Where can you buy an iPod, some accessories for it, plus digital music downloads so you have something to listen to? Oh, and the latest “Harry Potter” book, a Wii game, a new watch and one of those one-cup-at-a-time coffee makers?
For now, the answer to the first question is directly from Apple. As soon as a new service announced Wednesday launches, however, the answer to both questions will be Amazon.com.
After years of speculation, Amazon finally said it’s ready to launch its music download service. And it’s doing so in such a way as to not alienate the millions and millions of iPod owners.
All the music offered will be in DRM-free MP3 format. Unlike eMusic, the only other major service to sell only MP3s, Amazon will sell individual tracks and albums. eMusic has its own version of a subscription service, that gets its users “up to” a certain number of downloads for a monthly fee. The downloads are use it or lose it, though; the closer you get to your allotted number of downloads for the month, the less money each track costs.
There are both plusses and minuses to Amazon’s planned music service. In the “plus” column for consumers is the fact that they have the freedom to play their purchased tracks on PC, Macs, Apple iPods, Microsoft Zunes and any other portable media players of their choice, as well as burn them to CDs. Another plus, although this one may be more for Amazon and its label partners than for consumers, is the site’s built-in audience of millions of shoppers and its ability to deliver recommendations across tens of product categories based on a visitor’s previous shopping excursions.
Topping the “minus” column is the lack of major-label music. Although Amazon said it will offer millions of songs from more than 12,000 record labels, EMI Music is the only one of the “Big Four” willing to take a chance on DRM-free digital tracks.
“Our MP3-only strategy means all the music that customers buy on Amazon is always DRM-free and plays on any device,” Amazon CEO Jeff Bezos said on announcing the service.
But, the MP3-only strategy also means that iPod owners will still have to get their Sony BMG, Warner Music and Universal Music digital downloads from the iTunes store, and folks with a Creative Zen, SanDisk Sansa or other Windows Media-based player will have to visit Napster, Yahoo Music or Rhapsody to get their major label fill.
After seeing their combined revenues decreasing since the original Napster peer-to-peer service turned file-sharing into a popular pastime, the major labels are understandably concerned with putting their music on the Web without a safety net. But, as Apple CEO Steve Job pointed out in his open letter to the music industry earlier this year, there’s no copy-protection on physical CDs, and the labels don’t seem to have a problem selling them anywhere they can.
Similar to iTunes, Amazon’s music download store will bypass the subscription option and stick with permanent downloads of individual tracks and albums. iTunes sells its DRM-free EMI tracks for $1.29 each, a 30-cent premium over its FairPlay-protected AAC tracks. Amazon hasn’t released pricing for its downloads, although its VP of digital media Bill Carr has “hinted” that it might go with variable pricing,” according to the AP. “We have a track record of being very competitive on price and offering very low prices to customers,” Carr told the AP. “We also have a track record of offering a wide range of price points on our product, too. There’s not one or two or three price points on our CD store today – there are many, many different price points.”
Whatever pricing scheme Amazon decides on, chances are it will be different from both iTunes and eMusic, the two biggest digital music stores that don’t offer an all-you-can eat streaming service. iTunes popularized the flat-rate plan with its 99-cent downloads and now its $1.29 higher-quality unprotected AAC tracks.
With its monthly bundle packages, eMusic has pretty much guaranteed that will remain a source of only non-major-label music, because it’s nearly impossible to imagine the labels being willing to accept what eMusic would be able to pay based on its current scheme. Heck, even some of its indie label partners are reportedly planning on ending their relationship over the company’s latest offering. Its basic plan is $9.99 per month for up to 30 song downloads, which drops the per-track price as low as 33 cents and still winds up being the most expensive per track if the full allotment is downloaded. In April, eMusic introduced three “connoisseur” plans, which get the subscriber up to 100, 200 or 300 monthly downloads for as little as 25 cents per track.
These plans may be appealing to indie-loving music fans, but a number of labels are concerned that if eMusic is only taking in a quarter per track, there’s not a lot of room for royalties after all other expenses have been paid. This may be why, despite offering DRM-free tracks, EMI hasn’t made any partnership plans with eMusic. After all, it did manage to convince Steve Jobs to charge more than 99 cents per track, something it was thought would never happen on iTunes.
It will be interesting to see what impact Amazon has on the online music world once the service launches “later this year.” Maybe having Jeff Bezos joining Jobs in the quest for DRM-free downloadable tracks will get WMG, Universal Music and Sony BMG to start offering their tracks with a little more freedom.