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Apple's Appeal to Digital Downloaders

Techstination feature for Friday, May 9, 2003

Apple's appeal to digital downloaders. Bloomberg Boot Camp, a report on today's technology. Apple ... like many others in the business... .has been having trouble selling computers these days. So the company is hoping to make money selling digital music. It has launched its iTunes Store for Mac users and plans to be open to Windows users as well buy the end of the year... selling music for 99 cents a song. But how can the company convince so many people who have been downloading music for free to start paying? Apple marketing director Peter Lowe...

"I don't think there's any question that there are some set of people who are out there, who, the reason they use these file sharing services is they want stuff for free. They're stealing and they don't mind. But for the vast majority of users, it's simply been that there's been no legal alternative. No compelling legal alternative to the file swapping, file sharing services that are out there. All of the existing services have been subscription based. They've had various restrictions on how people can use their music."

The iTunes Store places far fewer restrictions on what you can do with digital music once you purchase it. So how big of a business could this be for Apple?

"We think it could be a huge business. Again, we think there's a huge, pent up demand of people who want to be able to get music more conveniently than getting in their car and driving to the record store. More conveniently than spending fifteen minutes on these file sharing services just to download perhaps the wrong song."

But Apple still faces the dilemma of how to sell online music to teenagers... who for the most part don't have credit cards... and find the songs they want are just a couple of mouse clicks away. Bloomberg Boot Camp, I'm Fred Fishkin.