After discovering Armin Heinrich's $999.99 do-nothing "I Am Rich" iPhone widget, Apple iTunes App Store reviewer Lee5279xx claims that he "clicked buy, thinking it was a joke, to see what happened. I forgot my wife had 'iclick' activated on my laptop and it really bought this app for $999." Lee5279xx probably meant Apple's 1-Click feature which overrides Apple's standard "Do you really want to buy this?" dialog box. But that was meant for 99-cent songs, not thousand-dollar timewasters.

Vudu, a startup which sells a set-top box for downloading HD movies over the Internet, has finally added adult content to the mix through a partnership with AVN. Neither Netflix nor Apple will let you watch folks bump uglies — in stunning 1080p resolution, no less. Vudu rival FyreTV won't let you download anything but porn, so it's certainly a differentiator. But is it enough to save Vudu's business model? Unlikely. At $299 (marked down from $399), the box is pricey, the selection of videos still limited, and the premise that viewers will spend up to $20 to virtually "own" Ashlynn Goes to College 3 questionable. And of course, the real competition isn't other paid services — it's the millions of hours of free porn available on the Internet.

Eddy Cue, the vice president in charge of Apple's iTunes Store, where outages contributed to the iPhone 3G's messy launch, isn't getting fired. Instead, Apple CEO Steve Jobs is promoting him to head all of Apple's Internet services — iTunes, the App Store, and MobileMe — and will report directly to Steve Jobs. Does this mean that Cue's former boss, Sina Tamaddon, right, is taking the fall for MobileMe's buggy launch? One person definitely getting slapped: Rob Schoeben, the executive responsible for MobileMe during its launch. (Photo of Cue, left, by matteorenzi)

The image you see on top is a standard ad for Mad Men, AMC's series about hard-paryting admen in the good old days that conveniently advertises itself everywhere. The image on the bottom is what you see when you visit iTunes to purchase the full season of Mad Men. The difference? On iTunes, the man has had his cigarette taken away. Steve Jobs does not understand the point of this show at all. Click to enlarge the Apple-approved scrubbing of our culture.

eMusic CEO David Pakman estimates that Amazon.com's MP3 store may have sold 27 million tracks since opening 6 months ago — which sounds good until you consider that Apple's iTunes moves 2 billion songs a year. Pakman also estimates that Amazon's store is adding $7 million, after the labels' take and expenses. At least people are looking forward to a new Kindle, right? [Silicon Alley Insider]

NEW YORK — Apple's iTunes store, required for activating the new iPhone 3G is failing, causing massive chaos from coast to coast. Even Apple employees are — when they don't realize a reporter is in earshot — acknowledging this. "I can't believe there's just so much stuff going wrong," says one employee at the Fifth Avenue Apple Store as he takes his lunch break sitting next to me. "It's not very Apple-like. It's shitty. It just shouldn't happen." His friend agrees: "I called my dad and his phone still doesn't work."

"Putting on a headphone and listening to an MP3 is like hell," 62-year-old rock eccentric Neil Young has said, while praising the sonic qualities of old vinyl records. Now, taking a clue from the fix-it-yourself Web 2.0 kids, Young told the Financial Times that he's working on an alternative digital distribution platform that won't drive his ears nuts:

The celestial jukebox is back, far too late to matter. Napster is now selling a library of 6 million songs, from all four major labels, as MP3 files, a format which lacks copy protection and hence is compatible with any number of devices — most importantly, the iPod. In other words, the state of affairs that existed nine years ago at Napster's original launch, save for the 99-cent fee now charged per download. Egghead Netscape cofounder Marc Andreessen notes the irony without explanation. For the slightly less brilliant among us, here it is: The record labels, having killed Napster once, have now rallied behind it, hoping to weaken Apple, a company whose iTunes store is already the dominant music retailer in the U.S.

The Dexys Midnight Runners as pictured on the saddest iTunes store list. [Your Monkey Called]

Bloggers know that a good Apple story is a sure-fire way to precious pageviews and ultimately, cash. Music groups are figuring out how to capitalize on the cult of Steve Jobs, too. Silicon Alley Insider reports that since appearing in an Apple ad on April 27, "Shut Up and Let Me Go" by The Ting Tings shot up to No. 11 on the iTunes charts and No. 93 on Billboard's top 100. Additionally, Apple fanboys snatched up copies of "Music Is My Hot Hot Sex" after Apple debuted the song in an ad on October 28, and then "New Soul" by Yael Naim took its turn on the charts after Apple featured it in its MacBook Air ad campaign. So the capitalist-friendly among us can't help but cheer music group The Bird & the Bee for their video director Dennis Liu's cynical attempt at an Apple-whoring music video, embedded below.

