Tommy Tompkins is darting around MacWorld Expo, crazy with enthusiasm, looking for the latest gadget that lets him plug his iPod into his car stereo. Trailing Tompkins in this frenetic bazaar of computer stuff, held this past January in Moscone Center, I felt as out of place as if I were in Bangladesh. But Tompkins, the gregarious, 50-year-old arts editor of the Bay Guardian, turns out to be the perfect introduction to the remarkable success of Apple's portable music player, the iPod, and its life stream of songs, the iTunes music store.

"I love iTunes," Tompkins says. "It's convenient. It's fast. It's changed my life."

The online store allows you to choose from more than 500,000 songs in myriad genres and download the ones you want to your computer. Each song costs 99 cents and with a single click can be on your hard drive in less than a minute. Artists and record companies get a cut of your iTunes purchase, as opposed to when your kids download songs through one of the popular file-sharing programs like the original Napster or the current Kazaa, the satanic bane of the record industry. Time magazine named the iTunes music store "Coolest Invention of 2003."

In three months, Tompkins says with a grin, he has downloaded $1,153 worth of iTunes songs onto his Mac and fed them into his iPod, which he also hooks up to a stereo to fire up the spinning class he teaches. But wait: Is he insane? He's got thousands of CDs buckling rows of shelves in his house. How could he possibly need more music? "In one case," he says, "I was up in Redlands. There was no record store in sight, it was raining, and I really wanted to hear Derek & the Dominos. So I downloaded the whole Layla album."

Oh, goodness. Why didn't he pirate the ancient Layla with one of the file-sharing programs? "I don't want to get arrested," he says, referring to the recent rash of lawsuits brought by the Recording Industry Association of America against soccer moms and other unsuspecting downloaders. "Besides," Tompkins says, "since I can afford to, I want to pay for music."

The record industry couldn't dream up a more ideal consumer than Tompkins. He signals the return of the adult music buyer, who has long been missing in action. And for good reason, as record companies have been smitten with prancing teen popsters whose slight talents are exhausted by one or two songs. No wonder CD sales have tanked in recent years and the record industry has lost hundreds of millions of dollars. Kids have fled to Kazaa, which lets them download the one Britney Spears and one Jay-Z song they want for free. Buy an album? Like, whatever.

Signs that the record industry may be growing up have surfaced in the past year, however, with hit albums by jazzy balladeer Norah Jones and Rod Stewart, who scored with retro versions of songs by Gershwin and company. Likewise, the iTunes store appears crafted for music fans who are old or informed enough to welcome new recordings by semilegendary British folk-rock guitarist Richard Thompson, recently featured on iTunes' opening page.

Never one to understate a case, Apple CEO Steve Jobs sees the iTunes store as a righteous savior, ready to slay the beast of music piracy. "We're not going to pretend it doesn't exist," he said last October at a press conference at Moscone Center. "We're going to compete with it." The iTunes store is "the birth of legal downloading," he said. It has "started the revolution."

Jobs may be stretching the truth as elegantly as Eric Clapton does a guitar string, as legal downloading was born years before iTunes with such sites as Liquid Audio and MusicNet. But there's no doubt the Cupertino computer maker has sparked both the record industry and music lovers. It alone has managed to usher the idea of downloading music past the teens and twentysomethings and into adult life. Will we go for it?

Well, I had never downloaded a song until earlier this year, when I updated the operating system on my Mac and accessed the iTunes store. And my first visit was kind of exciting. I saw a short feature on Sleater-Kinney, the Portland trio that in recent years has done more than any band to keep my faith in rock alive. Along with other artists like Michael Stipe, the Sleater-Kinney members were asked to choose their favorite songs in the iTunes store. Pretty smart, I thought. So I hung around online and bought a few songs by a Scottish band I had long been curious about called Mogwai, sort of a cross between the ambient music of Brian Eno and the menacing sound of a police scanner. Intrigued, I wanted to learn more.
 
For starters, how did Apple get to be the star of the digital music show? "Incredible marketing," says Ted Cohen, the Los Angeles-based senior vice president of new media at EMI Music North America, parent label of the Beatles, the Rolling Stones, and Radiohead, to name a few. Cohen is perhaps the most highly respected advocate of Internet technology inside the record industry. "Last October, I came to San Francisco and took BART from the airport to Powell Street. I thought I was in Blade Runner—every sign in the station was for iPod. It was like, ‘In the future, everything will be iPod!'"

Cohen is talking to me on a conference call with Jeanne Meyer, EMI's senior vice president of corporate communications. She chimes in, "Until last year, the industry was skeptical that people would pay for legitimate music online. At the same time, it was subversive and cool to download songs without paying for them. So one of the genius things about iTunes is that it made buying songs cooler than stealing them. It was a fantastic way to shift the mood of buying legal music online from uncool to cool."

