Earlier this year iTunes became the number two music retailer in the US, just behind super retailer Wal-Mart. Industry analysts and experts were amazed that Apple’s fledgling online music store had become so big in so little time. But now Apple is claiming that iTunes has reached the number one position in the U. S. market, outselling even Wal-Mart.
This claim is reinforced by a study released this week by NPD, a consumer media analyst group. NPD’s study found that iTunes sold more music during January and February of this year than any other national retailer, and is now the largest seller of music in the U. S., both online and off.
Since its inception in 2003, Apple’s iTunes store has sold over 4 billion music tracks. A great deal of the credit for this extraordinary feat goes to the success of the Apple iPod, which has become a cultural phenomenon not only in the US, but around the world.
Still, Apple’s victory celebration could be short-lived, as there is increasing competition among online music retailers, and MySpace (now owned by NewsCorp) has just announced that it will debut its own online music store, selling downloadable digital music tracks, and also music merchandise and concert tickets.
As the number one social networking web site in the country, Myspace has a huge infrastructure already in place to sell digital music, and industry watchers are taking their new digital music service very seriously.
Amazon.com’s MP3 store also continues to gain ground against the competition online. Launched just a year ago, the Amazon store offers music tracks and a slightly lower price than iTunes, and uses no digital right management technology, so that music downloaded from the side can be copied onto CD, or used in any type of MP3 player.
To keep up with all the competition, iTunes is rumored to be discussing a new plan to offer unlimited music downloads in return for an annual premium fee. Allegedly, Apple is also considering a plan to offer free music downloads in exchange for customer loyalty in buying several Apple products, such as the new iPod and iPhone devices.
For now, Apple is refusing to comment on their future plans, but it is clear that the company will need to expand and grow in order to retain their number one position. With so many different competing music portals online, many analysts believe the future may bring a plethora of smaller niche music sites, dedicated to a particular style of music, or type of media — such as vinyl records.
The newly established Amazon MP3 Store is changing the way many people browse and purchase music online. Unlike their biggest rival, iTunes, Amazon distributes music in higher quality 300 KBS MP3 format, which includes NO Digital Rights Management protocols. This allows the end-user to transfer music files from one computer to another, to an iPod or other MP3 player, or even burn tracks to an audio CD or CD ROM as often as they like.
Amazon’s open MP3 policy has already been attracting a substantial number of online music consumers, and Thursday’s announcement that Sony BMG would partner with the Amazon MP3 store to offer unprotected music files creates even more momentum for the new Amazon store. It also is a serious blow to Apple’s iTunes, which continues to use “protected” MP3s, limiting the user’s ability to copy and transfer music.
The Sony BMG music catalog is vast, and includes artists such as Foo Fighters, Justin Timberlake, and Bruce Springsteen. The inclusion of Sony BMG music on the Amazon MP3 store pretty much seals the deal, so to speak. Amazon.com will now be the only major player online to sell music and media from every major company in an unprotected high-quality MP3 format.
Additionally, every track listed on the Amazon MP3 store site can be previewed before purchasing, and just as with iTunes, single tracks may also be purchased from any album. The 300 KBS MP3 format is also a big advantage for Amazon, as it provides a significant quality improvement over standard 128 KBS MP3’s.
The higher-quality format, and the absence of any so-called digital rights management encoding has already made the new Amazon store a popular destination online. The addition of the Sony BMG music catalog should only solidify their position as a real contender in the online music distribution industry, and the only serious threat to iTunes continued domination.
Although Apple’s iTunes has sold a reported 3 billion plus songs to date, most of the music purchased on iTunes can only be played on Apple devices, such as the iPod. iTunes also sells single tracks for $.99, compared to Amazon which offers a variable pricing structure which includes many tracks for $.89.
The Sony BMG/Amazon partnership represents a breakthrough of sorts in online digital media sales. This is the first time one distributor — Amazon.com — has offered a complete media library, including all the major music labels, that is unencumbered by Digital rights Management protection. Finally — someone is doing online music distribution right.
Related Business Directory Categories:
There’s no denying that Apple’s iTunes has been a huge success online. By offering seamless integration with the Apple iPod and iPhone, the downloadable iTunes software is easy to use and allows music lovers to download single songs or complete albums with just a few clicks.
But one big complaint that many iTunes’ users have is that Apple does not use standard MP3’s, opting instead to present songs in their own proprietary format that is incompatible with Windows Media Player, Winamp, and other popular media software.
Additionally, iTunes uses DRM, or
digital rights management, to protect songs and albums from being burned to a CD, or used in non-Apple devices. These limitations have been the Achilles’ heel of iTunes for some time, and now Amazon.com is preparing to exploit this weakness with the introduction of
Amazon’s MP3 music download service, available on the Amazon.com web site.
Like iTunes, the Amazon MP3 download service allows users to purchase either single songs in a mix-and-match format, or complete albums at one go. But the similarities between the two end there.
Unlike iTunes, the Amazon music downloads do not use digital rights management of any kind, and the song files are presented in standard MP3 format, which can be easily burned to CD or played with any popular media software or hardware MP3 players. Amazon MP3’s are also formatted as 256 kbps MP3 files, providing a higher-quality listening experience for the consumer.
The removal of the digital rights management code offers Amazon.com a huge advantage over iTunes, and fulfills a need that online music consumers have been demanding for many years now; namely, the ability to use their downloaded music files in any way they see fit, and play them on any number of different devices, computers or burned to a CD.
Critics are already hailing the new Amazon MP3 downloads service as a giant leap forward in the digital music industry. To make matters even worse for iTunes, Amazon.com also offers a familiar elegant layout, with a short streaming MP3 preview available of every single song in their inventory. This feature, combined with Amazon’s elegant one-click purchase button, could allow Amazon.com to dominate the online digital music industry the same way it has with books and other media.
A quick perusal of the Amazon MP3 downloads section also reveals a significant price difference. At the moment, most single songs are only $.89 on Amazon.com, with full albums priced between $8.99 and $9.99. This is significantly cheaper than the average purchase price on iTunes, and demonstrates Amazon.com’s skill at dominating online markets.
With more flexibility, streaming previews of every song, no digital rights management, higher quality standard MP3 files, and an elegant one-click purchase interface, Amazon.com could turn out to be the iTunes killer consumers have been waiting for.
Related Web Directory Categories:
Comments