The new service, called iTunes, allows users to legally download songs at 99 cents each or albums for $9.99. The songs can be burned onto CDs, transferred to iPod digital music players and saved on up to three computers.

Unlike other services, where users can lose the rights to their downloaded songs once their subscription runs out, iTunes music is permanent property.

Major record labels like EMI, Sony and Warner Music have signed on with Apple, supplying their artists' songs and glad for the chance to sell music rather than have it stolen.

The industry fights back

In recent weeks the entertainment industry, led by the Recording Industry Association of America (RIAA), has stepped up the fight against Internet file sharing and downloading. The association has taken legal action against suspected Internet pirates, citing the rules set by the Digital Millennium Copyright Act of 1998, a law that sets the boundaries for digital copyright theft.

In one case, RIAA sued four college students from Princeton University, Rensselaer Polytechnic Institute and Michigan Technological University. The students were charged with sharing some 1 million songs on the Internet and faced a fine of $150,000 per song. The students settled for between $12,000 and $17,500 each.

On April 28, RIAA began an e-mail drive, sending instant messages to users of file sharing services like Grokster and Kazaa. The messages warn users that downloading copyrighted material is illegal and that they can be prosecuted.

Because the industry can't touch the services themselves -- a judge ruled recently that Grokster could not be shut down because it has no control over the actions of its users -- the music industry has targeted individuals and the communications companies that provide them with Internet access.

Last week, a U.S. District Court ordered Verizon Communications to release the names of Internet customers suspected of offering music for illegal downloading. The move allows RIAA to contact those users individually and to take legal action against them if necessary.

A question of freedom

Internet advocates argue that allowing the entertainment industry to use communications companies and other technology to identify users is an invasion of privacy.

"In combating Internet piracy, we are destroying the opportunity of the Internet to serve as a tool for extraordinary creativity and innovation," Lawrence Lessig, a professor at Stanford University and an expert on Internet law, said.

But the entertainment industry, which includes movie, music and television companies, says illegal downloading means millions of dollars in lost revenues.

Peter Chernin, chief operating officer of the media giant News Corporation, which includes Twentieth Century Fox Studios and Fox Television, says fifty percent of the motion picture industry's revenue comes from DVD and video sales.

"If all these products are pirated and stolen on the Internet … if fifty percent of the income for this business goes away, the business is over as we know it," he said.

What the artists have to say

For music artists, many of whom have been starring in television ad campaigns condemning illegal file sharing, the Internet can serve as friend and foe.

Although they lose money when users download music for free, some artists, like rap star Chuck D, see the future of music as an online venture.

On his new Web-based label, Slam Jamz, the rapper encourages artists to sell their music online rather than signing contracts with major labels.

Slam Jamz mantra, as it appears on their Web site, says that the Internet "will change the record industry as it is today. The record industry is a dinosaur that is facing the threat of the digital age…"

While admitting that the Web may be the music store of the future, at least 90 recording stars, including Eminem, B.B. King, Sting, Madonna, Eve and Missy Elliott, participated in a campaign to shame people out of file swapping. The artists say the money lost through illegal downloading of copyrighted material comes out of their retirement funds.

The ads were paid for by Music United for Strong Internet Copyright Coalition (MUSIC) and RIAA.

-- By Kristina Nwazota, Online NewsHour