Ah, yes, the cult of the Mac, the chosen tool of pop culture's cognoscenti. Or something like that. But it's true: Although Macs constitute less than 5 percent of the personal computer market, the iTunes store, which launched last spring (a Windows version was made available in October), has shown that people are willing to pay for music online. Well, OK, people with the most recent software on their computers, high-speed Internet connections, and money to burn.

Beyond the killer marketing, iTunes' success owes a lot to the power of Jobs. The record companies wanted to be in the band with the guy who runs Pixar, the studio behind the animated movies that have made more money than the GNP of several small countries. In 2001 and 2002, Jobs put on a dog and pony show for the big five record companies. No longer independent operations where you might see Smokey Robinson hanging around in the hallways, with the music of James Brown coming through overhead speakers, record companies today are behemoth corporations, where executives study spreadsheets in glass offices, listening only to the hum of computers.

When Jobs met with EMI, which owns Capitol and Virgin Records, among other labels, he was looking to license the Beatles, the Stones, and popular new kids like Coldplay and Norah Jones. How was he greeted? "I refer to the meeting with Steve Jobs as a coffee event," says Cohen. "If someone said, ‘You can go, but you have to serve coffee,' I would say, ‘Where's my apron?'"

Jobs didn't score the Beatles, whose bean counters are still figuring out how much money they can make in the Internet world, but he did come away with the Stones, Coldplay, and plenty of other top acts, just as he did at the other four major record companies. Two months after it launched the music store in April last year, Apple, admirably, hosted a summit for independent labels, 250 of which contributed songs. Thus Sleater-Kinney.

"Apple's success lit a fire under everybody else," says EMI's Meyer. "It was a galvanizing moment." Competitors at other online music sites have to agree. In the wake of iTunes, admits RealNetworks executive editor Tim Quirk, who oversees the intriguing Rhapsody, "all of a sudden people from record labels who didn't return my calls were pursuing me to promote their bands in this new way."

But in truth, the Apple coup is not as dramatic as it appears. To begin with, while Apple got a lot of promotional mileage out of the signings—Mick Jagger was interviewed via satellite video by Jobs at the October press conference—Cohen had released the same EMI material to a dozen other online stores. "We made a concerted effort to make our music available on an equal basis—the same catalog to everybody at the same time," he says.

You can now find many of the same artists and songs from all labels on the sites of iTunes' competitors. Those include Rhapsody, a newly legal Napster, Musicmatch, and soon such big players as Microsoft and Sony. Currently, no business service exists to calculate downloadable music sales, but Cohen estimates that downloaded songs tallied over $100 million last year, out of a total $12 billion in music sales.

Not a bad beginning, but still a drop in the ocean of file sharing. Apple will sell 50 million songs by this spring and give away 100 million more in a splashy promotion. "But by the most conservative estimate, people are acquiring songs on the various file-sharing sites at a rate of about a billion songs a month," says Eric Garland, CEO of Big Champagne. Started four years ago by Garland and his tech-savvy pals, Big Champagne, based in Beverly Hills, has written some fancy software to penetrate the chaotic file-sharing universe and track which songs millions of geeks are requesting from one another. Garland consults with record companies and radio giant Clear Channel, both of which, he says, are anxious to learn which songs are being shared online.

"I have reams of data that stand as tall as I do," he says. "They conclusively demonstrate that file sharing is now, and has always been, since the time of Napster, steadily gaining in both the number of users and volume of material acquired. Apple doesn't even constitute a measurable sliver of the pirate market."

Need corroboration? In 2003, the fourth most popular search term on Yahoo was Britney Spears, the third was American Idol, the second was Harry Potter, and the first was Kazaa.

Garland can be counted among a bevy of computer and music industry analysts who believe the record companies are going after Kazaa and its ilk in all the wrong ways. Record companies, they argue, are living in the past, where the only way to turn a profit was to sell plastic things like LPs, cassettes, and CDs.

"Guess what?" says Neil Young fan Mike McGuire, research director for media at GartnerG2, a business analysis firm. "That all went away five years ago." Vaporized in the Napster explosion, which transformed the Internet into a worldwide musical swap meet. So record companies, says McGuire, locked into a business model that's 100 years old, "are going, ‘Holy shit, what should we do? Oh, sue people!'"

While Apple is showing that record companies can ring up the cash registers in cyberspace, the companies are still tiptoeing into the virtual world. Fearing that music fans will download songs, endlessly duplicate them, and swap them freely in the unruly digital universe—further cannibalizing CD sales—the record companies have cooked up a batch of restrictions under the rubric "digital rights management."

Songs bought on iTunes, for instance, are encoded in a format that works only with Apple stuff. Further, you can play iTunes songs on only three authorized computers at a time and burn a playlist of songs on CDs no more than ten times. "Ripping" iTunes songs from CDs into a format compatible with non-Apple gizmos will kill the songs' sound quality.

