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Although record companies are loath to admit it, your days of walking into a record store and buying an $18 CD -- often because you like one song you heard on the radio -- may be coming to an end. The recording industry blames the downturn in music sales on the file-sharing phenomenon started by Napster and continued by its descendants, but the bottom line is that music lovers want more choices when they purchase and listen to music.

In the past few years, several online services have sprung up and attempted to provide legal and reliable alternatives to illicit music downloading. Mac users, however, have had limited options -- and nothing designed with the Mac in mind. To top it off, all these services are subscription based -- in most cases, you pay a monthly fee to rent music, a concept foreign to most music buyers. After all, when you buy a CD, you can listen to it for as long as you want.

When Apple announced the iTunes Music Store in April, few people were surprised -- not because widespread leaks had allowed every newspaper and Web site to predict Apple's move, but because with the underlying technology of QuickTime and products such as Final Cut Pro and the iLife suite, Apple has demonstrated its commitment to, and focus on, the digital lifestyle.

In this special report, we look at how the iTunes Music Store works, its pricing structure and selection oddities, what you can do with the music you buy, and the competition -- and we review the new iPods and iTunes 4 -- to find out whether Apple's foray into online music will be a successful extension of the digital hub.

Getting Started

The iTunes Music Store is a virtual shop where you can buy and download both complete albums and individual tracks from many major artists of different genres.

Logging On Launch iTunes 4 (which runs only in OS X 10.1.5 or later), and you'll see a new item in the Source pane, just above your playlists, called Music Store. When you click on this icon, the space normally occupied by your music files is transformed into a modified Web browser, complete with back, forward, and home buttons. It's through this interface (and this interface alone) that you connect to the iTunes Music Store.

Although you can begin to explore immediately, you'll need an Apple account to make purchases. In the upper right corner of the browser window, where it says Account, click on the Sign In button. This brings up a window that lets you use your existing account information to sign in (if you already have an account with the Apple Store). You'll then have a chance to verify your account information before logging in. If you don't have an Apple account, click on the Create Account button to register -- all from within iTunes.

After this onetime login, the Music Store remembers your identity and displays your login name in the Account window. Clicking on your login name lets you edit your account, view past Music Store purchases, and see how many computers you've authorized to play your purchased tunes (more on that later).

Browsing The iTunes Music Store gives you several ways to find music. Much like a brick-and-mortar record store, the home page has a changing assortment of albums, complete with album covers, prominently featured; they're listed under New Releases, Exclusive Tracks, Staff Favorites, and Up & Coming. Clicking on any cover takes you directly to the page for that album. From the same home page, you can also pick a genre -- Rock or Jazz, for example -- and be transported to its main page.

If you feel more comfortable searching the store as you would tunes on your hard drive, you can enter text into the Search Music Store box. You can also click on the magnifying glass inside the box, and choose Artists, Albums, Composers, or Songs -- or choose Power Search (at the end of the drop-down list) for more-refined searching. An Artists search for Frank Sinatra, for example, takes you to a page that lists his top albums (in the upper half of the window), and songs (in the bottom half). The song list displays only the first 100 matches, so it's best to use Power Search when you're looking for specific songs or albums.

The Browse button lets you begin with a genre, pick an artist, narrow your search down to an album, and then view the individual tracks in a separate window (you can also use the Search feature to get to this window). From there, you can click either on the small arrow next to the artist's name, to be whisked off to a page that shows everything available from that artist, or on the arrow next to the album, to see detailed information about that album.

This method works pretty well, although some artists are oddly classified, and many are listed in more than one genre -- flutist James Galway shows up in Alternative, Bill Cosby is listed in Jazz, and Boyz II Men finds its way into Latin. Spelling and capitalization inconsistencies also throw off searches. For example, the band Tower of Power is listed twice in the Rock genre, once with the word of capitalized and once with it lowercased -- and each listing brings up a completely different set of albums. There are also many album duplicates, especially in the Classical genre.

