Not The Same Old Song

Steve would have made a good rock star," said Roger Ames after Apple CEO Steve Jobs's tour de force introduction last week of the Apple iTunes Music Store. Ames, the head of Warner Music Group, knows rock stars--and he also knows that something had to be done to change his industry's relationship to the Internet, from black hole to bankroll. Will Apple's bold introduction of a friendly online music store (built into its iTunes software, available only on Macintoshes and synced to iPods) break the logjam? "Absolutely," says Jobs. "This is huge." But plenty of questions remain. NEWSWEEK takes on a some key ones:

What's the big deal about the Apple Music Store?

Don't think of it as a "down-load service" but a terrific online destination--a well-designed, easily navigable Web site that welcomes browsing (hear a high-quality sample of every one of the 200,000 songs), offers special items (unreleased cuts by Bob Dylan and Eminem) and, when you decide you want a song, instantly sends it to you with a single click. In other words, it's the first legal service that doesn't bludgeon you with what you can't do (and generally regards you with all the trust that Winona Ryder would receive on a return visit to Saks), but celebrates what you can do. When you buy a song, it's yours forever, with common-sense restrictions most consumers won't ever run across. You can, for instance, burn songs into all the CDs you like, as long as no more than 10 disks share the same selection of tunes.

Can a service charging 99 cents a song compete with a free one?

Services like KaZaA or Morpheus may be free, but you have to dodge ads and porn. Worse, the quality of the songs varies; often you'll spend 10 minutes downloading something and find that it sounds awful, or the end is cut off. Many people will happily pay a buck for quality and ease. Indeed, on its first day, April 28, Apple Music Store reportedly sold more than 200,000 songs.

Why aren't more songs available--and why are some artists (Beatles, Rolling Stones, etc.) missing?

In some cases, artists have been reluctant to sell on the Net. But it will also take time to transfer the catalogs of the five major labels to digital. "We'll have more every week," Jobs promises. (This week's coup: the Doors.) He also wants to accommodate independent labels. As for the Beatles and the Stones, Jobs personally showed the store to Mick Jagger and Paul McCartney. "They both totally get it," he says, and predicts that the British invasion will eventually reach the Internet.

Why did the Net-wary record labels go for it?

For starters, Jobs had credibility: he's the head of not only a computer company but a movie studio. And music people are big Mac fans. So early last year the talks began. "We told them that to compete with KaZaA, we had to offer broad personal-use rights or it wouldn't succeed," says Jobs. "In the end they trusted us." The toughest thing for the labels to agree with, says the Recording Industry Assocation of America's Hilary Rosen, was "untethered downloads"--the ability to get music that you can copy onto CDs. "But the reality is that's what you have to do to compete," she says.

So have the record labels now embraced the idea of selling on the Internet?

Not totally--they see the Apple deal as an experiment. Since Macintosh's U.S. market share is only 5 percent, the risk is limited. (The Windows version of iTunes, which includes the store, won't be available until the end of the year.) In addition, music-industry executives say that the agreement with Apple is structured so they can pull the plug after a year. But in a sense, the Apple approach is the only thing standing between the labels and a distasteful, and probably ineffective, strategy of suing music fans who share music on the Net. (Last month a court decision at least temporarily allowed the outlaw music services themselves to continue.) If the Apple approach proves profitable, it could save the record labels from their own paranoia and hasten the inevitable: a legal transition toward ultraconvenient digital downloading as the standard way to buy music.

Who loses?

Well, if you're a retailer selling CDs, you can't be happy with the idea of your suppliers cozying up to Steve Jobs, who says, "Nobody I know wants to drive to a record store." And if you're Jeff Bezos, you might wonder why you didn't think of it first. But Amazon was caught sleeping, and now it's Steve Jobs who's running the coolest store on the Internet.