Music Wars

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This is Celia Hirschman with On the Beat for KCRW.

First it was iTunes: 99¢ bought you a track. Amazon and Walmart went head to head with the Apple site, competing strictly on price. Meanwhile, Rhapsody, Napster and eMusic offered a monthly fee for a buffet of music. Zune, the Microsoft company, tried to serve both masters. They offered both individual track sales and feast options; and Lala built their model on consumers paying pennies to stream and store music.

Each of these companies has their own vision of building a business. Eighteen months later, it's getting harder to see who's winning. ITunes has dropped from 90% to 69% of the digital music market, and everyone else is battling for their piece of the pie. But regardless of the model, music, with its massive popularity and low consumer price point, is the most diverse market on the web.

And oddly enough, it's about to get even more complicated. While many companies have yet to announce their official plans, rumors run rampant about the impending changes in the landscape. First, MySpace Music, owned by Rubert Murdoch's NewsCorp, has been an ad-supported model, streaming music free to consumers. That may soon change, as Mr. Murdoch has just announced that he's not interested in giving away content.

Meanwhile, Google has launched their own music search feature, streaming on demand tracks thru Lala, Pandora, Rhapsody and MySpace. The brilliance of Google's search is they aren't paying for the content; Lala, Pandora, Rhapsody and MySpace are. Wouldn't you pay to be at the top of a Google search engine?

And of course, Google's foray into music search will only be further enhanced by their Droid Smartphone. One way or another, Google is in the music business.

Spotify is an extremely popular music streaming service that stole the hearts of many Europeans. Started in Stockholm in 2006, the site was founded by two successful Internet entrepreneurs. But the US launch of Spotify has yet to be announced. That's because streams cost money and Spotify hasn't been able to sort out a financially viable ad supported model here. Instead, Spotify will launch with a subscription model in the US sometime next year.

And just to confuse things a bit more, iTunes and Live Nation just announced a new partnership where Live Nation delivers live and exclusive content to iTunes.

Not to be outdone, the majors are expected to join together to launch their own version of YouTube, called Vevo. The site is scheduled to go live any day now featuring music videos, concert footage, interviews and backstage content. Who's the financial muscle behind Vevo? The government of Abu Dhabi.

So we've gone from financing music through record labels and publishing companies, to media conglomerates, concert promoters and now international governments. One thing is very clear. We're not in Kansas anymore.

This is Celia Hirschman with On the Beat for KCRW.