Music Labels Aim Amazon At Apple

    February 16, 2006
    WebProNews Staff

The dominance of the iTunes Music Store could see a challenge from Seattle, if reports of the pending debut of an Amazon digital music presence come true.

With the warm approval of Vivendi Universal, Sony BMG, Warner Music Group, and EMI, Amazon could begin selling branded music players pre-loaded with songs, the Wall Street Journal reported.

We’re going to speculate that any music venture Amazon begins with such unanimous major label approval will utilize a two-tiered pricing system, at minimum.

The labels have been demanding such a concession from Apple, whose CEO Steve Jobs called the labels “greedy” and touched off some very entertaining exchanges in the media between the content owners and the dominant online music distributor.

Amazon’s newest storefront could display the Open sign as soon as the summer of 2006, the report said. Those branded players have been rumored as a possible creation of Samsung Electronics, but there is no official confirmation of that yet.

Amazon could use a subscription model similar to that offered by Napster and Yahoo. The report speculated the players might be free or priced at a low monthly fee to spur adoption by Amazon’s substantial user base.

Engadget indicated whatever emerges from Amazon will carry Microsoft’s DRM scheme, PlaysForSure.

Apple does not license its FairPlay DRM scheme, a business practice that has infuriated the music labels. Doing so could cannibalize Apple’s hardware market, where the numerous generations of the iPod media player have sold millions of units and bolstered Apple’s bottom line.

Amazon sells a number of those iPods, too. Chris Crotty, senior analyst at iSuppli Corp, theorized to the Journal how Apple could end those iPod sales at Amazon.

Considering how Jobs exiled books published by Wiley & Sons from Apple stores due to their publication of an unauthorized biography of him, it’s very possible he would yank iPods from Amazon’s virtual storefront in response.

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David Utter is a staff writer for WebProNews covering technology and business.