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Last Updated: Saturday, 27 December, 2003, 01:48 GMT
2003: Online music comes of age

By Darren Waters
BBC News Online entertainment staff

In the not-too-distant future when compact discs are museum pieces and vinyl records are near fossils, 2003 will be remembered as the year digital music stepped into the mainstream.

The latest albums by artists such as Beyonce, Radiohead and Coldplay can now be bought online from a host of different music websites while chart singles can be bought for as little as 99 pence or less in the UK.

Apple iTunes homepage, BBC
ITunes service has been hugely popular since it launched
Songs can be downloaded on to a personal computer, copied on to CD, or mini disc or even a portable mp3 player with a click of a button - amounting to what is a genuine revolution in the way people use and consume music.

Apple's fashionable iPods have become a familiar sight on commuter journeys, while ever-shrinking mp3 players are one of the most requested presents this Christmas.

Many among the computer literate will find these mass market developments less than startling - downloading music has been widely popular among the tech savvy for many years.

But until recently the only way to obtain songs online was to breach copyright and effectively pirate the music.

But slowly, and surely, the big record labels have woken up to the consumer demands for online music and there has been a genuine rush in 2003 to provide such services to music lovers.

The catalyst was piracy, falling revenues - global CD sales fell to a record low in 2003 - and the intervention of a computer firm with a vision.

Mark Mulligan, an analyst with Jupiter Research, said: "A lot of the important building blocks have now been put into place.

"One of the biggest barriers was licensing agreements - the big issue was agreeing what consumers could do with their music after they had downloaded it - and this has now been largely surmounted."

Key developments in 2003
Napster logo
February: AOL offers download service
April: Apple launches iTunes in US
May: Online price war begins as Listen.com cuts prices to 79 cents per song
June: RIAA sends cease and desist notices to downloaders
July: Illegally produced CDs hit one billion a year mark
August: Rolling Stones put music online
September: RIAA sues file-sharing users and iTunes sells 10 million songs
October: Apple launches iTunes for Windows and Napster is re-born
November: MTV announces plans for online music service
December: Coca Cola announces plans for online music service

"It was the ability to burn or copy onto another device that was crucial."

High-profile services such as MusicMatch and iTunes have succeeded in convincing record labels to relax their licensing agreements and give music lovers more control of their music.

But it was a long and drawn out process and Apple's chief executive Steve Jobs did more than most to win them over.

When Apple launched its iPod in October 2001 few people envisaged the impact it would have had on the music industry.

Effectively a device for storing music files, the iPod helped kickstart a rush to move music from the compact disc to the portable hard disc drive.

In an effort to boost iPod sales, Apple launched its own online music service in May 2003, offering music lovers a wide range of tracks for 99 cents.

To increase the use of iPods Apple needed to convince record companies to allow their music to be not just downloaded but also transferred to portable devices with few restrictions.

"It's fair to say that Apple has caused a tidal wave of change in the music industry," said Mr Mulligan.

Apple iTunes' Steve Jobs at launch
Apple's iTunes is now available for users of Windows XP and 2000
Where Apple led, others followed - and as things stand at the end of 2003 consumers can download, copy and move their music across a host of devices without fear of infringing copyright.

Like the explosion of growth in the internet in the late 1990s, critical mass is approaching with companies such as MTV, Coca Cola and Microsoft keen to offer their own branded online music services.

Yet despite the hype surrounding it, iTunes still only offers a small fraction of what can be obtained from file-sharing sites such as Kazaa, which can be used to exchanged pirated music.

Such peer-to-peer sites are not going to vanish overnight, if at all, despite the efforts of the Recording Industry Association of America (RIAA).

The last 12 months will also be remembered for controversial tactics by the RIAA to crackdown on computer users who exchanged music online.

The RIAA sued hundreds of people who they accused of piracy, threatening huge fines if people were found guilty - many of those accused reached settlements out of court.

Now that the ground work has been laid, the coming years will see increased take up of legitimate services.

Mr Mulligan said he expected Microsoft, Napster, iTunes and Rhapsody to launch services in Europe in 2004.




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