BUSINESS

Another two rivals fight for iTunes’ throne

KATE LUNAU September 10 2007
BUSINESS

Another two rivals fight for iTunes’ throne

KATE LUNAU September 10 2007

Another two rivals fight for iTunes’ throne

KATE LUNAU

Cornering about 70 per cent of the music downloading market in the U.S., Apple’s iTunes is the long-reigning champion of digital music. But with new heavy-weights entering the ring, speculation’s been rife as to whether iTunes may finally have met its match.

Aug. 21 saw the unveiling of two promising new services.

Although it has sold music online since 2003, Wal-Mart—the biggest compact disc retailer in the U.S.— now offers hundreds of thousands of songs and albums unencumbered by copy restrictions known as digital rights management (currently for U.S. customers only).

The DRM-free tracks can be burned onto a CD and played on almost any device. Better yet, they cost US94 cents each-significantly undercutting the iTunes price. (iTunes Plus, launched in May, offers DRM-free downloads for US$1.29, and is available in Canada.)

Meanwhile, MTV is merging its Urge digital music store with RealNetworks’ Rhapsody to create Rhapsody America. Rhapsody’s known for its subscription service; for a monthly fee, users can listen to all the music they want, like an all-you-can-eat buffet. But when the subscription runs out, so does access. Rhapsody isn’t iPod compatible, but will be playable on PCs and mobile phones as part of an exclusive deal with Verizon Wireless. While no official launch date’s been set, MTV will be promoting the new service at its Video Music Awards Sept. 9 in Las Vegas.

But is Apple under any real threat? “In the next 12 to 18 months, I don’t see Apple losing a whole lot of market share,” says David Card, a senior analyst with Jupiter Research. Music subscription services “haven’t exploded,” Card notes, and Wal-Mart’s DRM-free downloads may just inspire more people to invest in an iPod, which is far more lucrative for Apple than iTunes. That’s the beauty of Apple’s success: even the spectre of more competition only seems to help popularize digital music. And “in many consumers’ minds,” Card says, “digital music means the iPod.” M