Amazon to Apple: Make Like a Tree
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Today, Amazon opened up its DRM-free music store, in beta. Sorry iTunes, Rhapsody America and Zune Marketplace, there's a new kid in town. |
Amazon's MP3 music store beta launched with nearly 2.5-million tracks, mainly from EMI and Universal. Reminder: Universal offers DRM-free tracks from most every other store but iTunes. Amazon's artist count is 180,000, which isn't too shabby. This afternoon, I downloaded albums by artists Feist, Maroon 5, Nelly Furtado, Rooney and The Killers.
Amazon's MP3 256Kbps encoding is excellent compared with iTunes 128Kbps Fairplay-DRM AAC tracks. I'm an old radio DJ with aging but good ears. Apple's DRM tracks sound muddy compared with Amazon's 256Kbps MP3 songs. I also prefer Amazon's 256Kbps MP3 encoding to Apple's same bit-rate AAC for its DRM-free tracks. Most folks wouldn't detect a difference, methinks. The Amazon encoding fidelity is comparable to 192Kbps Windows Media Audio; again, it's probably personal preference.
Amazon provides separate downloaders for Windows XP/Vista and Mac OS X. I tested the Mac OS X downloader with iTunes and the Windows downloader with Windows Media Player. Damn, is it slick—and easy. When the customer clicks to buy a song, the downloader launches. Purchased music immediately appears in the iTunes or Windows Media Player library.
The downloading process was considerably more enjoyable on Mac OS X. Internet Explorer 7 security features required considerable user intervention—by my count, five prompts to download the Amazon downloader and purchase one song.
Amazon's MP3 operation is by no means as integrated as the iTunes Music Store. But Amazon brings real music competition to Apple's home Mac turf and to iPod, with a huge catalog of DRM-free tunes that are either cheaper than iTunes or not available from the music store. Amazon's top digital albums are $8.99 each and top songs are 89 cents apiece. Apple charges $1.29 for DRM-free tracks. Apple has never seen music store competition like this on the Mac—perhaps even on Windows.
In an apparent jab at Apple, today Amazon offered a free track for testing its downloader: "Energy" by Apples in Stereo. The iTunes music store only has a 128Kbps DRM version of the song. "Energy" is the top song on the iTunes Music Store by the artist. Poke. Poke.
During the first quarter, Apple surged ahead of Amazon to become the third largest seller of music in U.S. retail, according to NPD. I don't expect Amazon to stay down for long now, particularly if the retailer leverages MP3 downloads with CD sales.
Microsoft, Rhapsody or other music stores/services shouldn't look idly by. Amazon has done something quite extraordinary: It's created a loosely coupled store rather than an integrated all-in-one operation like iTunes or Zune Marketplace. Amazon can sell DRM-free music to anyone, as it would CDs, regardless of media player or music device.
So, rather than create its own media player or closed-in store, Amazon hooks into the two popular media players from Apple and Microsoft. Amazon will need do some content programming to better promote the music, but it's early approach taps into what the retailer already does well: track customers' online purchases and searches and make product recommendations.
David Card, JupiterResearch research director and media analyst, blogged about Amazon's store: "Amazon knows how to sell music. It has a huge customer base. Today, unprotected MP3s are the way to get onto iPods, but they may be the future...Yes, Amazon will have to build a great store."
Apple's success with iTunes leads to the presumption that the all-in-one store is the best model. Actually, the more sensible model is the multichannel retailer, which is why Amazon and Wal-Mart have online music stores. But DRM-free music opens up the stores to many devices, creating opportunity for large music retailers to channel their expertise. Most people buy iPods. But before EMI and Universal licensed DRM-free MP3 songs to online music stores, iPods only supported DRM downloads from Apple. Larger retailers were stuck pushing CDs that could be ripped to DRM-free MP3s.
"Pretty soon, consumers will see the fruit of competition based on pricing, merchandising, packaging, user experience, editorial, knowledge of consumer habits, etc., etc., instead of on random acts of technology," Card asserted.
RealNetworks and MTV recently formed Rhapsody America and there are rumors Microsoft will soon launch a new Zune music player (and hopefully an improved music store). Bad as competition was with Apple, Amazon makes it worse. But Amazon makes for a better tomorrow, too. Competition is good for Microsoft, MTV and RealNetworks, and it's even better for consumers.
Related Posts:
- The Pod Squad, Microsoft Watch, Sept. 6, 2007
- MTV Gets Real, Microsoft Gets Punk'd, Microsoft Watch, Aug. 22, 2007
- Is That 1 Million Zunes Shipped or Sold?, Microsoft Watch, May 29, 2007
- McCartney: Zune Scores, iTunes Misses?, Microsoft Watch, May 22, 2007
- Zune: It's Not a Fire Sale, Yet, Microsoft Watch, April 30, 2007
- What Apple DRM-Free Means to Microsoft, Microsoft Watch, April 2, 2007
- Jobs Calls for DRM Freedom, Microsoft Watch, Feb. 6, 2007
- Whoa, Zune Is Social, Microsoft Watch, January 2, 2007
- Welcome to My Social, Microsoft Watch, December 25, 2007
- Microsoft's Music Madness, Microsoft Watch, Nov. 27, 2006
- Zune Goes to War, Microsoft Watch, November 14, 2006
Comments (13)
1. "But before EMI and Universal licensed DRM-free MP3 songs to online music stores, iPods only supported DRM downloads from Apple."
