COPYCENSE

"For the longest time, the recording labels viewed digital music as something that could hurt them with hurricane force but made no efforts to adjust to this new reality, let alone exploit it. Finally, they were persuaded to license their works to online music sellers. Apple’s iTunes Store, which sells songs for 99 cents a shot, became a template for a mini-industry that clearly represents the future of music. Microsoft opened its own long-awaited online outlet earlier this month. And just last week Yahoo dropped $160 million to buy Musicmatch and its store.

"This summer provided a clue to further harnessing the force of digital nature. For three weeks, Real Networks tried to lure new customers by slashing prices to 49 cents a song and $4.99 per album. Since Real paid the full royalty load to the labels (almost 70 cents a tune), the company lost money on every transaction. CEO Rob Glaser says that the company did get new customers, but here’s the real news: Real sold six times as much music and took in three times as much money."

Steven Levy. Music Companies Are In Denial. Newsweek. Sept. 27, 2004.