These are understandable restrictions, says Garland, but shortsighted. By not allowing fans to do whatever they want with the songs they buy online, the record industry is blowing its chance to make a mint in cyberspace. "The iTunes store is the equivalent of a Wal-Mart in Death Valley, as opposed to what it could be, which is a Wal-Mart in every big city in the country," says Garland. What's more, an exclusive market means prices must remain high to turn a profit. Currently, record companies command 65 cents per song from Apple and others.

So why don't the record companies can the software restrictions and offer songs at a much lower price? "Because they're terrified their business will go away," Garland says. "Which is true, unless they adopt the attitude that instead of gouging the one in ten active music buyer, they make more music available to ten out of ten people at a very low price." Eliot Van Buskirk agrees. He's a senior editor at Cnet and author of Burning Down the House: Ripping, Recording, Remixing, and More, about digital music. If the companies released songs in a standard format, Van Buskirk says, both they and the sites "could drop the price, see their volume surge, make more money, and stop more people from breaking the law."

"Yeah, and you could sell a lot more Mercedeses if you sold them for $1,000," says EMI's Meyer. "That's not how the business works. You invest in artists, you develop them, it all costs a lot of money." The 99 cent price tag, she says, is fair to everyone. "It allows the artists to be paid, the record company to be paid, and consumers to have all this fantastic music that is getting harder and harder to find at retail stores. How can you argue with the intrinsic value of a 99 cent song?"

Music fans may well argue with other software restrictions in the virtual music stores—the ones that ensure songs downloaded on iTunes, for instance, will play only on the iPod, not on the many portable (and less expensive) devices made by Dell and other PC-based outfits. Ditto songs from Sony's forthcoming music store, Connect, which will play only on portable devices with Sony-licensed technology.

But don't blame the record companies for handcuffing songs to certain players, says one record company executive, who asked to remain anonymous. "This is what Apple was pushing. The labels agreed to go along with it as a way to get the digital services off the ground. It was very much a business strategy by Apple and Sony to sell more hardware."

The cold truth about the iTunes store is that it was designed to sell iPods, not turn a profit on its own. "The dirty little secret of all this is there's no way to make money on these stores," Jobs told Time. Wall Street analyst Charles Wolf told Time that a top-of-the-line, $499 iPod turns as much as a $175 profit.

Face it, says analyst McGuire, Apple didn't create the iTunes store "because they wanted to change the music business. They did it because they wanted to sell widgets. It's good business." Indeed. Apple recently announced it has sold more than 2 million iPods.

"All the market research shows that people predominantly listen to music on the go—in the car, exercising, traveling—and less and less at home," says Chris Bell, Apple's director of product marketing for iTunes.

It's a rainy afternoon in Potrero Hill, and inside the editorial headquarters of Rhapsody, I glimpse a more genuinely futuristic way of buying and hearing music. (The industrial-chic offices, however, are a flashback to SoMa circa 1999.) It's a view offered with competitive zeal by executive
editor Quirk, once better known as the lead singer of the wiseacre rock band Too Much Joy, whose albums include Cereal Killers.

"The Apple iTunes store is yesterday disguised as tomorrow," Quirk says. "It's no different from ordering a CD from Amazon. The only difference is that you don't have to wait for the mailman."

Sign up with Rhapsody (www.listen.com), pay $9.95 a month, and get access to nearly half a million songs, or 35,000 albums. (The selection of songs, Quirk promises, will continue to grow.) It's like creating your own radio station—you can play any song at any time. Select Cat Stevens, followed by the Wu-Tang Clan, and the music instantly streams through your computer. If you're ambitious, you'll wire your computer to your stereo. Record companies earn a penny each time a song streams through Rhapsody; currently, the site handles about 1 million streams a day. Pay an extra 79 cents and you can download a song to burn onto a CD.

I sat with Quirk as he walked me through Rhapsody and was caught up in his enthusiasm for a "celestial jukebox." In a couple of years, Quirk says, when the digital world becomes even more wireless, "we can stream Rhapsody to you over your cell phone, your handheld computer, your car, or even a boom box at the beach. Who'd need an iPod? The concept of owning your music, carrying a physical copy of it with you from place to place, becomes unnecessary. All you need is a ‘card' to our Alexandrian library of music and you can listen to it whenever you want and from wherever you are."

It's a fascinating concept. Apple doesn't think people will go for it. At the October press conference, Jobs declared that people have "told us over and over and over again, they don't want to rent their music. They don't want subscriptions." I'm not so sure.

