Analysis

From the archives… How Music Ally reported on iTunes in 2003


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itunesLOGOStrange though it may seem, given our youthful good looks, Music Ally’s fortnightly digital music report was already 61 issues down when Apple launched its iTunes music store in April 2003.

So how were we reporting on the launch at that time, and were our crystal balls well-tuned or wonky? I’ve been digging into the Music Ally archives from 2003 to find out.

In Issue 62, published on 9 May 2003, we remarked on the fact that half of iTunes’ first million downloads were bought as part of albums – “which might lay to rest the fears (currently held by some major artists) that digital music could destroy the album format” – while suggesting that Apple’s real feat lay elsewhere.

“The computing firm’s biggest achievement so far, though, has been simply to introduce some marketing panache into a previously tawdry legal music scene. CEO Steve Jobs leveraged both Apple’s ubiquity in the music-making world and his own personal reputation as a visionary to gain the support of artists and executives, holding a meeting with Dr. Dre and convincing Bono and Alanis Morrisette to appear in a few promotional video clips.”

We also reported on rumours that labels were licensing the publishing rights for songs to Apple on behalf of the publishers at the rate of eight cents per track.

“Having established a precedent of a one-third / two-thirds split under the Napster agreement, publishers are likely to be dissatisfied with this rate – however, if the price of tracks goes down (as we believe they must), 8 cents could start to look like more of an attractive option.”

*cough* Well, prices never did come down on iTunes. In fact, 10 years on the pricing ceiling for iTunes music downloads is now higher than 99 cents, after a lengthy campaign by rightsholders to persuade Apple to introduce variable pricing.

music-ally-itunesWhen iTunes launched, we noted that the store was “relatively unencumbered by the restrictions which have caused some other legal sites to flounder” – the following issue, we’d be reporting on Universal and Sony’s decision to sell their much-maligned Pressplay joint venture to Roxio.

We also criticised iTunes launch imperfections such as “the lack of a discount scheme encouraging customers to really splash out, and the still fairly narrow catalogue currently offered”, while suggesting that “Apple can still learn some lessons from Emusic, which attributes its success to unsecured music files and a flat monthly subscription fee”. Hem hem.

“The really revolutionary part of Apple’s new initiative is perhaps not in the Music Store but in a dark corner of the iTunes application. Just as it enables legitimate purchasing, iTunes 4 also for the first time allows sharing, with a “Connect to Shared Music” function. And already Mac fanatics have created ServerStore, a program which allows the iTunes application to connect to any of hundreds of hard drives in order to stream music in high-quality without paying a bean. Presumably Steve Jobs gets to have his Apple pie and eat it.”

We returned to this subject the following issue with an article titled ‘Apple iTunes – Piracy Implications in Depth’, noting the emergence of third-party applications (not apps, not in those days…) like iCommune, Spymac, iTunesDB, iTuneShare and ShareiTunes – the last four of which were web-based – as well as even more sophisticated software like iLeech, iTunesDL and iSlurp:

“Today we can choose another user’s library using ServerStore, select a track with iLeech, and download the MP3 file. It’s a fantastic way to discover new music, harking back to the early days of Napster, and is purely person-to-person in a way that KaZaA, with its multi-sourced downloads, is not. But it’s undoubtedly copyright infringement.”

iTunes-fuelled piracy never did become a big problem for the music industry, but it’s fascinating to think back to those early days of ‘social’ music, with people browsing one another’s iTunes collections and discovering new music. Features that Spotify, Deezer, Rdio and rivals are all focusing heavily on in 2013.

“The forward-thinking Apple must have predicted what would happen when it added a music-sharing function, a quite brazen thing to do when simultaneously launching a major-backed online store. But legal or illegal, they’re all reasons to buy more computers, which is of course Apple’s main business model.”

By issue 64, Apple had patched iTunes with version 4.0.1, which nixed sharing across the wider internet, although the developer of iCommune had already created a workaround. Apple’s focus was on other things though: signing up more indies.

