Will Apple for pay keep doldrums away?

Exex react to iTunes bow, 1 million downloads

NEW YORK — Two former music industry execs were stunned while shopping in a Los Angeles mall the weekend of May 3.

It was no surprise that the combo CD and bookstore had no music playing, but the neighboring Apple computer outlet was actually blasting tunes.

“Figures,” the ex-label president said. “It takes a nonmusic company to actually market music.”

Apple rolled out its iTunes Music Store on April 28, and in less than one week more than 1 million tunes had been downloaded.

Apple and record label execs were ecstatic. And the computer maker extended the momentum May 6 by adding more than 3,200 new tracks to its catalog of 200,000 digitized songs.

“I got a first look at the store several months before it came out, and my reaction the first time I saw it was, ‘This is it,’ ” says Warner Bros. Records topper Tom Whalley, whose parent group Warner Music was the first of the big five to sign up for the service. “This is what the people who are willing to pay for music have been looking for all along.”

The service does raise questions about the future of brick-and-mortar music retailers, but even some of them are seeing positives.

“The more channels of distribution you have, the more music will sell overall,” says Trans World Entertainment exec VP and chief financial officer John Sullivan. “It’s nice to see a real breakthrough in the digital space.”

Trans World itself is part of a consortium of retailers that joined recently to form Echo, an online music outlet of their own.

“Music sales over the Internet primarily impact specialty stores where heavy music users tend to shop,” says Target VP Greg Mize. “Consumers who buy music in a mass-market store do so primarily for convenience.”

Whalley isn’t worried that iTunes Music Store customers might only cherry-pick songs for downloading: Full-album purchases accounted for half of the 1 million tracks Apple sold in its first week, he notes.

“We don’t know for sure what impact this will have yet in terms of the song-by-song approach,” Whalley says. “But if you look at people’s habits so far, they’re buying albums.”

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