WSJ.com – Amazon Plans Music Service To Rival iTunes

WSJ.com – Amazon Plans Music Service To Rival iTunes

Now Amazon, the world’s No. 1 online retailer, is in advanced talks with the four global music companies about a digital-music service with a range of features designed to set it apart. Among them: Amazon-branded portable music players, designed and built for the retailer, and a subscription service that would deeply discount and preload those devices with songs, not unlike mobile phones that are included with subscription plans as part of the deal.

I don’t see how Amazon branded players or a subscription service would set them apart. There are already players and subscription services in the market. To me, this looks like another attempt to tie content to hardware, and I am convinced that is the wrong way to go, despite the one instance where it has been successful (the iPod/iTunes scene).

The article makes no mention of a DRM scheme, excpet in this reference:

Amazon would face the same challenges as other music-player makers: buying enough flash memory to store content on small music-player devices and securing music content

“Securing music content”? Is that a euphemism for “coming up with some way to pacify the majors, eventhough we all know that if you can make it come out of speakers, you can copy it”?

Someday, someone will realize that strong content and ease of consumer use are what is going to drive this market, not attempts to control consumer behavior. Who ever sorts that out, will rule the world.

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4 thoughts on “WSJ.com – Amazon Plans Music Service To Rival iTunes

  1. Jeff writes:

    > I don’t see how Amazon branded players or a
    > subscription service would set them apart.

    They won’t, but Amazon has sufficient market clout to compete seriously with ITMS. And an Amazon service would give the content cartel, which wants a bigger slice of the ITMS pie, a really big club with which to beat Apple over the head as they renegotiate their soon-to-expire ITMS contracts.

    > this looks like another attempt to tie content
    > to hardware

    In the immortal words of that illustrious philosopher Gomer Pyle, “Surprise, surprise, surprise!”

    > Someday, someone will realize that strong
    > content and ease of consumer use are what is
    > going to drive this market

    For a thought provoking and highly creative proposal that addresses this issue, see:

    http://arstechnica.com/news.ars/post/20060220-6218.html

    Nutshell: the entire entertainment industry is a $10B business; compare this to the $5B cost of a new silicon fab plant and ask yourself why some big Silicon Valley company doesn’t just buy a record label and give content away for free as a means of selling the hardware to which it’s tethered. Whether or not this would be a Good Thing for artists is another matter entirely….

  2. Hey Todd, good to “see” you here.

    I haven’t read the linked article yet, “give content away for free as a means of selling the hardware to which it’s tethered” is pretty much what ITMS is doing.

    If you buy one of my tunes on iTunes, you pay $.99. Apple only keeps $.29 of that. CDBaby (my digital distributor) gets $.70 from Apple, and they keep 9% of that and send the rest to me. I would have to think that the majors have a better deal than I do. Does that $.29 leave them any room to really make money?

    I don’t know, but that $400 iPod video sure leaves them some room to make money.

  3. I just read the article. The only hang up to that is that to tie the free content to the tech company’s hardware, they would have to do some sort of DRM, which defeats the whole purpose of cutting big media out of the loop.

  4. Jeff writes:

    > Hey Todd, good to “see” you here.

    Y’know, you sometimes stumble across some very interesting places by chasing the URLs in people’s sigs. 😉

    > I would have to think that the majors have a
    > better deal than I do.

    But it still isn’t enough for them. The majors desperately want Apple to abandon its one-price-fits-all strategy so that they can charge more for current titles. If they win this battle, do you suppose we’ll see a decrease in the price of titles from the back catalog? Fat chance. Why would I pay $0.99 cents per track for the old stuff when I can buy the entire (non-DRMed) CD for five or six bucks?

    > Does that $.29 leave [Apple] any room to
    > really make money?

    Heck, yes — volume, baby! ITMS is now the 7th largest vendor of music on the planet in terms of dollar volume, outselling many of the venerable brick-and-mortar retailers. If ITMS weren’t making a handsome profit, Apple wouldn’t hesitate to open the iPod platform to other DRM formats since doing so would sell even more of the little buggers.

    > to tie the free content to the tech company’s
    > hardware, they would have to do some sort of
    > DRM

    Sure they would; that’s exactly what I meant by “tethered.” But if the content were absolutely free, the music buying public would suck it up with a straw, DRMed or not, without complaining for even a second about the fact that it could only be played on one platform.

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