Real iTunes Competition, But Why Are The Labels Being So Nice?

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Amazon opened their MP3 store today, and it’s clear iTunes has legitimate competition since Amazon avoids the pitfalls that made other music sites a joke. However, through it all some curious questions arise, which I’ll get to below. Meanwhile, here’s why this new site is a valid alternative to iTunes:

Type:
This is a buy-to-own store, not a music-rental store. And there is no DRM. Enough said.

Brand:
This is not some entity you’ve never heard of. This is Amazon. Even though the system is beta, I tend to trust it more than a new company formed by groups looking to make a quick buck or fit a marketing plan. Further, even as beta I expect Amazon to have fewer glitches than a new company. After all, they’ve been doing this online sale thing for a long time (it remains to be seen how well they are at the download process, however).

Interface:
Works fine on PCs and Macs. While not as slick as iTunes’, the interface is pretty easy to navigate and will be familiar to anyone who’s used Amazon. I bookmarked the site, and occasionally used that to get “home” because an obvious way back was not available. Also, on a couple of occasions I found myself in the CD section of Amazon when that’s not what I wanted. Overall, though, it’s a pretty good interface for a beta.

Compatibility:
Since there’s no DRM, all files are playable on any MP3 device (your computer, iPod, CD, iPod, car player, iPod, Sansa, iPod, Zune, iPod, etc.).

Price:
Price is quite good. Lots of popular albums for $8.99, a dollar less than iTunes. They advertise albums for under $4.99, $5.99, etc., but that’s misleading since they’re EPs. You’re still paying ~90 cents a song. The iTunes store has lower prices on such “albums” as well. Amazon singles are 99 cents, better than iTunes because their DRM-free tracks are $1.29.

Quality:
All tracks are 256K MP3. The free track I got was 256K VBR LAME encoded, which is about as good as MP3 gets. However, the album I bought was 256K CBR with no information about the encoder. Clearly there’s some variance, but at 256K they should all be very good quality.

Selection:
Since this is DRM-free music, an initial offering of two million tracks is actually pretty good. It pales next to iTunes’ six million, but that’s not all DRM-free. Amazon’s site really shines a light on what is not DRM-free. For example, where’s Sony? And where is most of Universal’s catalog?

Clearly, this is not yet another “me too” site that will close with a whimper in 18 months. For now, it’s a legitimate place for me to browse when I want to buy an album, though by no means a slam dunk.
But something doesn’t smell right…

Amazon’s DRM-free prices are in line or even less than iTunes’ DRM prices. Think about that for a minute. The labels hate iTunes pricing — it’s what they constantly bitch about — yet here is Amazon with those same iTunes prices (or less!) for tracks having a distinct advantage.

EMI wanted more money from Apple for singles with no DRM, but seem perfectly satisfied with Amazon’s 99 cent price for the same thing. Why? Further, Universal has repeatedly said they’d never remove DRM, yet they tossed a few hundred thousand DRM-less tracks to Amazon at only 99 cents. What gives? Why the special treatment?

In my opinion this is just a push for Amazon to get customers while the labels hope to break iTunes’ grip on the digital music world. If the store gets popular, expect the labels to raise prices and, unlike Apple, expect Amazon to have little issue with this. The labels might also rollout more tracks, but with DRM. We know Amazon’s video site is in bed with content providers (most recently NBC); they clearly have no issue with DRM. I think if Amazon were seen as a threat to balk at any of this they wouldn’t be getting this preferential treatment to begin with.

So what’s going on, is this all just to spite Apple? That makes no sense because the labels gain nothing from it; all they‘d have done is create another iTunes store, or worse. Have they changed their mind on DRM? Then offer all of Universal’s tracks and, for that matter, the other labels’ as well. Have they decided iTunes pricing isn’t so bad after all? Then offer Apple the same terms. Do they just want to build a popular store with a partner who won’t argue over pricing and DRM restrictions? DING DING DING DING DING!! We have a winner!

Of course, I could be wrong, but something doesn’t smell right.

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