(Agencies)
Updated: 2008-03-20 10:24

The success of iTunes has helped Apple become one of the world's biggest music retailers -- it's currently the No. 2 music retailer in the US behind Wal-Mart Stores Inc.

But it's also exposed Apple to criticism over how the company protects its content and prompted Apple to campaign for new ways to distribute music legally online.

The criticisms center on the inability to play songs bought on iTunes on rival products to the iPod, such as Microsoft Corp.'s Zune player.

To free up online music, Apple CEO Steve Jobs says the major record labels should strip protections known as Digital Rights Management, or DRM, technology, which prevents unauthorized copying, from their songs sold online. Apple, meanwhile, has refused to abandon its own copying protections.

Some of Apple's rivals are already trying out new approaches.

Nokia Corp., the world's largest mobile phone maker, announced a deal with Universal Music Group in December that gives buyers of certain Nokia phones unlimited free downloads of songs from the Universal catalog.

Seattle-based RealNetworks Inc. and Redmond, Wash.-based Microsoft both offer music subscriptions that cost $14.99 per month that the companies believe will appeal to customers who are more interested in discovering new music than owning old favorites.

Neil Smith, a vice president of marketing for Rhapsody, said its subscribers delve deeper into back catalogs and check out more independent artists than typical in-person music store shoppers. Subscribers also buy more MP3s than non-subscribers.

"We believe that this kind of approach, where unlimited content can flow seamlessly across different devices and media, is the best thing for the consumer and the industry," said Microsoft spokesman Jason Reindorp. "It brings the focus back to where it should be -- the music."

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