THE Internet has been described, by enthusiasts, as a global conversation, a giant encyclopedia or a 24-hour news service - and by detractors as the world's most technologically advanced time waster. What peeves record-company executives, however, is how many people see it as a free music store.
A Supreme Court decision at the end of June, however, may eventually put an "Out of Business" sign on that store. In MGM Studios v. Grokster, the court found that the makers of software like Grokster, which lets Internet users freely browse and copy songs from one another, can be sued for their role in encouraging copyright infringement. The record companies' lawyers now have a green light to try to shut down the file-swapping services.
Using Grokster, or similar services like Kazaa, always entailed a degree of risk, from PC virus and spyware infections. Getting sued - a frequent recording-industry tactic - is never a highlight of anyone's day, either. And now the courts are getting involved. What's a music-download fan to do - actually pay for music?
If it comes to that, they'll find that a lot has changed in the online music business since Apple opened its wildly successful buck-a-song iTunes Music Store in 2003. In that time, Apple's catalog has grown from 200,000 songs to nearly 1.5 million, Apple has sold half a billion songs and it has been joined by similar stores run by Microsoft, Yahoo, Sony, Real Networks, MusicMatch, Dell and even Wal-Mart.
The essentials are the same for all: each song costs about $1, each album $10. Each song is encrypted in such a way that you can copy it onto five computers, burn it onto several blank CD's, and copy it to pocket music players - but not distribute it on the Internet.
The insanely popular iPod music player and the iTunes Music Store, for Mac and Windows, still work only with each other. Most of the other stores' songs come in a Microsoft format that works on much less popular music players. You can identify these anti-iPods by a logo on their boxes, evidently composed at a PC with a broken space bar, that says PlaysForSure.
But "a dollar a song" is no longer the only game in town. In an effort to exploit the popularity of music downloads and still make money, the music stores have begun to tinker with the formula.
One intriguing alternative is the subscription plan allowing unlimited downloads that is currently offered by Napster, Yahoo and Rhapsody. (Each also maintains a traditional $1-a-song service.) Microsoft, Target, MTV and AOL have also announced plans to get into this subscription business, and even Apple is rumored be interested.
The tantalizing concept: instead of buying songs one at a time, pay a monthly fee for the rights to the entire million-song library. On the Napster to Go plan, for example, you can fill your computer and your pocket music player over and over again with as much music as you like, for $15 a month.
Unfortunately, there's enough fine print to fill a phone book. The biggest footnote is that if you ever stop paying the fee, you're left with nothing but memories; all the music self-destructs. You're not buying songs under this plan - you're just renting them. (A famous Napster ad claims that filling an iPod, at $1 a song, would cost you $10,000. But you could just as truthfully say that, under Napster's plan, listening to one favorite song for 20 years would cost you $3,600.)
Relatively few pocket players can play songs in the rental-music format. And this time, there's no handy sticker on the box to help you; you must check the compatibility list on the music service's Web site. The player must be connected to your PC once a month so it can ask the mother ship if you're still a paying customer. Note, too, that the monthly fee doesn't include the right to copy songs onto a CD to play, for example, in your car; that costs an extra 80 cents to $1 per song.
Even so, these rental-music outfits are highly conducive to exploring and discovering new music. They're ideal if your taste leans toward what one Internet wag calls Disposable Contemporary. "Like, you like the new Britney and you love the new Usher CD for this month, but next month, they're old news and you don't listen to them. You're onto the new Lohan and you're in love with P.O.D."
Put another way, the rental outfits look more attractive if you think of them as services, like cable TV or satellite radio, rather than stores. Like satellite radio, you get music only while you're still a subscriber. You pay $3 more per month than satellite radio costs, but you get to pick the songs. (Even the most extensive on-line stores, however, don't include songs by Madonna, the Beatles or any other group that has refused to make its catalog available, and some other songs are restricted as well.)
No matter which approach you choose - à la carte or all-you-can-eat - you can save a lot of money by shopping around. Yahoo, for example, offers both kinds of plans - buy-a-song and rent-unlimited - but undercuts its rivals' prices considerably. The monthly fee for the unlimited-rental plan is $7 a month, or $60 a year, paid in advance. (These are introductory prices, although Yahoo says that when it finally announces the real, permanent price, it won't be "substantially" higher.) If you want to buy a song outright or burn it to a CD, you pay an additional 79 cents each.
Analysts calculate that even Apple, king of the music-store market, keeps only a few cents from each song purchase; the rest goes to the record companies. How can Yahoo make money selling the same songs for 79 cents each, or renting its catalog for a third of Napster's and Rhapsody's fee?
Yahoo's not saying, but its rivals assert that the company is losing money on every sale in hopes of attracting customers and promoting its other services. ("It doesn't take a genius to sell a dollar for 50 cents," mutters a competitor's spokesman.)
And sure enough, Yahoo's music software is cleverly integrated with the Yahoo Messenger chat program; when you're instant-messaging your friends, you can see what Yahoo Music songs they're listening to - and if you're both subscribers, they can send the songs right over to you.
Rhapsody.com offers a program that should be equally tempting to cheapskates: Rhapsody 25. It's a free plan that lets you listen to 25 songs per month, in their entirety.
Clearly, the object is to persuade new customers to try out Rhapsody's own music-store/jukebox software. You can only listen to these songs at the computer; you can't burn them to a CD or transfer them to a portable player. But even 25 songs a month can give the casual listener a good feel for what's happening in pop music.
Rhapsody's paid plans are worth investigating for another reason, too. Like its rivals, Rhapsody's software lets you listen to Internet radio stations through your computer's speakers. But only Rhapsody lets you dictate who plays on your personal radio station.
Wal-Mart's music store has never had much of a market share, despite its 88-cent-per-song pricing. For one thing, its music library is considerably smaller than its rivals': 600,000 songs versus 1.2 million or more. But the company does offer a clever twist for the lazy or the technically timid: it will press a custom CD for you. You pick the songs, in any order you like, and Wal-Mart will burn and mail it to you, complete with label and case. (Price: $4.62 for three songs, 88 cents per additional song, $2 for shipping.)
Will any of these approaches be enough to quell the musical thirst of the millions who, at the moment, get their music from free file-swapping services? The trend is shifting, but only infinitesimally. Despite all of Apple's success selling songs online, a recent study by NPD Group, a market research company, says that nearly 10 times as much online music is swapped as is bought.
If the Grokster ruling doesn't change the way things are going, the record industry may have to consider more radical solutions, like embedding every song file with a serial number. That way, customers could freely copy their songs for personal purposes, but would avoid posting them online for fear of being hunted down. Or maybe the record companies should deliberately release free, low-quality song files to the Internet. Music fans would be able to discover new bands and albums as they do using Grokster, but would have to pay for the full-quality versions of their favorites.
One thing, though, is already clear: the downloadable-music business is still in its fumbling, bumbling infancy. It may take the music stores several more years of hammering away at their remaining problems - software complexity, steep pricing and holes in their song catalogs - before the recording industry can think of the Web without wincing.
