Have your child enjoy the story and connect with it. The narration and music will enhance the experience.
In this step the story is slower--one word at a time. This is important--the child begins to see the correlation between the word they hear and the one they see. The music that brought the story to life in the first step will help them memorize it now.
The story remains slow in this step, and the narration is gone. The music remains, reminding the child of the words that they are now reading on their own.
In this step the story returns to its original speed. The narration is gone, but your child does not need it. They are now the narrator.