we all win after the dust settles its time for the music industry to
pay attention to what people want.
Apple just jumped out ahead everyone for while with a good marketing tool
iPOD!
they thought they where the only game in town then some other big players
moved in like Sony,Real network and now even Microsoft !

I'm independent musician and this is all good news for me.
I may have way better shot at getting my music on line and selling CDs with one of these guys then I ever did with the big record companies!

If I had to say who will win I would say Real networks has good shot at wining the war.
then on the other hand Apple has put millions of dollars in TV adds and bill boards I see the iPOD dancer everywhere I go.
If seeing iPODS all over on every kids head and some adult joggers has got tell you something about this trend in the market!
who would have thought that thousands of Moms and Dads would shell out close to four hundred bucks a pop for this little money making marvel!
I say more power to Apple no matter how long there glory days last!
you know there is always new kid on the block to steal there thunder and take bite out the Apple pie we call America, God bless them all.

Bro.Bob; Reply to this comment

Apple has already won.
by avfolk--2008 September 2, 2004 11:05 PM PDT: Apple's ease of use, superb selection, superior compression
(AAC) and grass-roots appeal have already proven themselves,
in acceptance, buzz, and profitability. Microsoft and others may
siphon off some buyers -- but after a while they will tire of the
inevitable 'Microsoft tax'... that added cost adds up -- as many
computer users have come to realize.

Apple will have to innovate to grow -- but that's a core value at
Apple -- not so at Microsoft. Can you say 'Lornhorn'?; Reply to this comment

Apple has already won.
by avfolk--2008 September 2, 2004 11:05 PM PDT: Apple's ease of use, superb selection, superior compression
(AAC) and grass-roots appeal have already proven themselves,
in acceptance, buzz, and profitability. Microsoft and others may
siphon off some buyers -- but after a while they will tire of the
inevitable 'Microsoft tax'... that added cost adds up -- as many
computer users have come to realize.

Apple will have to innovate to grow -- but that's a core value at
Apple -- not so at Microsoft. Can you say 'Lornhorn'?; Reply to this comment

Why the obsession with "winning"?
by September 3, 2004 3:27 AM PDT: Apple has already won, in that they have rapidly become a highly
successful (high volume/high visibility & recognition) source for
tunes on the web. There seems to be room for other winners
too.

I'm not sure what this will evolve to, but it's a great development
to this point. I'm spending about the same amount of money on
music, but am getting exactly what I want when I want it. Unless
these tunes have been embedded with some parasite, this is a
great, great thing. ... DAMN, always with the paranoia ...; Reply to this comment

Why the obsession with "winning"?
by September 3, 2004 3:27 AM PDT: Apple has already won, in that they have rapidly become a highly
successful (high volume/high visibility & recognition) source for
tunes on the web. There seems to be room for other winners
too.

I'm not sure what this will evolve to, but it's a great development
to this point. I'm spending about the same amount of money on
music, but am getting exactly what I want when I want it. Unless
these tunes have been embedded with some parasite, this is a
great, great thing. ... DAMN, always with the paranoia ...; Reply to this comment

online music wars
by kosmo fenster September 3, 2004 5:40 AM PDT: with content being particularly similar at every location, it's
going to be about user experience, and so far, it's apple's game
to lose.
the fight will boil down to apple vs MSN, all the others are
sideline players.
jobs and company have done a lot to revive interest in music
with itunes/ipod combo, big challenge for redmond crowd, are
they up to the kind of innovation required, my money says NO!; Reply to this comment

online music wars
by kosmo fenster September 3, 2004 5:40 AM PDT: with content being particularly similar at every location, it's
going to be about user experience, and so far, it's apple's game
to lose.
the fight will boil down to apple vs MSN, all the others are
sideline players.
jobs and company have done a lot to revive interest in music
with itunes/ipod combo, big challenge for redmond crowd, are
they up to the kind of innovation required, my money says NO!; Reply to this comment