Neil McIntosh 

Net rocks the rockers

The Rolling Stones' decision to sell their music online is proof of seismic change in the music industry, reports Neil McIntosh
  
  


This time last week, if you wanted to download a Rolling Stones track, there was only one way to do it: by breaking the law.

You would have had to download KaZaA, or one of its fellow file-sharing programs, and log on. Using the software, a scour through the hard disks of fellow members would take seconds. Having found the track you were looking for, it could be illegally copied and playing on your computer's speakers within minutes.

But a seismic change has taken place in the past seven days. The first big change came when OD2 - the music distribution company founded by ex-Genesis frontman Peter Gabriel - unveiled an a la carte music download service available to millions of Microsoft Windows users across Europe.

Around 200,000 music tracks are now available for download, from 62p each and with no additional subscription, through version 9 of the Microsoft Media Player. This has made it easier for listeners, wherever they are, to get hold of legitimate digital music.

The service is similar to the Apple iTunes Music Store, unveiled in April but only available to Mac users in the United States. Apple's store sold more than 1m downloads in its first week. At 99 cents a shot, the company claims the service came close to breaking even in its first quarter.

The second major development came on Monday, when the Rolling Stones announced they would be joining in by putting 500 of their hits online for the first time (in legitimate form, at least). The band's online back catalogue boasts hits dating back to 1971, including Start Me Up and Brown Sugar, and is also available on the OD2 service in Europe.

"Clearly, we're in the throes of a major transition," says Peter Jamieson, the executive chairman of the BPI, the industry body for the music business in the UK. While figures released this week showed album sales hitting a record high in the UK, Jamieson points to a continued slump in singles sales. "I don't think anybody would turn around and say that music was less popular than it was before, so the industry has to try and get round to making music legitimately in ways that the public will put money toward," he says.

The BPI is aiming to give music downloads a further pick-me-up later this year, when it launches an official download chart. This will, "at some point next year", according to Jamieson, be incorporated into the official singles chart, granting the same importance to tracks downloaded to hard disks as CDs bought in high street shops.

OD2, the company behind the service being offered through Microsoft is MSN (as well as several others, including Tiscali and the long-established DotMusic service from BT), says the chart will be vital for the success of online music. The passion of fans for their bands is good for business, points out Ed Averdieck, the company's marketing director.

"There definitely was a thing, in the old days, that you wanted your band to get to number one," he says. "We think that as soon as downloads start becoming eligible for the chart, people will think 'if I download this from KaZaA it's not going to push my band to number one. If I download it from MSN or HMV, it is'.

"That's going to be a big additional push to encourage the kids to start using these services."

In the meantime, says Averdieck, the new service is doing well: there are no official sales figures at the time of going to press, but bandwidth use - the amount of material being downloaded - has doubled, he says.

How good is the new service? To find out, Online took the a la carte menu of the MSN Music Store for a test drive this week.

Apart from prominent advertising for the new Rolling Stones back catalogue, the MSN Music Store is unashamedly biased towards the current chart. We found a large number of recent hits available, from Christina Aguilera to Ms Dynamite, although some big names were missing. 50 Cent - one of the biggest acts of the year - was absent, and Pop Idol fans might be a little disappointed: Will Young and Gareth Gates were represented, but Darius was nowhere to be seen.

And there were the eccentricities. There was no Madonna, but 80s crooner Rick Astley had two complete albums available, a disparity less likely to do with taste and more likely down to the tortuous negotiation of rights with individual artists that has to take place before back catalogues can be put online.

That is not to say, however, that then downloading the tracks would have been seamless. File-sharing networks remain clunky and occasionally difficult to use. Efforts by record companies to pump them full of fake tracks have had some impact on their usefulness.

This means that the way to persuade us to move to legitimate downloads, according to one industry expert, is to make buying music more entertaining than getting it from a shop, or illegally from somewhere else.

Steve Johnston is the head of licensing at Musicindie, an industry body representing hundreds of smaller record labels that has taken an innovative approach to distributing its content on the web. He says the "majors" - the big five record labels that dominate the industry - have been guilty of "ignoring the fact that delivering a download is a really dull experience.

"Only Apple so far has made selling downloads seem sexy," he adds. The integration of the iTunes Music Store, system software and the company's iPod MP3 player makes the user experience very slick.

There are other features, he says, that could attract users to the legitimate download market. "If you look at things that have done particularly well on the internet as a whole, such as Amazon, very few people have tapped nearly as well the peer recommendation element," says Johnston. "If you could trawl for ages and hear about people's favourite albums of the year, and get a choice of eight different recommendations every time you type in anything [and] then wed those kind of peer recommendation features and chat forums with the ability to acquire music, you'd have the dream service."

Apple's service offers a simple recommendation feature, which suggests tracks based on the behaviour of previous customers with similar tastes to you. But the iTunes music store remains unavailable in the UK, and is unlikely to open in Europeuntil next spring, according to some industry sources in this country.

Acting in Apple's, and every would-be distributor's favour, is the fact that they are at least now pushing on an open door when they speak to the record labels. "We recognise it's in our interests to get as many of these offerings out there as possible," says Jeanne Meyer, the senior vice president at EMI in the United States.

From being wary of putting much online at all 12 months ago, record companies such as EMI are now willing to release singles online ahead of their appearance in the shops. "We can make singles available to our online distribution partners the day they go to radio," says Meyer. "That's when people first start to want to buy it or hear it or, unfortunately in some cases, steal it."

Calum Chace, a partner at KMPG specialising in the media industry, says this change in attitude shows record companies are starting to see the internet not just as a threat - to be met with lawsuits and copy protection - but as an opportunity.

"They are increasingly adopting digital content marketing," says Chace. "They are looking at new ways consumers would like to get music, and trying to provide those.

"They are trying to do three things at once: protect their material through technology, protect it with lawyers, but also exploit the new digital medium as a whole new way of marketing."

Or simply, as Steve Johnston at Musicindie sums it up, "the penny is beginning to drop".

What does it cost?
Ed Averdieck says OD2 uses a credit-based system - rather than Apple's 99 cents a track model - because it allows them to offer discounts for heavier users. The MSN Music Club also has variable pricing, which means some tracks sell for 75 credits, some for 99.

Pay as you go
· £1.49 buys 150 credits - enough for 150 low-quality "streams" of songs, or 15 temporary downloads that expire after a year, or when your subscription runs out - or one permanent download, which lets you burn a track to CD or copy it to a portable player.
·£4.99 buys 500 credits, or 500 streams, or 50 temporary downloads, or 5 permanent downloads.
·£9.99 buys 1100 credits, or 1100 streams, or 110 temporary downloads, or 11 permanent downloads

Monthly subscriptions
·£4.99 a month buys 700 credits.
·£9.99 a month buys 1600 credits

 

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