“The firm hopes to put right one major oversight in terms of the iTunes Store’s catalogue – the lack of independent label music. It has invited hundreds of indie label reps to attend a meeting featuring a demonstration of the software; Matador co-owner Gerard Cosloy and Sub Pop co-founder Jonathan Poneman have stated that they will put in an appearance, but it’s not yet known whether Apple big cheese Steve Jobs will attend.”

There was also an intriguing rumour to report on:

“In last week’s Bulletin we conjectured that e-commerce giant Amazon might make a decent competitor to Apple in the digital music stakes. We didn’t suspect, however, that Apple and Amazon might be in negotiations to bring the iTunes Music Store to Amazon’s virtual high street, but according to the New York Post that’s exactly what’s been going on. Certainly Amazon chief Jeff Bezos has toyed with downloads in the past and recently told journalists that Amazon has been looking at offering online music “for years”. Apple licensed Amazon’s 1-Click patent for the Music Store and we believe any music site which could gain access to Amazon’s payment engine and customer base would be onto a winner.”

Happy days. In 2013, Apple and Amazon are competitors, both in terms of digital music stores, cloud services and even devices – tablets most obviously, with speculation occasionally re-emerging about an Amazon smartphone being on its way.

It’s been just as fun reading the non-iTunes stories from the Music Ally reports in May and June 2003, to get a sense of the market into which Apple was launching its store. Here are some tasters:

Issue 62 (9 May 2003)

Clear Channel launched a service called Instant Live “which enables concertgoers leaving a venue to purchase a CD of the show they’ve just heard”… little-known “UK indie band Elbow” were revealing plans to release their new single Ribcage as an exclusive 99p download from their own website… UK firm Wippit was offering free downloads and exclusive live tracks from acts at the Download Festival…

A startup called File-Cash was billing itself as “the world’s first legitimate online music file sharing service based on the popular peer-to-peer delivery method”… We were suggesting that “The US market may be about to rock” for ringtones…

And in one of our more far-sighted moments, we were asking “Can the Xbox become a music machine?” and noting that “an Xbox or Playstation is a reasonably ‘closed shop’ not easily capable of accessing file-trading networks such as KaZaA. And we’re still convinced that when people get the idea of digital music in the living room, legal online services will rocket.”

Issue 63 (23 May 2003)

EMI had just piled into the major labels’ lawsuit against Bertelsmann over its investment in the original Napster… The IFPI had launched a “website to promote legitimate music sites” called pro-music.org (which is still going today)… The RIAA had launched a web bookmark called RIAA Radar (which isn’t) which allowed “consumers to identify if an album was released by a member of the RIAA… click on the bookmark to find out if it’s really a release by one of the members of the well-known Satanic circle that is the US labels’ trade body”…

British retailer Woolworths (!) had just launched an “online music preview service which allows consumers to access digital downloads of entire albums prior to their physical release… Once again, digital is coming to the fore as a means of accessing music before it hits the stores”… KaZaA users were falling prey to a nasty worm named Fizzer.

2758Issue 64 (6 June 2003)

“Rockers Metallica, whose business acumen is as hard-nosed as their music, have embraced digital downloads on their site – a full two years after becoming infamous for suing Napster”… Nokia and Warner Music Group were unveiling a deal to preload music by Harry, A and Krezip on the 3300 phone (pictured right)…

We were writing about the new blog of one of the early faces of P2P networks, Madeleine Aimee Deep (“it’s probably the first blog we’ve seen which features its author in a military camouflage bikini and matching hat, but the content itself offers fairly comprehensive coverage of digital music issues”)…

PC maker Gateway announced plans to preload music on its new machines (“the deal is expected to serve as a template for future bundling deals on electronic goods, like mobile phones”)… Publisher Warner Chappell was sending “informal letters” to Radiohead fansites that had posted lyrics and tabs without permission, including Ateaseweb.”

Stuart Dredge

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