Apple to press play on iTunes in Canada
http://www.theglobeandmail.com/servlet/story/RTGAM.20041125.witunz1125/BNStory/Technology/
Apple to press play on iTunes in Canada
By*RICHARD BLACKWELL
From Friday's Globe and Mail
Apple Computer Inc.'s hugely successful iTunes music downloading system is about to launch in Canada, establishing a powerful competitor to the Internet-based music services already in place in this country.
Apple's iTunes on-line music store, already up and running for customers in the United States and Europe, is expected to be open for Canadian audiophiles in the next few days. In October, Apple said it would launch in Canada in November, and a company spokesman said this week the company intends to meet that deadline.
It's still November; we'll launch in November, Apple's Natalie Kerris said.
The expansion of iTunes into the Canadian market will mean stiff competition for the three existing music services and it could help make a dent in the free file-sharing now plaguing the music industry.
Currently, Canadians can download music tracks from Napster.ca (a reconstituted legal version of the old free file-sharing service), Archambault.ca (owned by Quebecor Media Inc., and heavy on French-language music), and Puretracks.com (the first Canadian on-line music store, started last year by Toronto's Moontaxi Media Inc.).
The prices are generally around $1 per track, or slightly higher, and Apple is expected to be in the same range. Apple charges 99 cents (U.S.) in the United States, and .99 in Europe for most tracks. It claims to have sold more than 150 million downloads since its U.S. launch in April, 2003.
Kaan Yigit, president of Toronto technology market research firm Solutions Research Group, said the launch of iTunes in Canada should be good for all the existing Canadian players, at least initially, because it will sharply raise the profile of paid music downloading.
The Apple and iTunes brands, linked with the iPod portable music player, is the hottest combination of brands in the entertainment space right now, Mr. Yigit said. You've got such an iconic pop culture thing going on that it'll probably be the best thing that happens to the legal music downloading business in Canada.
Even Alistair Mitchell, co-chief executive officer of Puretracks' owner Moontaxi Media, said he thinks iTunes' arrival in Canada will be good news for the whole industry.
If you put three grocery stores on the same corner, everyone benefits, he said. It's going to drive a lot of excitement around the whole space.
Mr. Mitchell said Puretracks has some advantages over iTunes and that will help his firm stay competitive.
Puretracks files are compressed less than those of iTunes, he said, so they have better fidelity. And Puretracks has a huge roster of independent Canadian artists on its system that Apple can't rival.
While Apple's presence may give a boost to all players initially, eventually it may be bad for the smaller players, Mr. Yigit said. Ultimately, once [Apple] is established they will be the dominant player, like they are in every market they're in.
The big question, he said, is whether the expansion of the pay-for-play market will make a dent in free file sharing the bane of the music industry in Canada and around the world.
In the U.S., the music industry has filed lawsuits against music pirates, but similar legal efforts in Canada have been stymied by court decisions that have made it difficult for the industry to proceed. On Wednesday, Canadian musicians went to Ottawa to lobby for changes to the Copyright Act to control downloading.
While Apple's presence may help to make legal downloading hot for kids, Mr. Yigit said, it's unlikely to shift many young people away from free file-sharing. That's because a 17 year old has more time than money ... and I don't think they'll be filling up [their iPods] through the 99 cent download system, he said.
Mr. Mitchell disagreed, saying that people are already shifting away from illegal file sharing because it has become a very murky experience. With rampant viruses and spyware attached to the files, it's just a mess, he said.
David Basskin, president of the Canadian Musical Reproduction Rights Agency, which negotiated with Apple and the other on-line music players on behalf of copyright owners, said his organization stands ready to sign a deal with any company that wants to legally sell downloads. The overall goal in licensing pay-for-play systems is to reduce the amount of piracy, he said.
Mr. Basskin said his organization only recently initiated discussions with Apple regarding iTunes, and as of Thursday they were close to an agreement.
He said Apple likely waited until now to come into the Canadian market because it wanted to get established first in the United States and Europe, where the population base is greater.