Amazon Opens Doors on Digital Music Store

Joining the ranks of Wal-Mart and other retailers who are seeking to break Apple's dominance of the digital music business, Amazon this week opened the virtual doors of its music download service. The service, called Amazon MP3 Store, offers songs in a highly compatible and unprotected MP3 format that works with virtually all music software and, most important perhaps, Apple's hugely popular iPod. The service also undercuts the pricing of songs at Apple's iTunes service.

According to Amazon, individual songs are 89 cents, 10 to 39 cents less than the AAC songs Apple offers through iTunes. Albums typically range from $4.99 to $8.99, with the top 100 selling albums adopting the $8.99 price point; Apple's albums sell for $9.99 to $11.99 typically.

Though Amazon's service is compelling, it does have a few disadvantages compared to iTunes. Amazon offers only two million songs in its catalog, from EMI and Universal, compared to over 6 million at iTunes (which includes music from all the major studios). And Amazon's Web-based interface, though decent, doesn't yet rival the elegance and fit and finish of iTunes. Amazon does, however, offer a music download utility that automatically ports songs into the PC-based iTunes software so that iPod users can automatically sync with music purchased from the service.

With over 90 percent of the market for digital music downloads on some weeks, and over 70 percent of the market for portable audio players overall, Apple is obviously a force to be reckoned with. However, there are signs that the company's dominance is starting to wear thin with content providers and consumers alike. Recently, NBC jumped ship from iTunes after a pricing spat with Apple, and the company is now offering its TV shows via its own Web site and through Amazon instead. And Apple's recent $200 pricing snafu on its iPod-like iPhone has angered some of the company's most ardent fans.

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