I imagine that everyone who cares has seen this Apple press release, but in case not: the iTunes Music Store sold over a million songs in its first week of operation. Half of those songs were sold in the form of albums, so this approach to music sales appears not to have an adverse effect on album sales. (500,000 songs, call it ten songs per album, that's 50,000 albums in a week.) And they sold at least one copy apiece of half the songs in their catalog—100,000 different songs, so an average of ten copies of each song.
Some tidbits from the Fortune article on the iTunes Music Store:
The iTunes Music Store will [pay] the record companies an average of 65 cents for each track it sells. Ultimately Jobs hopes to offer millions of songs, including older music that hasn't yet made it to CD.
For some artists, the idea of a singles-driven business is anathema. "There's a flow to a good album," says Nine Inch Nails' Reznor. "The songs support each other. That's the way I like to make music." But Crow says it would be a relief to put out singles instead of producing an entire album every time she wants to reach fans. "It would be nice to have a mechanism to release a song or two or three or four on their own," she says.
(So Apple's bringing in about 34 cents of revenue per track—presumably the operating costs have to come out of that, so it's not profit, but still, $340,000 of revenue in the first week of sales ain't bad. If it kept up, that would be like $17M a year. Of course, there's no indication how much of the 65 cents that goes to the record companies is then distributed to the artist.)
In the two weeks since the iMS opened, I've bought about 50 songs, 30 of which were on two albums. So that's about $40—but it's a much higher fraction of stuff I like than I would've gotten from spending $40 on CDs. (And counting sales tax or shipping costs, $40 worth of CDs would probably have been more like 30 songs.) On the other hand, if I'd spent that $40 on a one-month subscription to EMusic, I'd still have two weeks in which to download as many songs as I wanted, and they would be unencumbered MP3s instead of partly copy-protected AACs. (Though I gotta say, I think the minimal Digital Rights Management attached to these songs is quite reasonable, and the music companies deserve some credit for being flexible enough to support something they must've found awfully scary. I suppose this means I've become a compromiser or a pragmatist or something in my old age; just as I see hybrid cars as a good (and much more practical than most) step on the road to electric, I see this minimal DRM as a good step toward a more sensible balance between artists' rights and consumers' rights, and a much more practical step than the "make everything free right now!" approach advocated by the übergeeks.) I suspect that the selection is different enough, though, that I wouldn't have found several of these on EMusic. But I'll have to try it to find out.
I should also note that many CDs cost a lot less than I expected; there are a fair number of $10-$12 CDs at Amazon. I'm used to buying independently produced folk CDs for $15-$18, rather than mass-produced pop/rock CDs that've been around for 10 or 20 years and can be sold a little more cheaply. And Amazon gives free shipping under various circumstances. So the cost via iMS may not be significantly lower—but the elapsed time between deciding to purchase and being able to listen to the music is lower. (I should also note that Amazon very nicely gives a lot of free sample tracks away.)
I did tentatively decide the other day to buy one CD instead of downloading its songs: Will the Circle Be Unbroken, vol. 2 has a bunch of stuff I like, but without the liner notes I won't know who's performing on each track. It sounds so far like there isn't as much stuff I like on vol. 2 as on vol. 1 (thanks again, Aaron, for recommending that!), but still good stuff.
I admit to being somewhat tempted to buy a box set from Amazon of Like, Omigod! The '80s Pop Culture Box (Totally), which appears to contain almost all of the songs I like from the '80s. And a whole lot of others. I ended up just buying a dozen of these songs from the iMS, but I still think that box set looks cool.
I'd been wondering how the iMS would handle doing a whole bunch of tiny little credit-card charges. (As far as I can tell, 99-cent credit-card charges aren't cost-effective for the seller; some restaurants, for example, won't take credit cards for amounts under $5. My understanding is that the amount the credit-card companies charge per transaction is heavily dependent on the volume of transactions a given business handles.) Seems they're doing some aggregation: looks like they lump all of your songs purchased in one day (or other period? not sure) into one charge. I guess they're assuming that most people will usually buy more than 4 or 5 songs in a given day when they buy any songs at all. Interesting approach—and remarkable simple, especially compared to other micropayment schemes I've seen floated. Probably doesn't work nearly as well with things other than music, though; I'm guessing people would be less likely to buy a passel of individual short stories at once, frex.