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Monday, 28 January 2008 04:54

DRM-free Amazon MP3 to take on iTunes globally in 2008

Armed with DRM-free MP3 downloads from all four major music labels, Amazon MP3 the digital music store of has announced that it will take its store international this year. Currently, Amazon MP3, which was launched on in September 2007, is only available to US residents and the announcement to go international puts further pressure on Apple's dominant iTunes store.

To date Apple, which has had at times a rocky relationship with the big four music companies mainly over pricing, has not been able to forge a DRM-free deal with the three biggest labels, Universal, Sony BMG and Warner Bros, after announcing a deal with EMI in April 2007.

The EMI arrangement saw higher quality DRM-free 256Kbps AAC tracks offered for sale on iTunes for US$1.29 compared to the lower quality 128Kbps AAC tracks restricted by Apple's Fairplay DRM for US$0.99. The DRM-free tracks can be copied to and played on any device capable of playing AAC without restriction while the Fairplay tracks can only be played on Apple's iPod, a Macintosh or PC computer, or burned to a CD up to five times.

After Amazon launched Amazon MP3, it became obvious that the major music labels were making a concerted effort to break the dominance of iTunes, which commands an estimated 80% market share of legal music downloads. While Apple's insistence on maintaining the 99c price tag on all its tracks had been reported to be a sticking point with the record companies, Amazon MP3 offers 256Kbps DRM-free MP3 tracks for US$0.89 to US$0.99 from all four labels.

A clear differentiator between the Amazon music store and iTunes is its use of the MP3 format as opposed to Apple's AAC. While AAC is generally considered to produce better sound quality playback than MP3 at the same bit rate, MP3 is widely regarded as a universal standard and, unlike AAC, MP3 tracks are playable on virtually all devices that can play digital recordings, including mobile phones.

Amazon is also going all out to make download purchases more for all-comers by not requiring buyers to install Amazon MP3 Downloader, its equivalent to the iTunes software. To purchase music from iTunes, users must first install iTunes software on a Windows PC, Mac or another Apple device capable of connecting to the Internet. Amazon MP3 only requires that a device can connect to the Internet and accept downloads using Amazon's shopping system, regardless of the operating system.

{loadposition stan}The Amazon MP3 Downloader, which enables users to automatically add MP3 downloads to iTunes or Windows Media Player libraries, is currently only available for Windows and Mac OS but Amazon has said that a Linux version will be available soon. Apple has never expressed plans to make iTunes available for Linux. At present, Linux users in the US can download unrestricted MP3 tracks from the Amazon store and manually load them into their software music library of choice. Buying music from iTunes, however, is problematic.

For Apple the Amazon push also comes at an awkward time for its music player business. Apple's latest earnings report showed that iPod sales growth is flattening as the market for portable music players matures.

Some market watchers believe that the music companies could be in danger of simply replacing Apple's dominance in music downloads with Amazon - in essence swapping one 800 pound gorilla  with another. However, it is more likely that the labels will try to fragment the downloads market using retailers such as Walmart and Best Buy, as well as helping to support the rumoured entry of Yahoo into music downloads.

With Amazon MP3 and Yahoo said to be holding talks with the major labels to launch its own DRM-free music store, the pressure is on Apple to cut a deal with the big three music companies as soon as possible for DRM-free downloads on iTunes. However, that may be problematical given that the big three seem to believe that it is in their interests to try to break Apple's vice like grip on the retail music downloads business.

Meanwhile, consumers around the world are waiting on further announcements to see how quickly Amazon is able to roll out its international music download service.


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Stan Beer


Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.



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