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Steve Jobs' half note

CNET News.com's Evan Hansen says the hype surrounding Apple's new iTunes store obscures the more modest truth that it's only a music fulfillment service.

Buying music online got a lot easier with Apple Computer's new music store. It's a promising sign of things to come in the music business. That said, the service feels like half a loaf--it only begins to offer the music experience that is possible with the Internet.

Apple negotiated some great licenses from the record labels, and there's genius in that. Others tried and failed to get similar rights, so Apple CEO Steve Jobs deserves to gloat a little. But in the end, iTunes Music Store is just a music fulfillment service. It has done little or nothing to change the ways people explore and learn about the music that they eventually buy, and that's a disappointment.

If online music were approached in the right way, it would have the power to transform and enrich an industry that historically has courted consumers with a blunt marketing instrument.

Currently, a mere 2 percent of releases account for 80 percent of music industry sales. Online distribution could help rebalance that ratio, building careers for hundreds of artists who now linger in obscurity, and drawing in millions of new fans bored and alienated by the industry's star-making machinery.

The key is getting more and better information to consumers. The music store of the future can and should be a primary force in making that happen.

Look at how Amazon.com has reinvented book selling with recommendations and customer reviews, and you'll get an idea of how much simple innovation Apple and the record labels left off the table.

It's not too hard to imagine features that any great online music store should have--and likely will in short order. If Apple doesn't take these up, competitors like Amazon or a big CD retailer like Virgin almost certainly will, assuming that they can get the necessary licenses. The idea is so appealing that venture capitalists in Silicon Valley are even rumored to be drumming up a business plan for a full-featured e-commerce music start-up.

The recording industry is no slouch when it comes to marketing, and it will probably manage to turn the whole thing into an annoying mess once the idea of online distribution really gets going. But for now, it hasn't even started trying.

Paralyzed by fears of piracy, the record labels have taken years to get their act together for online distribution. In that time, they have nearly squandered their biggest sales opportunity ever by demanding complex digital rights management (DRM) features that hinder copying at the expense of turning off paying customers.

Paralyzed by fears of piracy, the record labels have taken years to get their act together on online distribution.
As Jobs said, the Internet is made to sell music. Record industry executives have seen free file-swapping networks as a lethal threat. But in fact, there is good reason to believe the networks can be contained if they are countered with products and services that offer real value without resorting to consumer-unfriendly DRM.

To give Apple its due, the company won the right to deliver musical digits in a way that could actually convince some people to pay--especially if the price of 99 cents a song drops.

But some other online music services--including ones that Jobs and others disparage as worthless--have done a lot more to attempt to change for the better the way that music is packaged and sold.

I'm talking about subscription services, which are taking a rap from the iTunes Music Store marketing department that they don't deserve. I've tried most of them out, and I'm ready to recommend one: Listen.com's Rhapsody service. It's a neat little product that delivers in lots of ways what the iTunes store doesn't even try to match.

Subscription services like Rhapsody are supposed to be a bad deal because they treat you like a pirate, according to Jobs. You're tied to your PC and forced to rent songs, instead of being allowed to own them, and that's supposedly unforgivable.

Rhapsody is far from perfect. It uses a streaming delivery system that cuts out from time to time, even with a broadband connection. Holes in its catalog abound. It doesn't synchronize with the MP3 collection on your hard drive. And at about $10 a month, it's still probably too expensive to be a mass hit.

Shortcomings aside, there's a lot of great stuff that you do get with Rhapsody and some other subscription plans. It's an amazing ear-opener to scroll through Rhapsody's listings, which offer the equivalent of a music encyclopedia. Name almost any artist, and you can immediately begin sampling--not just for 30 seconds, as in iTunes, but for weeks on end. For a dollar, you can burn songs, after which you can rip them back to your hard drive, solving the bogus ownership argument.

Online music stores or services can and probably should offer a lot more than just music downloads.
Rhapsody highlights the fact that online music stores or services can and probably should offer a lot more than just music downloads.

So, what should the ideal music store of the future look like?

At the very least, it should provide unsecured MP3 downloads; reams of information about artists and music, including trusted reviews and recommendations; numerous opportunities to sample before buying; concert schedules and tickets; and access to lyrics and sheet music.

Bundling editorial content with an online music store is a no-brainer and could either include exclusive material that pushes the service toward a hybrid magazine format, or tie in with existing publications, such as Verve or Rolling Stone.

Other add-ons might include short articles that discuss the tools and techniques used to make particular songs. Artists could sell paid advertising links in these articles to the vendors of the equipment they use. In turn, those companies would get to reach a very targeted and receptive audience with some useful and trusted information about their products.

How revolutionary might all of this get? One idea that's been discussed recently proposes creating a real-time pricing scheme for music, with song prices based on their popularity. Hot new singles might spike up to $3 or higher during the first hours or days of their release, while unpopular titles would be substantially discounted. Demand pricing could increase sales for otherwise overlooked works, or at least lower the cost of trying out something new, while rewarding top sellers.

I don't know if this would work. But it sets the bar pretty high for innovation. By comparison, Apple's music store is rather modest.