The releases come in the wake of a court ruling last week that -- for the first time in the United States -- handed a defeat to the record labels and movie studios in their attempts to stamp out online file-swapping services. A federal judge in Los Angeles ruled Friday that file-trading services Grokster and Morpheus were legal technological tools, protected by law in much the same way as videocassette recorders or copy machines. The ruling did not serve as an endorsement of copyright infringement that takes place using that software, but will certainly make it harder for copyright holders to rein in the services. Apple's service breaks from the pack of most recent digital music services, which have offered large or unlimited amounts of music--although with restrictions on how or where it can be used -- for a single monthly fee. The subscription model has been seen by many analysts as one potential response to file-swapping services such as Napster and Kazaa, where a vast amount of music is available at no charge. The subscription model allows consumers to sample new music in much the same way as they can with free file-trading networks, without having to pay for each song. While the subscription model has been slow to pick up customers over the past year, it has begun to gain ground in recent months as record labels have allowed more music to flow into the plans and have permitted CD burning and similar features. RealNetworks agreed to buy San Francisco company Listen.com last week in a cash-and-stock deal worth $36m in order to take over that company's Rhapsody subscription service. Apple's model is more like earlier, largely unsuccessful plans by companies like Liquid Audio or the record labels themselves. However, those pay-per-song services generally charged high prices -- sometimes as much as $3.99 per song -- and had much smaller selection than what Apple is offering. "I think 99 cents is the magic number. I think that's an impulse buy," said P.J. McNealy, an analyst for Gartner G2, a division of Gartner Research. The new Mac-based service is also integrated tightly with the company's iTunes music software and the popular iPod MP3 player, an advantage that no other music service has had to date. Paying the piper
Hard research on what digital music lovers actually want or do is still slim, but some information is available that indicates different computer users might use both services. A recent study by Jupiter Research indicated that 47 percent of online consumers in general would buy a digital version of a single online without copy restrictions for 99 cents, although the study did not say how many they would buy at the price. The same study said that 49 percent of file sharers -- those using services such as Kazaa -- would buy a single for 99 cents. Internal metrics from Listen.com, the company that runs the Rhapsody subscription service, indicates that the all-you-can-eat plan is also popular. According to the company, just 13 percent of its "tens of thousands" of subscribers have burned a song to CD in the last month -- a process that also costs 99 cents per song, but gives the subscriber permanent access to the track. The average Rhapsody subscriber listens to about 200 different songs per month, the company said. Apple's flirtation with the music business took a strange turn earlier in the month, when rumours began flying that the company was interested in buying Universal Music Group, the largest of the big five major record labels. The company said it had not made a bid for acquisition or investment in any label, but did not rule out a future investment. Jobs has spent considerable time backpedaling from the company's onetime marketing slogan, "Rip. Mix. Burn." That earlier advertising campaign had angered record executives, but on Monday the Apple chief put forward an antipiracy face, criticising free file-swapping programs. "On the good side, (services like Kazaa) are instant gratification, showing the Net was built for music distribution," Jobs said. "On the downside, it is stealing, and it's best not to mess with karma."
What will Apple come up with next? For full Mac OS coverage, see ZDNet UK's Mac News Section.
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