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Is iTunes the future of music sales?

Is iTunes too expensive? What happens to your tracks when you change computer? Will CDs survive?


I remember when I first became aware of the Internet, back in 1995 or so. I met a guy who was setting up a paid-for music download website. He was so confident - he told me that it would wipe out record stores within a year!

I wasn't so sure about that, but I knew that the Internet would be at least highly important to music, and I learned all I could, as quick as I could.

The idea that music sales would switch from the traditional record store to the Internet persisted. Other paid-for music download sites came and went. I know of one personally where the backers invested over $3 million, and went bust with only a few hundreds of dollars in sales.

So how come Apple have got it to work with iTunes? In fact, have they got it to work, or is it all going to end in tears?

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For me, the pricing model just doesn't work. iTunes and other paid-for download sites charge around $1 a track. The record companies would like to charge more - up to around $2.50. Let me tell you why this is too much to pay.

The problem is that downloads just don't last. OK, you can burn onto CD, but I'll bet that not many people do - they'll download onto their computer and transfer to their personal music player, iPod for instance.

But as we all know, computers crash, files get deleted accidentally, you get a virus or worm... And even if these things don't happen to you, you're going to want to upgrade in the future. And the digital rights management built into these download services isn't going to make it easy for you to migrate your tracks to a new PC.

Yes, you should regard your tracks as being here today and probably gone tomorrow. They are ephemeral. Remember that most people won't burn to CD because they either can't be bothered or don't see it as important.

Now I don't mind paying say 30 cents for something that is here today and gone tomorrow. But not a full dollar. When I buy a CD, I know I have it to enjoy permanently. And in case of fire or theft, my CD collection is specifically written into my household insurance policy.

Try insuring a download!

I predict that the current download boom will lead to a fallout when people realize that their expensive collection of tracks one day has vaporized.

I also believe that where people will hesitate before paying $1 for a download, they will download like crazy at 30 cents a track, and the record companies and artists will reap even more money.

By David Mellor Thursday January 1, 2004