As a a part of a deal to bring HBO shows to the iTunes store, Apple will allow a content producer to break its $1.99-per-show price structure for the first time, HBO employees involved in the deal told Portfolio. Last summer, Apple CEO Steve Jobs refused to allow NBC to do the same, so NBC boss Jeff Zucker took his shows elsewhere — to Microsoft and the Zune, specifically. Why did HBO get the deal while NBC didn't?

Having dropped Apple's iTunes store in a dispute over pricing, NBC Universal will soon start selling downloads of TV shows like The Office and 30 Rock for its Zune media player. If NBC chief Jeff Zucker manages to scrape some sales out of Microsoft's handheld also-ran, it will be a miracle — and the surest proof yet that content, not hardware, is king. Don't hold your breath. Microsoft's Zune has always seemed like a parody of Apple's iPod. Want to buy songs? Well, first you buy "points" from Microsoft, which you can then exchange for music at some bizarre exchange rate. Nothing about its user interface seems quite right compared to Apple's polish. The system for TV shows is no better. Though Microsoft also makes the Xbox, shows downloaded to a Zune won't play on the videogame console unless you're adept at fiddling with cables. By going with Microsoft, Zucker is betting that technology doesn't matter, design doesn't matter, and market share doesn't matter. He must really believe in his prime-time lineup. (Photo via Fake Steve Ballmer)

The music snobbery is going to get a whole lot thicker on MySpace now that thousands of independent labels have signed on for "virtual major" Merlin.

Steve Jobs has finally wooed all the major studios, including Fox, Warner Bros., Sony, Paramount and Universal, to sell movie downloads on the day DVDs are released. On Friday, you'll be able to wait a while as American Gangster downloads over your crappy American broadband connection for $14.99. And it will be delivered in lower quality than standard DVDs, without any of those annoying extra features. But it will have Apple's DRM installed with every copy! What finally brought Hollywood to the table?

The inevitable grouping of the major studios under the iTunes roof finally occurred today, when Apple officially announced it had reached agreements with Universal, Paramount, Fox, Warner Bros., Sony and Lionsgate (along with previous bedfellow Disney) on day-and-date downloads of their new DVD titles. The studios had made most releases available for rental since earlier this year (with catalog titles for sale before that), but this marks the first time users can buy and download new releases on their DVD street dates.

Everyone's favorite over-allusive Indiewood hit Juno is now available for download at the iTunes Music Store for $14.99. The move marks Fox's first foray into offering new DVD releases as paid downloads through Apple's popular service, with the studio joining Paramount and Disney. Amazon's Unbox already carried the title, where it's also available to rent. Apple TV owners won't be able to rent Juno until May 14.

The twee title belies this podcast's hearty tone (and the twee bits are like John Hodgman, not Dave Eggers). It's a new comedy show, hosted by three terribly clever guys who met on the Internet: "You Look Nice Today," starring Scott Simpson (editor at iTunes), Adam Lisagor (movie editor), and Merlin Mann (productivity expert/comedian). Topics include White Bill Cosby, the queen's royal watchers, and an ad slogan: "Secret: You can put it on your inner thigh." Listen to the mp3 or subscribe on iTunes.

Shawn "Jay Z" Carter signing with LiveNation demonstrates that one of the most entrepreneurial artists of our generation has decided that the business of recording music is advertising. The No. 1 digital music retailer, iTunes, has understood this for some time — Apple sells iPods, and iTunes is a service to make it relatively cheap and easy to fill those iPods. Carter will be happy to make a little chump change from digital sales, but the MC knows the real money is in branded events and merchandise. What the labels call "piracy" is actually free distribution of promotional material, and such a model is not without precedent.

Apple now holds a 19 percent share of the U.S. music market, beating Wal-Mart's 15 percent and taking the No. 1 spot for the first time. Just last month, Apple moved past Best Buy for the No. 2 spot. The data, from an NPD survey, came from a leaked internal email from Apple. Ars Technica suspects the increase in buying is related to Christmas gifts of iPods and iTunes gift cards. Most surprising to me? People still buy music.

Why is Apple suddenly in talks with record labels about bundling an unlimited music plan with new iPods, after resisting such a move for years? Steve Jobs has scoffed at music subscriptions in the past, saying customers want to "own their music." Never take Steve at his word: For years, he shot down the idea of iPods with video or an Apple-branded cell phone — until he made them happen. The same is about to happen for music subscriptions, I suspect — but not because Jobs has suddenly changed his mind about consumers' tastes.