The second week after its gala opening, Apple's new online-music store duplicated its huge first week, selling another 1 million songs. The company says more than half of those sales were for full-length digital albums rather than singles. For the slumping music industry, which has seen sales fall eight percent through the first four months of 2003, compared to the same period in 2002, this news came as a ray of hope.
"It's a small but reasonable audience, which is very encouraging," says Interscope Records chairman Jimmy Iovine. "It's our first real offensive move in this area."
Interscope artists are heavily featured on the site -- including top acts such as Eminem and U2, who have provided exclusive material. An acoustic version of U2's "Stuck in a Moment You Can't Get Out Of" is Apple's top download. "Anyone who has got a penicillin for what's wrong with the music biz deserves our encouragement," says U2's manager, Paul McGuinness.
Although these initial numbers are impressive, they represent a small portion of the music industry's $11.5 billion annual revenue. At this pace, the labels stand to earn about $33.8 million from the iTunes Music Store this year, which lags behind the $45.4 million that vinyl records brought in last year. Even if Apple continues to sell a million downloads a week for the next year, revenues won't match the collective projected take of subscription services such as Pressplay, MusicNet, Rhapsody and Musicmatch, according to technology-research firm GartnerG2. That's because the subscription ventures operate on the Windows platform, and U.S. users of Windows PCs outnumber Macintosh users by twenty-five to one.
So far, due to ongoing piracy concerns, only two of the five major labels have reportedly signed deals allowing Apple to develop a Windows version. Those concerns are likely to grow now that hackers have found a way to use iTunes software to share music. But Iovine believes creating a Windows version is worth any risk. "Whoever doesn't license music for this is crazy," he says. "It's a huge mistake."
Of the iTunes Music Store's Top 100 downloaded songs as of May 8th, thirty-five are exclusive tracks. Most are B sides or live versions of popular cuts. Here's a guide to some of the best:
All three of the band's exclusives are in Apple's Top Ten, including "I Will Follow," and "Beautiful Day," culled from the 2001 Elevation Tour DVD, as well as an acoustic "Stuck in a Moment You Can't Get Out Of."
A reworking of "The Way I Am," with fellow misanthrope Marilyn Manson, who offers aggro guitars and (shockingly) some rapping on the chorus.
Has four tracks, including "Hero Blues," recorded live at Carnegie Hall in 1963, and an alternate take of 1989's "Everything Is Broken." "Dylan mixed these himself," says Apple CEO Steve Jobs. "He was really excited about this."
Three mixes of MA's moody "Butterfly Caught," from the new 100th Window, by Paul Daley (ex-Leftfield), RJD2 and Jagz Kooner. The Flaming Lips
Seven songs, including a must-hear dirgelike reading of Kylie Minogue's "Can't Get You Out of My Head" (not exclusive to Apple).
The iTunes Music Store's Top Ten downloaded albums:
1. Jack Johnson, On and On
2. Beck, Sea Change
3. Sting and the Police, The Very Best of . . .
4. Fleetwood Mac, Greatest Hits
5. Kelly Clarkson, Thankful
6. Sheryl Crow, C'mon, C'mon
7. Fleetwood Mac, Say You Will
8. Elvis Presley, Elvis '56
9. 3 Doors Down, Away From the Sun
10. Jack Johnson, Brushfire Fairtytales