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A Messy Age for Music

Some countries have started to take the stance that iTunes has an unfair advantage on the market. French lawmakers tried to get Apple to open up its device to competitors earlier this year. Regulators in Norway, Sweden and Denmark have also complained that Apple's practices are unfair and have threatened legal action.

The U.S. Department of Justice's antitrust division has sided with Apple so far. In September, Assistant Attorney General Thomas Barnett asked the regulators in those countries to back down, taking the approach that legal action in this area could slow innovation.

Even after scores of lawsuits from the recording industry against users of file-sharing programs, nothing is quite as popular as downloading for free. Some measurements show that the vast majority of music downloads are still from underground file-trading programs such as eDonkey and LimeWire. Research firm BigChampagne puts that figure at 90 percent.

The eMusic subscription service has plans ranging from $10 to $20 a month, allowing music fans to download 40 to 90 songs a month in the open MP3 song format, a file type that pretty much every computer and digital music player can read. Songs downloaded from eMusic can be played on an iPod.

If there's a catch, it's this: eMusic's catalogue is limited to the independent labels. There are plenty of famous artists, such as Miles Davis and Creedence Clearwater Revival, but you probably won't be able to get the latest hit song there.

"We're like the old indie record store on the corner," says eMusic chief executive David Pakman. The service is second only to iTunes in popularity. [See chart.]

It's possible that the major publishing labels could eventually warm up to the MP3, some think -- even though the unprotected format has long been blamed for the industry's woes. Yahoo has been loudly urging the big four major music labels to allow their music to be sold without the anti-piracy restrictions that keep a song file from playing on some devices. This summer, Jessica Simpson's label, Epic Records, let Yahoo sell one of her songs in the unprotected MP3 format as an experiment.

RealNetworks chief executive Rob Glaser has often blasted Apple for not opening its closed service to competitors. Two years ago, his company offered a software program that made Real's service compatible with iPods. But the service was not authorized by Apple, which accused Real of behaving like a hacker. Apple released updates to the iTunes software that later made the Real program, called Harmony, inoperable.

In an interview last week, Glaser didn't say whether he thinks the world will eventually turn toward an open, interoperable system. But, he said, it's an issue that is becoming more important to consumers as more digital music players -- such as Sansa -- hit the market.

"It's hard to have a crystal ball on this one because the industry has gone through so many twists and turns," he said.

Advocates of restriction-free music argue that the major labels may eventually embrace the MP3 file format, or another such restriction-free format, even though the file type has oft been cited as a major cause of the industry's problem.

Here's the thinking. Complex new consumer technologies often start on closed systems but then become more open as the market evolves. In the early days of the computer, for example, some printers would only work easily with certain types of computers, but today, that sort of clunkiness is a distant memory. It isn't a perfect analogy, but those who advocate open systems say, or at least hope, that the digital music market will eventually go the same way.

Yahoo Music's director of product management, Ian Rogers, said he would rather focus on building cool features to expose consumers to new music. Instead, he said, his company is stuck enforcing digital copyrights for tracks that are already being swapped for free on file-sharing services anyway.

He said he hopes today's protected file formats will eventually go the way of the Betamax videotape or other, now-obsolete music formats.

"I feel for anybody spending $10,000 to fill up an iPod today," he said. "It's like spending $10,000 on eight-track tapes in 1978: You're going to be super-bummed come 1990."


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