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Amazon Gaining On iTunes' Lead In Online Music Sales

by Thomas Houston on March 27, 2008 at 10:02 AM



Amazon recently moved into the number two online music retailer spot without much fanfare. Amazon's online MP3 store opened merely six months ago, and it appears to be gaining on the number one retailer -- Apple's iTunes Store, which commands 80% of online digital music sales.

The trends towards moving away from music burdened with digital rights management (DRM) software created new opportunities for Amazon. Why has DRM-free music -- which lets people play purchased tunes on any digital player or computer -- become such an important area of growth in the online music business? As Amazon's director of digital music, Pete Baltaxe, explained to USA Today: "Songs sold without DRM, at high quality, with album art, that's the best way to get people to buy music instead of stealing it," whereas DRM is a way to punish people who are buying...."

While Apple worked with record label EMI to sell DRM-free music in early 2007, the iTunes giant didn't have much luck getting other major labels immediately signed on. Instead of working with Apple -- currently offering 2 million DRM-free songs -- Warner, Sony/BMG and Universal decided to offer parts of their catalogs DRM-free on Amazon. Amazon's DRM-free library totals around 4.5 million, and is well-positioned to compete with iTunes.

Hopefully, the competition between the two retailers will result in better pricing and accessibility to music for consumers.

From USA Today

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Tags: amazon, apple, drm, drm-free, itunes, music, sony, universal, warner

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