Can anyone dethrone iTunes?

The increasingly crowded digital music market grew even more claustrophobic this week with the entrance of Rhapsody America, a joint venture teaming MTV Networks and media services provider RealNetworks with distribution via Verizon. At virtually the same time, retail giant Wal-Mart announced it will add DRM-free songs and album downloads to its online storefront, while digital content solutions provider Navio Systems threw its hat into the ring with a new venture dubbed gBox, which went live Tuesday with DRM-free content from Universal and SonyBMG as well as an advertising pact with Google. Details are still emerging on Rhapsody America, which grabbed most of the headlines, but with its introduction, MTV will fold its URGE music service, launched last year in tandem with Microsoft. Rhapsody America will now serve as the exclusive digital music brand for all MTV Networks and RealNetworks properties in the U.S., although it appears Verizon will continue offering its own V Cast Music service.  

What we do know about Rhapsody America seems promising--it's a platform-agnostic subscription service offering content accessible via PC, portable music player and mobile handset, and it boasts the consumer loyalty and marketing reach long synonymous with the MTV brand. Virtually every mainstream media report was quick to position the service as a legitimate rival to Apple's iTunes digital retail storefront. But let's not get too carried away. Each time a new digital download service rolls out, it looks poised to give iTunes a run for its money … and each time, Apple doesn't bat an eye. iTunes' dominance of the market seems unassailable, which is all the more remarkable given that the platform exists almost solely to promote Apple hardware, a point most clearly underlined by the company's draconian pro-DRM stance. But from what I can tell, most consumers are just fine with someone telling them how they can and cannot play the music they purchase so long as the content is iPod-compatible. 

There's the rub. Rhapsody America, gBox and even Wal-Mart may well end up offering digital music services that are cheaper, more flexible and more sprawling than iTunes, but without a direct lineage to the iPod (and, to a lesser extent, the iPhone), it doesn't matter. It's the product that sells, not the platform. Consider newly-minted AT&T partner eMusic, currently the number two online download site, which sells all its content sans DRM restrictions--iTunes still outsells eMusic roughly 10 to one. Apple controls approximately 80 percent of the device market and 70 percent of the download market. All of the new digital services sprouting like weeds are just scrapping for the remaining 30 percent. It's not even a fair fight. The only real rivalry in music right now pits Kanye against Fitty--nobody knows which rapper will sell more new records next month, but everyone knows where the overwhelming majority of their digital revenues will originate. - Jason