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Thursday 1st May 2003
Apple sells 275,000 songs in 18 hours 11:40AM, Thursday 1st May 2003
Apple's new iTunes Music Service has been an 'overwhelming success', according to figures from US music industry publication Billboard.

The Billboard Daily Bulletin, quoted by PowerPage, reports that in its first 18 hours, 275,000 music tracks were sold.

'The feat is especially remarkable,' writes Brian Garrity in the bulletin, 'considering that the offering is available only to the limited universe of users of Apple computers. The launch thereby sets the stage for a race between a host of media and technology companies to create and effectively promote similar services for the much bigger Microsoft-equipped PC market.'

'There is going to be a race to see who can get to the Windows market and start to replicate this,' the head of new media at one major label told the Garrity. 'The question is [whether] someone else wants to put up the kind of money that Apple is to let people know they're there.'

Apple is planning a Windows service by the end of this year and as we reported yesterday has advertised for a software engineer to develop a PC version of iTunes. Garrity adds that, 'Sources tell Bulletin that two major labels have already cut wholesale agreements with Apple for the Windows version of the service.'

That the iTunes Music Store happened at all appear to be a tribute to the perseverance of Apple CEO Steve Jobs. He persuaded record company executives and million-selling musicians that online music selling can work, if the model and the software is right.

As US business publication Fortune says, 'The record companies were still leery enough of Apple that they would
 
 
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agree only to one-year deals with Jobs. Nevertheless, he was able to persuade Universal, EMI, Sony, BMG, and Warner to stop fixating on their subscription models and take a radically different approach to selling digital music. People want to own music, not rent it, Jobs says.'

'Nobody ever went out and asked users,' said Jobs, 'Would you like to keep paying us every month for music that you thought you already bought? The record companies got this crazy idea from some finance person looking at AOL, and then rubbing his hands together and saying, "I'd sure like to get some of that recurring subscription revenue." Just watch. We'll have more people using the iTunes Music Store in the first day than Pressplay or MusicNet have even signed up as subscribers - probably in the first hour.' In that, he appears to have been correct.

In an interview with Time, Jobs points out why Apple is in a unique position to make a successful paid-for music downloads service, a project that started 18 months ago.

'I had somebody comment today, "Now that you have introduced your store, do you expect a lot others?" And I guess our answer is no. This is really hard,' he said. 'Over the last several years we've created an infrastructure to pump oceans of bits out in the world for movie trailers and stuff, and that's tens of millions of dollars for server farms and networking farms - it's huge - and we've already got that in place. And to have millions of transactions, and to get our online store all tied into SAP and have the auditors bless it, that's tens of millions of dollars. We have one-click shopping, only us and Amazon have that, and then to make a jukebox - how much does it cost to make iTunes and make it popular? A lot! But we've got that. And then iPod, if you want to make an iPod, what does that cost? Well, nobody has done it but us, people have tried, but they haven't even come close. That's a lot of money. So we've already made these investments and we can leverage them. And then we've invested more on top of that to make a store. But to recreate this, it's tens of millions of dollars and years. That's why I don't think this is going to be so easy to copy.'

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