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Monday, 14 January 2008 12:47

Amazon MP3 song prices no real threat to iTunes

"Two out of three ain't bad," according to Meat Loaf. Amazon's deals with each of the big four labels to deliver DRM-free tracks give it an advantage over Apple in terms of range, and its choice of the MP3 format gives it access to a larger market. But when it comes to per-song prices, Amazon hasn't done enough to establish itself as the much-vaunted iTunes killer.

Look closely at Amazon's catalogue and you'll see that the headline $US0.89 rate only applies to a subset. Sure, the Top 100 are $US0.89 ("unless marked otherwise") but one of the attractions of online music stores is the huge back catalogue, and you can expect to pay more than $US0.89.

Want Aretha Franklin's Respect? That'll be $US0.99.

Led Zeppelin's Whole Lotta Love? $US0.99.

Madonna's Material Girl? $US0.99.

Chuck Berry's Sweet Little 16? $US0.99.

Desmond Dekker's The Israelites? $US0.99.

OK, you get the idea.

If you like classical music, be prepared to pay as much as $3.87 per track - admittedly you're talking about 20-30 minutes of music, so you can't really complain.

As for albums, Amazon MP3's $US8.99 sounds like a useful saving compared with iTunes' $US9.99, but you'll find plenty that cost more at either store.

You will see some real bargains at Amazon, though. Elton John's Goodbye Yellow Brick Road costs $US16.99 at the iTunes Store, but it's a snip at just $US7.99 at Amazon.

Indeed, for all the albums we checked, Amazon at least matched iTunes' price, and often undercut it by anything from one to several dollars. Among recent releases, Lupe Fiasco's The Cool costs $US10.99 at the iTunes Store and only $US8.99 at Amazon.

Whether this is significant or not depends on where you stand on the 'MP3s killed the album' controversy.

If you think people still buy albums, then consumers benefit from Amazon's lower prices.

But if you're in the camp that says buyers typically cherry-pick their favourite tracks (except for those rare 'all killer, no filler' albums), then lower album prices can be seen as a way of trying to tempt more people to buy the entire work instead.

Buy five songs from The Cool at Amazon, and you're over half-way to the cost of the album. Do the same at iTunes, and you're a little more than a third of the way there, so you're less likely to spring the extra cash even though you didn't really want the whole album.

Call me cynical, but I can't help feeling this is about maximising revenue for Amazon and the record labels rather than helping the customer.

And once people get used to the idea of downloaded songs at variable prices, don't be surprised if new releases start to cost more, not less, than older tracks.

Will Amazon take the trouble to extend its sales footprint outside of the US? If not, all this will remain of academic interest to the bulk of the world's population. At least Apple operates the iTunes Store in Europe and Asia, but with any luck the future success of Amazon MP3 will make it easier for local operators to do deals with record labels on a country-by-country basis.

Surely the gradual switch from physical to online distribution will mean that one day we will see artists selling international rights to their work rather than the messy country-by-country arrangements we have inherited.

But for now, the record companies should be very wary of pushing business towards Amazon as a way of slighting Apple for achieving such a large market share. Where will they go if Amazon reaches Apple's current share of the download market? Wal-Mart?

One last word for those who want to purchase music directly on their mobile phones and music players: backup. Are you in the habit of backing up your phone regularly? At least with Apple's and Amazon's model you automatically end up with at least two copies, one on your computer and another on the phone or player. Too many people are already lax about backing up their computers, and I can't see the situation improving with phones and players. Yet when some commentators are foolish enough to describe software like iTunes as a negative feature of Apple's offerings.

Tell that to someone who loses their phone, complete with a music library that's worth hundreds of dollars more than the phone itself. If the phone or player automatically and easily synced with their computer, at least the music would be safe.

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Stephen Withers

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Stephen Withers is one of Australia¹s most experienced IT journalists, having begun his career in the days of 8-bit 'microcomputers'. He covers the gamut from gadgets to enterprise systems. In previous lives he has been an academic, a systems programmer, an IT support manager, and an online services manager. Stephen holds an honours degree in Management Sciences and a PhD in Industrial and Business Studies.

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