June 03, 2004

Music Download

Music Download Firms Don't Get It [Motley Fool Take]

By Mark Mahorney
June 3, 2004

I had my first go at paying to download music the other day and it left much to be desired. I didn't even look at Roxio (Nasdaq: ROXI) because after I wrote about its earnings, I was warned that its software was intrusive. Then, I eliminated RealNetworks' (Nasdaq: RNWK) Rhapsody and Time Warner's (NYSE: TWX) AOL because they both required that customers buy a subscription for the privilege of paying them again to download songs. Now I don't know about you, but it just seems wrong to have to pay someone to shop with them unless they have something I need and can't get anywhere else, like a mega-sized jug of cheese balls. (And who doesn't love that?)

Both Sony's (NYSE: SNE) Connect and Apple's (Nasdaq: AAPL) iTunes required that I download software, but with Sony, as far as I could tell, I had to download the software before I could even see what music it had to offer.

With the choices narrowed down to iTunes, Buy.com, and Wal-Mart (NYSE: WMT), I started my song search and found the search capabilities overly simple. I searched for Aerosmith's "Angel" (for my wife; if it were for me, it would have been something obscure and grungy from Toys in the Attic). Aerosmith has been around longer than I have, so there are many pages of songs to sift through. And searching on the song Angel comes up with about a thousand matches.

Then I found that none of the services had all the songs that I wanted. That's not their fault necessarily, as it's an artist and label issue. But, to get most of the songs on my list, I was going to have to use more than one service.

In the end, I went with Wal-Mart to save a buck, and I got what I paid for. Per the service, I had to read the help files in Microsoft's (Nasdaq: MSFT) Media Player to burn songs to a CD. It took three discs to burn the 19 songs. I then used another software to copy the songs from the three discs onto a single disc, which all fit fine. The service cost me three discs and a lot of time. I don't think I'll be downloading music again anytime soon.

Now my computer literacy is well above average -- not to brag -- but it says to me in a Peter Lynch sort of way that these services aren't ready for the average user yet. And therefore, much of the potential market is being left untapped and revenue is being limited. However, that also means there's potential for whichever company can step up and simplify the process.

The most likely right now is Apple because it's the current leading brand and its software is supposed to make burning simple, but if Amazon.com (Nasdaq: AMZN) were to enter the market, I suspect it would quickly become a leader, at least in simplicity and search capability, just as it is with books.

Fool.com: Music Download Firms Don't Get It [Motley Fool Take] June 3, 2004

Posted by Craig at June 3, 2004 09:29 PM