Another quirk may confuse you as you browse: while the Music Store lists release dates for most albums, they are the CD-release dates. For example, the Store lists Genesis's 1970 album Trespass with a 1993 release date., on the other hand, often shows both the CD- and original-release information.

Try Before You Buy For each track in the Music Store, Apple provides a 30-second streaming preview, including fade-outs -- so instead of picking up a CD at your local record store and hoping it contains that catchy tune you heard last night in a car commercial, you can be sure.

Keep in mind that the song preview doesn't necessarily represent the audio file's quality. Many streams sound tinny and as if they'd been run through a flanger, which adds a whooshing-airplane effect to music. But the quality of songs and albums we've purchased is much better than their previews led us to expect.

What's In Store

Two aspects of the Music Store aren't immediately apparent from casual browsing: the variety of artists and albums, and the format used for the music files.

Content The iTunes Music Store launched with 200,000 songs, mostly from the five major record labels: BMG Entertainment, EMI Recorded Music, Sony Music Entertainment, Universal Music Group, and Warner Music Group. Apple has divided this collection into genres such as Rock, Jazz, Classical, World, R&B, Country, Soundtrack, and Blues. The store also carries exclusive tracks from such artists as Eminem, U2, Bob Dylan, Fleetwood Mac, Alicia Keys, and Jewel.

At press time, Apple had added thousands of songs and promised that more would come on a weekly basis, but you still won't find the breadth of music that even a local record store might carry. There's no music from the Beatles, Led Zeppelin, Queen, or Madonna, just to name a few. And music from independent labels isn't included yet.

For many artists, you'll find only partial catalogs or incomplete albums. For example, many of the albums (all on the Columbia label) by Billy Joel, Bruce Springsteen, and Bob Dylan aren't available in their entirety (and those that can be purchased are for sale only by the track, not by the album). Apple says that this is due to licensing issues involving certain tracks, and to the fact that it takes time to add music to the Store.

Apple has not only added music but also taken it away. For example, we noticed that Radiohead's OK Computer album and several Van Morrison songs, which had been available from the Store at first, were no longer listed when we searched for them days later.

Format Instead of the popular MP3 format (created more than a decade ago) that most iTunes users are familiar with, the music you buy from the iTunes Music Store is in the Advanced Audio Coding (AAC) format. Developed in part by Dolby Labs, AAC creates higher-quality audio files than MP3, and at lower bit rates (so files are smaller) -- the result is that Apple's 128-Kbps AAC files sound better than MP3 files encoded at the same, or even somewhat higher, bit rates.

AAC supports multichannel audio and sampling rates as high as 96kHz -- leaving the door open for surround sound and better-quality files in the future -- and it requires less processor power to decode, so your Mac doesn't need to use as many resources just to play music.

Purchasing Music

Once you've learned your way around the iTunes Music Store and previewed some tunes, Apple hopes your next step is to buy something.

Song Pricing One of the Music Store's biggest selling points is 99-cent songs, but in reality, pricing is a bit more complicated.

Many of the tracks cost less than a buck, and they are a great alternative to buying an entire album when you like only one or two songs on it. But often, songs in the Music Store aren't available on their own -- you must purchase the entire album, just as you would from any record shop. Typically, you can't purchase songs longer than seven minutes as individual tracks. This affects jazz and classical albums disproportionately, as they tend to be made up of longer songs.

Occasionally, you can buy a longer track by itself -- especially when the whole album isn't for sale. Because of Apple's flat pricing of tracks, however, you'll find oddities such as The Who Live at Leeds, Deluxe Edition. The songs "My Generation" and "Miracle Cure" are each $0.99, even though the first is more than 15 minutes long and the second is only 12 seconds long.

Album Pricing If you like most of the songs on a disc -- or if you enjoy buying complete albums and letting unfamiliar songs grow on you -- you'll be glad the store offers album downloads as an alternative to track downloads.

