iTunes shores up defences

<div class="section0"><div class="Normal"><span style="" font-size:="">SAN FRANCISCO: When Kevin Britten won Apple Computer''s sweepstakes for downloading song number 100 million from the iTunes service last week, the 20-year-old Kansas resident disappointed customers who had been tracking iTunes sales in hopes of winning a Mac, an iPod music player and 10,000 free songs.</span><br /><br /><span style="" font-size:="">But with the arrival of new competitors in online music this year and powerful new threats from Microsoft and others, Apple is going to have to come up with a lot more than contests to keep market share. The company is focusing on making its music service as much an experience as a store, and is enhancing features to turn casual browsers into repeat customers. </span><br /><br /><span style="" font-size:="">"The question is: ''How does Apple keep people coming back?'' " said Mike McGuire, an analyst at GartnerG2, a market research and consulting company. "Music customers and listeners want to be active participants. Otherwise, you''re just a store." </span><br /><br /><span style="" font-size:="">Eddy Cue, Apple''s V-P for applications and Internet services, said the company was adding features to Apple''s site to allow users to become more engaged and to communicate more actively with one another. The goal is to enhance iTunes''s reputation as a destination that can help customers find music they might like. "It''s all about making it easier for people to find music," Cue said. "One thing we know is it''s addictive."</span><br /><br /><span style="" font-size:="">Perhaps the most significant is iMix, which lets iTunes users post their favourite play lists for others to see and copy. Users of iTunes can then download the same mix, or they can hear 30-second samples first. "IMix is an attempt to create community," McGuire said. "It''s an important tool." </span><br /><br /><span style="" font-size:="">Two weeks ago, Apple added iTunes Original, in which an artist records a track specifically for Apple. A new song is posted every two weeks. Similarly, Apple might assemble a collection of an artist''s singles into four- or five-track mini-albums, as it did recently with Sarah McLachlan''s music.</span><br /><br /><span style="" font-size:="">Apple is hoping it can persuade other popular artists to sign similar deals. For the musicians, Cue said, iTunes can provide an outlet while in between albums. To Apple''s rivals, however, iTunes is mostly a service created to sell iPods. </span><br /><br /><span style="" font-size:="">"They''re not a music company," said Dana Harris, a spokeswoman for Roxio Inc, whose primary offering is a subscription service for $10 a month. "For them it''s all about the device."</span><br /><br /><span style="" font-size:="">Apple executives have long acknowledged that at 99 cents a song, nearly all the revenue is going to the record labels. But for now, Apple does not appear to mind that iTune''s chief financial contribution is that it drives iPod sales. </span><br /><br /><span style="" font-size:="">"We couldn''t be happier with the success of the music store," Timothy D Cook, executive V-P for Apple operations, recently told analysts. </span><br /><br /><span style="" font-size:="">With 70% of the market for legal music downloads and 45% of the market for portable music players, Apple''s nearest competitors - including RealNetwork''s Rhapsody, Roxio''s Napster and the Sony''s Connect - do not attract anything close the traffic on the iTunes network. </span><br /><br /><span style="" font-size:="">But Apple''s lead will not go unchallenged. Sometime before the end of the year, Microsoft is expected to begin its push into the music download business. Microsoft will attempt to catch up with Apple by deploying its new Windows technology, called Windows Media Digital Rights Management, that will let users more easily transfer song collections from their PCs to their portable MP3 players.</span><br /><br /><span style="" font-size:="">The arrival of new Windows technology, also known under its code-name of Janus, could have a huge impact on iTunes, because it will make subscription services more attractive, said Richard Wolpert, chief strategy officer at RealNetworks. </span><br /><br /><span style="" font-size:="">NYT News Service</span></div> </div>