This paper Investigates the market interaction between online and real music stores, together with how this interaction affects the copyright holder's incentives to license and its pricing policy. Selling music through the online stores enables the copyright holder to unbundle the content of a CD and improve profit. However, unlike the traditional real music stores which are more competitive, the copyright holder faces a monopsony in the online market (iTune). It thus chooses the licenses fees and degree of licensing to balance its bargaining power vis-á-vis retail channels and the benefit of unbundling.