Rhapsody currently has a fairly paltry 180,000 or so subscribers. But maybe that's just because having a celestial jukebox in your home will take some psychic adjustment, like having a child. Before you know it, it feels like the most natural occurrence in the world. To me, Rhapsody sounds more exciting than iTunes—although I'd have to join the PC world, as Rhapsody has no immediate plans to create a version for its rival Mac.

Perhaps the real reason I'm drawn to Rhapsody is that it allows you to listen to whole albums. Years ago, I never jumped on the Napster bandwagon because, well, I think artists should be paid. Plus, I believe the iTunes store, and even the file-sharing sites, reduce music to a giant warehouse of scattered singles. You plow through them and pick up the stray song that strikes your fancy. CDs of mixed songs are more fun to make for your friends than listen to yourself. After a few spins, they almost always sound unsatisfying. When I confess to Big Champagne's Garland that I love albums, he laughs and says, "You, my friend, are a dinosaur!"

But listen: The most downloaded song in 2003 on both the legit and pirate sites was Outkast's "Hey Ya." It's a sensational song, sporting a funky groove that fills you with good spirits ("Don't want to meet your daddy / Just want you in my Caddy"). But it gains so much more sensuality and hilarity in the context of the entire Broadway show of hip-hop that is the Speakerboxxx album. I don't even think of "Hey Ya" as a single and wouldn't bother going online to get it.

You can buy whole albums on iTunes for $9.99, although I can't quite figure out why you'd want to. I don't want to download an album just to listen to it on my computer, nor go to the trouble of burning it on a CD and playing it on my Walkman. It's also frustrating to find that at times you can't even buy whole albums, only select songs, as with many Prince albums. Besides, I love wandering through the dingy aisles of the cavernous Amoeba record store.

Now that I think about it in personal terms, the iTunes store really is pretty worthless without owning an iPod. Clever folks, those Apple marketers. Their revolution is not about scuttling musical piracy or offering a dazzling array of music online. It really is about selling hardware.

But here's my confession: As one who loves to listen to music while roaming about in the mad world, I bought an iPod. Now I bop down the street with hundreds of albums in my pocket, click on Mozart's Piano concerto no. 25 in C, and feel as light as the wind. All of those albums, mind you, have come from CDs, which I loaded into my Mac and transferred to the iPod. And so far I see no end in sight to filling my iPod that way. Still, it's nice to know the online store is out there. Should I decide to go Zen and cut the material clutter of CDs from my life, I may join the iTunes revolution.


The Artists Sound Off
What two san francisco musicians—one old lion, one young buck—think of downloading songs for free.

Steve Jobs pitches the iTunes music store as a path to good karma. "You are supporting artists," he says. "You are not stealing." The Grateful Dead's Bob Weir, 56, happy owner of an iPod, agrees. But Justin Munning, 26, singer and guitarist for Ten Mile Tide, a folky pop band whose two albums, Flow and Midnight Is Early, are influenced by the Grateful Dead, sees file-sharing sites like Kazaa as godsends of promotion, karmic retribution for the hits-only playlists of radio and MTV.

BOB WEIR Grateful Dead
It's a moral issue with me. I believe in honoring what I love. So I'm not going to rip off artists that provide me inspiration. If a guy can't make a decent living making music, he's going to have to go back to bagging groceries or working on that MBA. What does that say for the future of music? If people won't buy it today, it won't be here tomorrow.

Isn't file sharing a new twist on the Dead's famous practice of allowing fans to tape live shows and swap them? It's way different. To do a show, we don't go into a studio for three months, spend a couple million bucks, and carefully make an hour's worth of music. Live, it's casually performed for the audience. As Jerry said, once we're done with it, it's theirs.

Would you give away your songs online if you were a young band again? I still think it's shortsighted. If you choose to make records because you need to make a living and hone your musical expressions, and that living's not available to you because of file sharing, then I don't think [making records] is going to be worth it to anyone.

JUSTIN MUNNING Ten Mile Tide
As an independent band, we feel that if people can't download our songs, they're not going to know them. It's not like we're on the radio. We want as many people as possible to hear our songs. That's why we made them. People like that you trust them to download your songs, and, if they want, they buy a CD to support you.

It's all about promotion, then? Yes. Our songs have been downloaded 10 million times on Kazaa. It's increased our website traffic from 400 hits a month to 10,000, and we've sold 400 CDs in the last six months. We also booked a national tour around emails we got from different regions in the nation. Maybe 20 people at every show heard about us online. A lot of people who downloaded our stuff on Kazaa always bought a CD at our shows.

Do you download songs yourself for free? I've downloaded tens of thousands of songs. I'm really into Bob Dylan. The Allman Brothers. Napster was the first thing I used. It expands your musical variety because you get to listen to all this music that's not on the radio. Music has a whole culture of sharing around it, and so this is another way to turn people on to all kinds of music. Maybe if iTunes came along five years ago this whole thing could have been averted.