Amazon Launches Much Awaited 'Amazon MP3'

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Includes: AAPL, AMZN
by: SA Eli Hoffmann

Amazon said Tuesday is has launched a beta-version of its much-awaited online music store which is seen as a potential rival to Apple's dominant iTunes store (full story). The store, named Amazon MP3, sells its music without any copy protection technology (DRM-free), meaning the songs can be played on numerous devices, including Apple's iPod. Most singles sell for $0.89-0.99; the store's library boasts over 2 million songs from more than 180,000 artists and 20,000 labels, including Vivendi's Universal Music Group and EMI. Apple announced a similar deal with EMI in April; it plans to sell DRM-protected music for $0.99 a tune and DRM-free music for $1.29. Distributors hope DRM-free sales will boost waning revenues due to weak CD sales. They also hope a serious iTunes competitor will give them more leverage in their negotiations with Apple. Before launching the public beta, Amazon said it put the service through an extensive private beta test. Songs will be encoded at 256 kilobits per second. Some analysts say Amazon can compete with Apple's iTunes for a share of the $2 billion/year digital-music market because of its position as the largest and most active internet retailer, and the fact that it's already one of the largest online CD sellers. Others don't think even Amazon can break Apple's dominance.

Sources: Press release, Reuters
Commentary: Amazon , Apple, DRM And Digital Downloads - Seeking AlphaAmazon's Digital Download Challenge to Apple: Brand Doesn't Trump Experience
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