Most complete albums in the iTunes Music Store cost $9.90 or $9.99. But some albums with fewer than ten tracks cost only as much as the individual tracks -- John Coltrane's Blue Train is $4.95 (five tracks) and McCoy Tyner's Inception is $5.94 (six tracks) -- while others cost more -- Pink Floyd's Dark Side of the Moon is $14.99 (nine tracks) and Mahler's Symphony no. 10 is $11.99 (five tracks).

One thing to remember: if you buy a track or two from one album and decide later that you want the entire recording, tough luck -- there's no upgrade path.

Checking Out When you're ready, buying a track or album is simple. First choose either the 1-Click or the Shopping Cart method of purchase in iTunes' Store pane, under Preferences. If you haven't logged in yet, do so now.

With the 1-Click method, you'll find a Buy Song button next to available tracks and a Buy Album button next to albums (or Add Song and Add Album if you're using Shopping Cart). Clicking on either button brings up a warning box so you can verify your choice -- although you can turn this feature off in the future, leaving it on can prevent accidental purchases. (If you're using a shopping cart, items are added to the Shopping Cart window in iTunes, and you get a similar warning when you finally decide to buy.) After you confirm your choice, the files begin to download in the background.

The first time you buy something, iTunes creates a playlist titled Purchased Music, and everything you buy ends up there (as well as in your Library). If any download cuts off, click on Check For Purchased Music (in the Advanced menu), and iTunes grabs the missing tracks.

You need a credit card with a U.S. billing address to buy music. Because Apple bills your credit card in cycles, your statement will show an aggregate charge for everything you've bought in a specific period (say, 12 hours) -- you won't have to worry about 20 charges for $0.99 each.

Know Your Rights Unlike the MP3 format, AAC allows true digital rights management. The AAC-encoded music you buy from the iTunes Music Store is tied to your Apple ID and password. You can play your songs on as many as three Macs, listen to them on an unlimited number of iPods (a free firmware update is required for older iPods), and burn them to audio CDs.

According to Apple, you can burn Music Store tracks onto audio CDs only from within iTunes. However, the latest versions of Charismac's Discribe and Roxio's Toast can also create audio CDs from Apple's protected AAC files -- as long as you burn the CDs on a Mac authorized to play the files. When you use iTunes to burn live albums or albums with songs that blend seamlessly into one another -- such as Pink Floyd's Dark Side of the Moon, which we used for testing -- there's a slight gap between tracks that ruins the flow. Discribe and Toast, however, let you create audio CDs without the gaps you get from iTunes.

The Competition

Mac users have other ways to buy music online, but there are some important differences with the Music Store. The one music vendor that supports the Mac, EMusic, doesn't sell songs or albums. Instead, it charges you a subscription fee of about $10 a month. EMusic lets you download as many MP3 files as you want and share them with as many machines and people as you want -- and because of that, many labels are reluctant to allow their songs on the service, making the selection less than ideal.

The other form of competition comes from applications such as LimeWire and Acquisition, which connect to a network of individuals sharing files. Music is posted and swapped without permission, in violation of copyright laws. Even if the legal aspect doesn't scare you (the Recording Industry Association of America recently sued four college students for copyright infringement after they'd shared MP3 files on the Web), it isn't easy to find this music. Naming isn't standardized, you can't preview songs or know the music's encoding quality, individuals sharing music leave the network without warning, and you often have to wait in long queues just to download a single track. Apple is banking on the fact that the time you'll save and headaches you'll avoid by using the Music Store will be worth $0.99 per song.

The Last Word

With its iTunes Music Store, Apple has shown a willingness to take chances by going in new directions or -- as is often the case -- going a giant step beyond what others have tried. What makes the Music Store so interesting is not that Apple is selling music (although that is a fascinating move for a computer company), but that it has entered a lukewarm area of digital technology that has in the past failed to convince record executives and capture the hearts and wallets of consumers.

If the 2 million songs sold by the Music Store in its first few weeks are any indication, Apple's selling model and the AAC file format sound sweeter to consumers' ears than EMusic or illicit file sharing. And when it's available to Windows users, later this year (along with a version of iTunes for Windows), the iTunes Music Store may soon be playing to a sold-out house.

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