National Post article
Music giant readies Canadian launch: Market braces for Apple's download division, iTunes
National Post
Wed 13 Oct 2004
Page: FP1 / Front
Section: Financial Post
Byline: Robert Thompson
Source: Financial Post
ITunes, Apple Computer Inc.'s hugely popular online music service, is gearing up for a Canadian launch that could come as early as next month, music industry sources say.
The launch of a Canadian iTunes store would dramatically alter the digital music landscape in Canada.
To date, only Puretracks.com, Archambault.ca and Napster.ca have operated in Canada.
ITunes, the world's most successful legal downloading service, with 125 million paid downloads in the U.S. since launching in April, 2003, skipped this country earlier this year over copyright issues. In June this year, Apple launched iTunes in Europe, selling 800,000 downloads in its first week.
Phil Leigh, an analyst with Inside Digital Media in the U.S., said Apple's iTunes, in conjunction with its iPod MP3 player, now defines legal downloading for many consumers.
"ITunes and the iPod have lived up to the hype," said Mr. Leigh, noting Apple controls more than 70% of the digital downloading market in the U.S.
An Apple representative has met with Canada's four major recording labels in order to secure songs for the service, sources say. The sources added the launch could be delayed until February if Apple can't get its promotional material prepared in time for next month.
Apple's Canadian officials said yesterday they do not comment on rumour.
Apple skipped Canada earlier because it could not reach an agreement on royalties with the Canadian Musical Reproduction Rights Agency Ltd., an organization seeking a tariff on digital music sales.
But it is now believed Apple will go ahead with its Canadian plans despite the uncertainty over the copyright issue.
Mr. Leigh said Apple will likely unleash a marketing blitz to promote an iTunes launch in Canada.
"It makes sense for them to be really aggressive in promoting iTunes because it also promotes iPod sales," he said.
Alistair Mitchell, co-chief executive of Puretracks.com, the first legal downloading service in Canada (it launched last year) said he has heard rumours of an iTunes launch and has noted an increase in advertising in Canada for the iPod.
However, he believes increased interest in digital downloading should be beneficial for Puretracks, which already has partnership arrangements with Bell Canada and TELUS Corp.
"I think they'll have a great impact on the space because of the money and marketing they bring to the area," Mr. Mitchell said.
Mr. Mitchell would not disclose how many downloads Puretracks has had to date. Puretracks.com is owned by Moontaxi Media Inc., Records on Wheels, Key Publishers, Universal Music Canada and EMI Music Canada.
Mr. Mitchell said downloads on Puretracks.com are of a higher quality than what iTunes is offering in the United States, a factor he expects consumers will notice.
Mr. Mitchell would not say how Puretracks.com plans to respond to the launch of iTunes.
"I'll leave that as an element of surprise," he said. "But it'll all be about promoting our quality."
