Companies are very quick to diss apple for using its own music formatting. Leaving aside the fact that AAC and Fairplay are open standards, all of these comapanies are missing the point. Granted, their business models depend on the success of their subscription and pay-to-play download schemes, so their business models themselves are missing the point. The point being: Apple makes its money off of iPods. People own iPods to play mp3s they’ve either grabbed off the net or ripped from their collections. The ITunes Music Store is merely the (not-so-sweet) icing on the cake. Should it become profitable, Apple will benefit. Should it not (more likely), they’ll still be making money off of ipods and the fact that they play back non-DRM’d music formats.
Apparently no one realizes this but Apple, who introduced iTunes and iPods under the notion that people should be able to use the music they already own as they please. Companies like Real (245 million dollars of debt in the last 3 years) are trying to jump on what they perceive as a gravy train. In truth, the pay-to-play music market has already reached saturation. I believe that these stores will never replace free downloads nor will they replace brick and mortar retailers. They may get a decent amount of business, but not to the degree that 20 or so online sources will be able to succeed. Walmart may prove an interesting case.