MusicMatch. BuyMusic. Rhapsody. Listen.com. Emusic.com. MusicNet.com. A new Napster, legitimized by Roxio, a vendor of multimedia programs. Wal-Mart. Even, it has been said, Microsoft and Virgin Entertainment Group.
Indications are strong that the companies behind the services have reason to think that profits can be made in online music. iTunes sold 20 million tracks in its first seven months of operation. Rhapsody’s 250,000 subscribers paid to listen to 28 million songs in October, up from 11 million in June. Between June and November, music lovers bought 7.7 million songs online, but only 4 million single-song CDs at stores.
The future looks good, too. Jupiter Research expects online music sales to grow to $3.3 billion by 2008. Forrester Research expects that within four years online music will account for 33 percent of the music industry’s sales. But behind the vaunted successes and the optimistic predictions lurk at least two big questions: Which online music vendors, among the nearly one dozen operating today, have found the business model that will guarantee they will be around in 2008 to share the profits? Can the for-fee services make a dent in the billions of musical tracks exchanged, at no cost, on pirate networks?
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