An online music store is an online business which sells audio files, usually music, on a per-song and/or subscription basis. The Internet's first free high fidelity online music archive of downloadable songs was the Internet Underground Music Archive. IUMA was started by Rob Lord, Jeff Patterson and Jon Luini from the University of California, Santa Cruz in 1993 The realization of the market for these services grew widespread around the time of Napster, a music and file sharing service created by Shawn Fanning that made a major impact on the Internet scene during the year 2000. Some services have tethered downloads, meaning that playing songs requires an active membership.

Overview

In 2000 Sony became the second company to make music from one of the major labels available for sale on the internet, with ' The Store'. However, it was not the first online music sharing company, because the first one was shut down in a lawsuit under the DMCA. The big record companies were apprehensive to license their catalogs to outside companies and refused the late 90's requests of MP3.com, Cductive and eMusic (then called Goodnoise) to sell digital song downloads. They eventually decided to start their own services, which they could control directly.

Sony's service did not do as well as was hoped. Many consumers felt the service was difficult to navigate and use. Sony's pricing of US$3.50 per song track also turned off many early adopters of the service. Furthermore, as MP3 Newswire pointed out in its review of the service, users were actually only renting the tracks for that $3.50. After a certain point the files expired and could not be played again without repurchase. The service quickly failed.

Undaunted, the record industry tried again. Universal Music Group and Sony teamed up with a service called Duet, later renamed pressplay. EMI, AOL/Time Warner and BMG teamed up with MusicNet. Again, both services struggled, hampered by high prices and heavy limitations on how downloaded files could be used once paid for. In the end, consumers chose instead to download music using free file sharing programs, which many felt were more convenient and easier to use.

Non-major label services like eMusic, Cductive and Listen.com (now Rhapsody) sold the music of independent labels and artists to keep in the game, however digital audio downloads began to gain popularity after the launch of the iTunes Store (then called iTunes Music Store) and the creation of portable music and digital audio players. This enabled music fans to take their music with them, wherever they went.

Recently, there has been a boom in "boutique" music stores that cater to specific audiences. For example, masterbeat.com, Beatport and Bleep.com cater to the electronic music community. Magnatune, Amie Street, and Mindawn are other examples of sites that cater to specific audiences. Another trend in music download sites includes Fonogenic which combines the ideas of the selective editorial nature of an MP3 blog with online music stores which provide instant access to buy and download songs.

There's also an increasing amount of new services popping up like WebsiteMusicPlayer.com that enables musicians to sell their music directly to fans without the need for a 3rd party. These type of services usually use e-commerce enabled web_widgets that embed into many types of web pages. This turns each web page into the musician's own online music store.

A more recent development allows the instant downloading of radio-songs, as they are broadcasted, straight to a mobile phone in less than 60 seconds. This technical innovation from Sweden, called DROPme, represents a different channel and consumer behavior relative to the online services.

As of April 2008, the largest online music service is iTunes Store with around 80% of the market. On April 3, 2008 iTunes Store surpassed Wal-Mart as the biggest music retailer in the US, a milestone in the music industry as it the first time in history that an online music retailer exceeds those of physical music formats.

Compared to file swapping

Much controversy surrounds this issue, so many or perhaps all of these points are disputed.

Advantages

• Follows copyright laws.
• More consistent and higher quality meta-data, because the entering of the meta-data is more centralized and done by groups with financial interests.
• Music download companies are more accountable to users than creators of file-sharing programs
• Centralized repository of music makes it easier to find the songs you want.
• Notably, Apple Computer CEO Steve Jobs claimed in his introduction of the iTunes Store that file swappers get paid less than minimum wage for the work required to download audio.

Disadvantages

• Many major online music stores only offer music in one audio format. Most labels will not allow their music to be sold in the common MP3 format that music players use. For the most part music that is sold in MP3 format is not sold at higher bit rate encoding.
• Most stores use Digital Rights Management, which limits use of music on certain devices. The restrictions vary between different services, and sometimes even between different songs from the same service.
• Geographical restrictions rule most of the stores at the request of record labels.
• Many online music stores sell music encoded in a lossy format, compared to an audio CD.
• Users do not have a "hard copy" of purchased music, such as a CD, for archiving (although music can usually be backed up to a CD or portable music player).
• Some stores do not provide artwork or liner notes.
• Stores have limited catalogs, because of copyright concerns.
• Some stores are not operating system independent and usually require the use of Microsoft Windows to use their software.
• Oftentimes illegal downloading methods (most notably torrents) download faster and often offer more complete versions of albums (Bonus tracks and the like).

See also

• Comparison of online music stores

External links

• How Online Music Services Work
• Online Music Service Reviews
• How Self Published Online Music Stores Work

References