October 31, 2003, 12:00 AM

Yes, Virginia, consumers will pay for online music

Apple`s iTunes users purchased over 1 million songs in the first three and a half days after the Oct. 16 launch of iTunes for Windows. ìThat compares with 1 million songs in the first seven days when we introduced the original iTunes for Mac users last April," says Steve Jobs, Apple`s CEO.

After years of downloading music for free from the Internet, consumers were at first expected to shun new online music services that charge a fee. But one way to get consumers to pay for something is to start out by offering them something else for free. Within days after it launched its iTunes for free Windows digital jukebox software for downloading music to PCs from the Internet, consumers downloaded more than 1 million copies, Apple says.

The fast growth shows how iTunes is capitalizing on the power of the ubiquitous PC. ITunes users purchased over 1 million songs in the first three and a half days after the Oct. 16 launch of iTunes for Windows. “That compares with 1 million songs in the first seven days when we introduced the original iTunes for Mac users last April,” says Steve Jobs, Apple’s CEO.

But a measure of the popularity of online music is that in spite of the large number of downloads, Apple isn’t alone. It faces tough competition from six rival services, notably Napster 2.0, the reincarnation of the former Napster as a legitimate music service by Roxio Inc. Changing its predecessor’s stripes as an unauthorized music file-swapping service, the new Napster began offering paid music downloads on Oct. 29. The others are AOL MusicNet, BuyMusic, eMusic, MusicMatch and RealOne Rhapsody.

Apple and Napster 2.0 charge 99 cents per song, or just under $10 for a digital album. Both also support the playing of downloaded digital music on portable audio devices.

Since the iTunes Music Store launched in April for Mac users, consumers have purchased 14 million songs, Apple says.

Music downloaded through iTunes can be played on any Mac or Windows computer as well as on Apple’s handheld iPod, which retails for about $300. The iTunes store includes an “Allowance” feature that lets parents store funds online for children’s use. By the end of this month, iTunes will offer more than 400,000 songs, Apple says.

Napster, however, already offers the largest digital music library with 500,000 tracks. “Napster invented online music and we are reinventing it with Napster 2.0,” says Roxio chairman and CEO Chris Gorog.

Napster is also offering several other features at no charge to build a community of users. These include watching music videos on demand, listening to 30-second music clips, browsing archives of Billboard charts, reading “Fuzz,” Napster’s new online magazine, and a new music-recommendation service.

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