iTunes Music Store comes to UK, France, Germany

Apple on Tuesday opened for business its iTunes Music Store to customers in the UK, France and Germany. Apple said that a European Union version of the store is coming this October. Music is priced at €0.99 or £0.79 per track. The iTunes Music Store launches in the UK, France and Germany with more than 700,000 songs in its catalog, with songs from popular commercial artists represented by the five major music companies as well as dozens of independent record labels.

Features and capabilities in the iTunes Music Store are the same as its U.S. counterpart, with identical Digital Rights Management (DRM) capabilities: Music bought through the store can be played on up to five computers; single songs can be burnt onto CDs an unlimited number of times; the same playlist can be burnt up to seven times and an unlimited number of iPods can be used as well.

AOL Europe users can use their existing screen names and passwords with direct links to buy songs, and Apple plans to offer exclusive recordings from Sessions@AOL and AOL's Broadband Rocks to iTunes Music Store customers in the UK, France and Germany later this month, as well.

Though Apple's rival, Napster LLC, was out of the gate first with a digital online music service in the U.K., unveiled on May 20, Napster has yet to launch localized European versions of its service outside of the U.K. Furthermore, Apple has already established a toehold in the U.K. with its iPod music player. The player has proven enormously popular in the U.K., accounting for around 17 percent of global iPod sales though December of last year.

But the iPod is facing increased competition from players that support Microsoft Corp.'s WMA (Windows Media Audio) format, and also from RealNetworks Inc.'s media player, which includes a digital music store that supports the AAC (advanced audio coding) format. AAC is the same format used by Apple for the iTunes service, though Apple's Fairplay digital rights management system keeps RealNetworks services from being played over an iPod. Both AAC and WMA are formats for storing compressed audio data.

In April, Jobs rejected overtures from Real Networks to make the services interoperable, saying that such a move would make no business sense for Apple.

Apple has sold over 85 million songs through iTunes in the U.S. and currently holds 70 percent market share of all legal downloads, Jobs said on Tuesday. Apple's CEO said earlier this year that the company would not launch versions of iTunes Music Store in Europe until the company was certain success rates could equal those already experienced in the U.S.

The U.K., French and German markets combined account for 67 percent of current European music sales and 23 percent of global music sales, Jobs said. And according to the British Phonographic Industry Ltd., online music users in the U.K. have legally downloaded over 500,000 music tracks already this year, through companies such as On Demand Distribution PLC. And further competition will come from Sony Corp., which plans to launch its Connect music store in the U.K., Germany and France at the end of June.

But Jobs said that Apple feels its biggest competition in the digital music space is from piracy. "Piracy has brought the U.K. digital music market to its knees. If you are going to compete with piracy, you have to understand it and offer something better," he said.

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Updated 6/15/04 12:40 pm: Analysis of Apple's rivals and comments from Steve Jobs added.

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