Sony debuted Bitmusic in Japan in 1999, offering mostly singles from Japanese artists (it failed). Cductive was founded in 1996 and sold MP3 downloads for 99 cents (it was acquired by eMusic in 1999). There had been other attempts at creating digital music stores. His pitch worked, and boom - the music industry changed forever. And because the labels had no idea what they were doing - and because Apple was committed to spending millions on marketing (not to mention they had this new gadget called an iPod) - the labels all signed on with the iTunes Music Store. Jobs convinced the labels that allowing him to sell individual songs for 99 cents each was the way to go.

Apple’s iTunes offered a way out of this bind. The labels had all the digital products but no way to distribute and sell them. Third, the labels couldn’t work together on a unified platform because that would have violated all kinds of anti-trust rules, a legal situation that also help scupper the labels’ proposed purchase of Napster. It was much, much easier to just steal music. The terms of use were confusing and digital rights management (DRM) locks on the files made moving them around difficult and frustrating. You needed to know what label a song or artist was on before. For $15 a month, fans could stream 500 songs each month, get 50 song downloads and the ability to burn each of those songs to CD 10 times. Oh, the labels tried to build their own download stores, but Pressplay (originally called Duet and owned by Universal and Sony) and Musicnet (all the other majors) were miserable failures.

They had to get in on the business of selling music digitally, but how?

The new frontier for music was online and the labels were completely ill-equipped to deal with the greatest shift in music distribution in a century. Music piracy, kicked into high gear by the original Napster the previous June, was a threat to the recorded music industry. When Steve Jobs made the rounds of major record labels in 2000, he knew he had them over a barrel.

How to set up stream labels