New Apple music service to go live today at 1 PM (EDT) – at $.99 per song it is way overpriced and will do little or nothing to change current habits. I believe the tipping point is somewhere between $.50 and $.25 per song. The Financial Times’ report:
- Apple Computer will on Monday start its bid to become the leading online music retailer with a fee-based service allowing songs to be downloaded for 99 cents apiece.
The US computer group’s new venture is backed by the world’s five largest music companies, and marks the latest industry effort to challenge the loss of revenue from the millions of fans who download music illegally on file-swapping services.
The big record companies had hitherto resisted the development of online music despite rampant piracy and falling revenues.
“The real win is not just to curtail piracy but to create a compelling, legitimate alternative,” said Strauss Zelnick, a former chief executive of Bertelsmann’s music division and now chief executive of Zelnickmedia, the media and entertainment company.
Steve Jobs, Apple chairman and chief executive, is understood to have personally negotiated access to the music companies’ back catalogues to secure content for his new service. He is also thought to have won over some high-profile bands such as REM, which had hitherto refused to allow their music to be made available online.
With Apple’s worldwide computer market share now below 3 per cent, the company is under pressure to reinvigorate the brand and attract new customers.
The new Apple service is an extension of existing efforts to promote its products as the “digital hub” allowing consumers to copy, edit and play music, video or photos on Macintosh computers. Apple is also pushing companion devices such as the iPod, the pocket-sized digital music player.
However, some analysts remain sceptical as to whether Apple can persuade the tens of millions of users who regularly use unlicensed file-swapping services such as Kazaa to switch to a legal alternative. Subscription services such as Pressplay and Musicnet, both of which are backed by large music companies, have so far attracted a limited user base.