Apple iTunes Conference Call highlights

Apple CEO Steve Jobs announced the iTunes Music Store's one-year anniversary during a conference call with press on Wednesday. He spoke about the service's new features, in conjunction with iTunes 4.5's release, offered details about a revised digital rights management that increases the number of computers that can play iTunes-bought songs, and even joked around about the iPod's future.

Jobs indicated that iTunes Music Store has 70 percent marketshare for legal music single and album downloads. The service now sports 2.7 million song downloads per week, or about 140 million per year. When the service debuted a year ago, it sported about 200,000 songs. Now it has over 700,000. Jobs said that by the end of the year, Apple expects iTunes Music Store to tip the scales with a million songs.

Jobs then recounted many of the new features of the enhanced iTunes Music Store, which you can read about at MacCentral. New features include iMix playlist publishing, jewel case insert printing, lossless audio encoding and other capabilities.

iTunes DRM redefined

Jobs also discussed a change to Digital Rights Management (DRM) in music sold at the iTunes Music Store -- Apple has increased the maximum number of computers that can play those songs from three to five. "That includes not just new songs ... but every song you've ever bought in iTunes," said Jobs.

Jobs also explained that Apple has reduced the number of times that a user can burn the same playlist onto a CD from ten times to seven. Jobs said that the decision was driven directly by concerns about music piracy from the music publishing companies themselves. Jobs called the increase from three to five computers as "a much bigger deal" for Apple's customers than the CD burning reduction, which he doesn't anticipate will affect many users at all.

Increased prices, licensing FairPlay to other services

The industry has been abuzz with rumors and reports that music publishers want to see increased prices for singles and music sold online. Jobs said Apple will keep with the US$0.99 pricing structure for singles. "That's what customers want and that's what we'll deliver," he said. Jobs indicated that more than 40 percent of iTunes Music Store's songs are sold as albums, however, and said that Apple works with the music labels to make sure that whole albums are priced aggressively whenever possible.

RealNetworks Inc. CEO Rob Glaser's much-publicized recent e-mail plea to Jobs to open up licensing of Apple's FairPlay DRM system provoked a question about whether music labels have asked Apple to loosen the reins on the technology -- to enable other companies to make protected music that can be played on iPods, for example. Jobs said it's been a non-issue for Apple and its music publishing partners -- he attributes the large market shares of both the iPod and iTunes Music Store as the reason.

Jobs is also critical of music services that publish content by subscription. "Subscription services are not succeeding -- people want to own their music, not rent it," said Jobs. Jobs contends that the record labels aren't interested in licensing their content for subscription services that work with playback devices, like Microsoft's forthcoming "Janus" service.

On Europe and the future

"We'll be in Europe later this year," said Jobs, reiterating comments made by Apple VP Pascal Cagni earlier this month. "And obviously we'll be in places beyond that."

"Our next step is that we want it to make toast," quipped Jobs, in response to a journalist's question about Apple's future plans for the iPod. He said that "It's the music, stupid," is his mantra when it comes to development of the iPod, seemingly dismissive of suggestions that Apple should integrate video and other capabilities into the device.

In the past, it's been noted that iTunes Music Store's revenue doesn't produce as much profit for Apple as its higher-margin iPods -- but it's been unclear if Apple made any money at all on the venture. Jobs noted that the iTunes Music Store had a small profit this past financial quarter.

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