Usa Forum - Amazon to start selling digital music

Jim Higgins

5/17/2007 12:09:00 PM

Amazon to start selling digital music
http://www.ft.com/cms/s/bbe3caec-03bd-11dc-a931-000b5df...

Amazon moved to shake up the online music business on Wednesday by
setting up a direct rival to Apple?s iTunes that will sell tracks
without copyright protection.

Amazon said its decision to abandon so-called digital rights management
software and instead sell tracks in the MP3 format would allow consumers
easily to transfer music among a variety of devices ? from iPods to
personal computers and compact discs. The pioneering online retailer
believes that will help to spur the next growth phase of the burgeoning
digital music market.

?Our MP3-only strategy means all the music that customers buy on Amazon
is always DRM-free and plays on any device,? said Jeff Bezos, chief
executive of Amazon.

The Amazon service will launch later this year with support from EMI,
the third-largest record company, and more than 1,000 smaller labels.
Six weeks ago, EMI became the first major label to abandon copyright
protection when it announced an agreement with Apple to sell its
catalogue through iTunes without DRM. The decision was hailed by Steve
Jobs, Apple?s chief executive.

David Card, an analyst at Jupiter Research, said Amazon?s clout would
increase the pressure on EMI?s competitors to follow suit. ?Getting
another big, big player to endorse DRM-free is a big deal.?

The other major record companies ? Universal Music, Sony-BMG and Warner
Music ? are testing the MP3 format. Yet they are still concerned that
dropping copyright protection could increase piracy or cut into their
growing sales of music to users of mobile phones. Some indicated on
Wednesday that they had no immediate plans to join Amazon.

The web-based retailer?s decision to enter the digital music market
comes at a time when the record companies are desperate for a rival to
iTunes. In spite of challenges from Microsoft, Yahoo and others, the
Apple service still commands roughly 80 per cent of the online music
market, which has allowed it to dictate terms to the music companies on
pricing and other issues.

Bill Carr, vice-president of digital media at Amazon, would not disclose
pricing information for the new music service but did say it would be
?competitive?.

Barney Wragg, EMI?s top digital executive, predicted Amazon?s
participation would ?take the whole digital music business on to the
next level?.

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Amazon to start selling digital music

Jim Higgins

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