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25 Million iTunes

The music industry’s traditional packaged-goods retail business may be continuing its long decline, but the sale of downloadable tunes is hot and getting hotter.

On December 16, Apple Computer announced that it has sold more than 25 million songs through its iTunes Music Store since its inception four months ago. The Cupertino, CA-based technology pioneer is now selling about 222,000 individual songs per day, at 99 ¢ each, a volume more than three times the 70,000 per day the company was selling in September, when the iTunes service was available only to Apple users. In October, the service was expanded for users of Windows machines, opening it up to an estimated 95% of the online community.

In addition, Apple’s iPod portable music player is one of the most in-demand electronics products on the market. Retailers report that they are having trouble keeping the sleek little players in stock during the holiday shopping season. Large capacity, versatility, ease of use, and visual elegance all make the iPod highly desirable-the $499 version reviewed by Wes Phillips in the October 2003 issue ofStereophile was voted “Budget Product of the Year” in December by the magazine’s writers, was a runner-up in the “Digital Source Component” category behind the $34k dCS Verdi-Purcell-Elgar SACD/CD playback system, and captured the 2003 “Editor’s Choice” award. Several manufacturers have already introduced similar products, and others are scrambling to bring theirs to market.

Never one to miss an opportunity, America Online, the world’s largest Internet service provider, announced December 18 that it would offer its subscribers access to the iTunes Store. AOL makes the iTunes easy to acquire via a one-click button placed next to featured tracks, and makes payment easy via subscribers’ AOL accounts. AOL is a division of Time Warner, whose own Warner Music Group recordings are available elsewhere on the ‘Net, as well as through iTunes.

Another canny marketing juggernaught, discount giant Wal-Mart announced December 18 that it has launched a trial music download service that will offer recordings for 88 ¢ each. Initially for Windows only, the Wal-Mart service will be modified and refined based on user critiques, and officially launched early next year. Wal-Mart’s online music store is run by Liquid Digital Media, a unit of music and magazine distributor Anderson Merchandisers. In January 2003, Anderson acquired some assets of Liquid Audio with the intention of moving into online music.

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