Apple's iTunes Store sells singles for 99¢ — 1M songs sold in week one

By 2003 file-sharing networks had gutted music sales, while legal online stores charged subscription fees and labels refused to unbundle albums. Apple had the iPod but no legal way to fill it.

Unbundle the album: sell every song a la carte at a flat 99¢ with no subscription, and trust buyers with unlimited CD burning and iPod use.

Apple licensed 200,000 songs from all five major labels, launched the store inside a free iTunes 4 update on April 28, 2003, priced every track at 99¢, and allowed unlimited personal CD burning and iPod transfers — rights no rival offered.

Over 1 million songs sold in the first week, more than half as albums; 1 million iTunes 4 downloads and 110,000 third-generation iPod orders. Jobs declared Apple 'the largest online music company in the world' within a week.

In April 2003 Apple opened the iTunes Music Store: over 200,000 songs from all five major labels, priced at 99 cents per track with no subscription. Buyers got rights no other service offered — burning songs to unlimited CDs, transferring them to unlimited iPods, and playing them on up to three Macs.

The move was a deliberate rebuke of the status quo. File-sharing networks had gutted the music business, and the legal alternatives — subscription services like Pressplay — treated customers like criminals while charging monthly fees. Steve Jobs argued subscriptions were the wrong path and that a cheap, convenient, trustworthy store could beat piracy.

The bet paid off immediately: Apple sold over one million songs in the first week, with more than half purchased as complete albums, and took orders for over 110,000 new iPods. Jobs called the store 'the largest online music company in the world' after seven days.

It changed the unit of payment from the album to the song, turning music into an impulse purchase.

A flat 99¢ price undercut piracy's convenience, giving labels a legal channel that actually competed.

Trust-based usage rights — unlimited burning and iPod transfers — became the point of difference against rival stores.

Change the unit of sale, not just the price: selling a single track at a flat 99¢ made legal downloads a cheaper, easier impulse than piracy — and set the industry's price point for a decade.

The store came to Windows that December and kept expanding, adding music videos and later movies and TV shows; the 99¢ single became digital music's reference price for years. By February 2006 Apple had legally sold one billion songs across 21 countries, less than three years after launch, with the buyer of the billionth track getting an iMac, ten iPods and a $10,000 iTunes card. The majors' fear that unbundling would destroy album sales never materialized — in week one, over half of purchases were albums.