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Amazon takes on Apple with copy-protection-free music

USA Today:

Amazon's MP3 store — which sells only songs without copy protection — has quietly become No. 2 in digital sales since opening nearly six months ago. That's even though Apple dominates digital music with its iTunes Store (the second-largest music retailer in the world, after Wal-Mart) and its hugely popular iPod.

CEO Steve Jobs predicted his iTunes catalog would be 50% DRM-free by the end of 2007. But that never happened.

Warner, Sony/BMG and Universal all opted to sell their DRM-free music on Amazon instead. "The labels think Apple has too much influence," says Phil Leigh, an analyst at Inside Digital Media.

Apple now has 2 million songs from EMI and independent labels available without DRM, out of its 6 million-song catalog. Amazon offers 4.5 million DRM-free songs.

Pete Baltaxe, Amazon's director of digital music, won't say how many songs Amazon has sold but will say that consumers love the experience.

"What we hear a lot is, 'Thank you.' They appreciate that everything is DRM-free and so comprehensive," he says.

About 239 million digital tracks have been sold this year, according to Nielsen SoundScan. That compares with 189 million at the same time last year, which is not a dramatic jump. (CD sales continue their decline: 74.3 million this year, compared with 89.2 million at the same time in 2007.)

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