2. The Digital Music Service Landscape

Because the digital music industry is still very new, there are a variety of options offering different types of value and experience to the music fan. These services give listeners a unique, convenient, high-quality and reliable means of discovering and interacting with their music. They provide users with access to huge catalogs on demand (most services boast upwards of 600,000 tracks), dependable high-quality audio files (no decoys or bad files), clean organization of catalogs, and easy, reliable access. Additionally, many of these services provide specialized radio programming and customizable radio. Catalog information, editorial notes, and suggestions from editors or other community members encourage discovery of new music. The downside is that much of the hard-to-find music that's usually available on peer-to-peer networks (from unlicensed artists or out-of-print releases) is under-represented in most services, and typically there are limitations to how, when, and where the music can be accessed. And, of course, users have to pay. Here's an overview of what's out there:

On-Demand and Downloadable Music Services — By our count there are close to 150 music subscription and download services offering a wide range of digital delivery methods including on-demand streaming, CD burning, time and/or location limited (tethered) downloads, unrestricted downloads, and a variety of interactive radio options.

Apple's iTunes Store

Tied to their popular iPod player, the leading provider of downloads

Napster

Portable streaming/downloading service with over 600,000 subscribers.

Real Networks RHAPSODY

- Currently the leading subscription streaming service, with nearly 800,000 members.

Yahoo! MusicMatch

- Poised to make a play through tie-ins with Yahoo's Launch Radio and Yahoo! site visitors.

Liquid Audio

- Runs the back end for Wal-Mart, Tower, Music Rebellion, and more.

Sony Connect

- Download service from the music industry giant, in connection with their portable music players.

Microsoft MSN Music Store

- Web-based download service from Microsoft attempting to go head-to-head with iTunes.

On Demand Distribution (OD2)

- Europe's leading provider of digital music, started by Peter Gabriel, now owned by Loudeye.

MusicNet

- Powers AOL Music, Virgin Online, Cdigix, and other subscription services.

Emusic

- The first in the industry, currently selling 1.5M tracks monthly from independent labels.

Internet Radio — Internet radio has been popular for a long time on the web, and typically comes in two flavors.

Interactive radio is generally a premium service that allows the listener to skip songs, rate songs to affect your playlist, build custom stations based on your artist preferences and otherwise influence the listening experience. MusicMatch, Yahoo! Launch, Rhapsody, and Napster all offer such services.

Non-interactive radio is most like the normal radio experience, just a constant stream of music that the user cannot influence, usually programmed to a specific style of your choosing. It may come with or without commercial advertising, often depending on a subscription. Most of the services mentioned above offer a non-interactive radio option, often for free, as do products such as Realplayer, Windows Media Player, Live365, and countless other independent and small webcasters. And, of course, many traditional radio stations broadcast across the Internet.

Continue: Getting Paid For Your Music Online – Digital Music Rights