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Taking on iTunes

• Rory Cellan-Jones
• 5 Mar 08, 20:39 GMT

Could a tiny business based in London's Shoreditch take a bite out of Apple’s digital music empire? It seems unlikely and even 7digital will admit that it’s a David facing a Goliath. But this week’s could at least make Apple sit up and take notice.

The seamless integration between the iPod and iTunes – and the manner in which the Apple ecosystem makes rival devices and services less useful to music fans – has made Steve Jobs the most powerful figure in digital music, with Apple commanding around 80% of the market. The big four labels – who saw iTunes as a saviour when it arrived promising users a viable alternative to pirated tracks – are now chafing at the bit.

They don’t like Apple’s insistence on a single price for tracks and albums, and they’re waking up to the fact that they’ve handed the retail end of their digital business to one player.

So Warner is striking a blow for the whole industry by offering its catalogue DRM-free and in MP3 format to 7digital. Until now, it has made perfect sense for iPod users to stick with iTunes - tracks downloaded from other services just wouldn’t play because of their incompatible DRM. Now 7digital’s MP3s will play on an iPod – as well as on other music-players and on mobile phones.

In other words, you are buying a more flexible product – and to make it more attractive 7digital has cut the price of 158 albums to £5, as compared with the £7.99 you will pay on iTunes. I’d be surprised if that is anything but a short-term gimmick – though Ben Drury, the co-founder of 7digital told me it would carry on for some time.

Wandering around the compact offices 7digital occupies in Shoreditch it seems extraordinary that this is the headquarters of what claims to be one of the top three music download services in the UK. But that just goes to show how mighty Apple is compared to the rest, and how slowly the whole digital downloads industry has been growing. The likes of Napster, HMV, and Wippit have all struggled to make any kind of impact.

This little business with 28 staff may not be a major threat to iTunes - Steve Jobs is more likely to be worried about Amazon’s MP3 service, which is currently available only in the United States. But 7digital is part of a movement which is sweeping away DRM from music. Apple itself predicted that trend in Steve Jobs’ open letter to the music industry last year, and will be hoping that it too will benefit as paid-for downloads become as flexible as the pirated kind. But, at long last, competition is arriving in the digital music business bringing users the choice they deserve