That's a very poorly written sentence that is mostly wrong. iPods have supported MP3s from the very beginning, so they have supported songs other than DRM downloads from Apple from the beginning. And after EMI and Universal licensed DRM-free MP3 songs to online music stores, iPods still only support DRM downloads from Apple.
2. "but it's early approach taps into what the retailer already does well: Track customers online purchases and searches and make product recommendations."
iTunes already does this and more, if the consumer allows it.
3. You don't mention that many songs are much more expensive than 89 cents - going all the way up to 3.87. In fact, many of these are older hits.
4. You also don't mention that Universal may pull its DRM-free catalog in six months, as it is only an experiment for them.
Posted by mark | September 25, 2007 11:02 PM
Clearly Amazon will not be able to offer these songs DRM-free at this price for very long, as it's not in The Labels' interests. If it were, they'd extend the same option to Apple.
This is a case where Apple handed The Labels a successful business plan for digitial music, and now The Labels believe they understand it and will improve upon it.
This is going to be an excellent test case for Apple versus The Labels. And Amazon is merely a pawn.
Apple sez "If you charge more than 99 cents, people will merely download the songs for free."
The Labels say "We'll hook them with DRM-free music, and then slowly increase the price, which we think they'll pay."
Apple sez "The only reason a label would increase the price is because it is greedy."
The Labels say "The amount we're getting from Apple is indecent."
I have no idea what this digital music scene will look like two years from now, but I'd be interested to hear others' thoughts.
P.S. To keep it Microsoft related, the news here is that WMA as an audio format is dead.
Posted by Christopher | September 25, 2007 11:35 PM
If nothing else, I'm thankful to Apple for freeing us forever of Microsoft's DRM. For that feat alone, Apple should be given a special award.
As for the game the music execs are playing. They shouldn't be trusted. 88 cents isn't what they have in mind when they complain that Jobs is inflexible on pricing. They're really intent on jacking up the prices. After all, those homes in Malibu aren't cheap.
The thing that's wrong with this picture is that artist participation in the sale of their wares is still not happening. In an age of social and information restructuring on the internet, artists are still held captive to the old school structures. The technology company that goes green for (or gives the most green to) the artist will be the winner. It will feel so right, knowing that your purchases are benefiting artists directly. Who knows, the prices might even be cheaper and you'll get twice the amount of satisfaction as an 88 cent purchase from Amazon.
Posted by HG | September 26, 2007 4:09 AM
HG wrote:
If nothing else, I'm thankful to Apple for freeing us forever of Microsoft's DRM. For that feat alone, Apple should be given a special award.
It's not Microsoft's DRM. Apple did not free you from the DRM either, the record labels did.
Posted by evan | September 26, 2007 5:55 AM
Great! more options and better competition.
Posted by CruiserCT1 | September 26, 2007 7:31 AM
evan writes: "It's not Microsoft's DRM. Apple did not free you from the DRM either, the record labels did."
I mean that Apple has had a diametrically opposed strategy with DRM than Microsoft. Apple has never been interested in licensing Fairplay. They just intended to use Fairplay to cover their themselves legally with the music labels. Microsoft's strategy, on the other hand, was to bake their DRM framework into the world's music downloading infrastructure.
One then has to ask if Steve Jobs didn't think that Apple's domination of the legal download scene with its incompatible Fairplay technology wouldn't lead to the elimination of DRM altogether? I give Jobs credit for being a savvy and astute businessman and think he knew all along that the outcome would be DRM's elimination.
You're giving credit to the music labels, but they don't understand technology the way that Steve Jobs and Bill Gates do. All I'm saying is that Bill Gates' solution would have locked us into DRM as a way of life. Steve Jobs' solution, whether intentionally or by arrogance as many of you Apple-bashers would prefer to believe, led us to the elimination of DRM.
I say hallelujah to Apple winning this one.
Posted by HG | September 26, 2007 10:46 AM
Your comment on Apple's quality compared to Amazon is an interesting one as I did a basic comparison as well and found some sounding similar or Amazon's sounding a bit more muddy at times. Unless I missed it you didn't compare Apple's itunes plus music as well...not a mention.
For what it's worth though before some pcnut thinks I'm some pro-Apple fanatic I love the idea that Amazon is jumping into this. Consumers need the competition to keep Apple or anyone else honest.
I'm not sure it's something that Apple would consider doing if the pressure becomes to great but an ideal world would be where Apple could actually offer space, so to speak, within itunes. They simply have to setup within the app a store plugin architecture where a user could access a store like Amazon without going through the browser. I've my doubts that this will happen but it would certainly be a nice feature for Apple and consumers. Apple might even be able to make money off it just as in the windows world 3rd party companies pay money to get their icon on the Windows desktop and such.
Of course if the drm free stuff somehow doesn't work the idea may not work out too well but at that point Amazon won't have the leverage either to be a player.
Posted by Jim | September 26, 2007 11:34 AM
With music CDs, DRM-free MP3s, MP3 players and hardware, Amazon.com now offers "one stop shopping" for music lovers. (I buy CDs there.)
And no, I don't "thank" Apple for doing what was in their financial self interest, or for reducing competition by refusing to license Fairplay, or for refusing to offer a subscription music service.
Posted by TomT | September 26, 2007 11:41 AM
Amazon was playing with downloads long before ITMS. The operative word is "play" and their lack of success to date shows they really aren't very serious in their planning or execution. Amazon, Wal-Mart, and the rest just don't get it. It's not the DRM, it's not the hardware, it's not even so much the price of a track or album, it's the system, the end to end experience that makes or breaks the deal with customers.
Apple understands what customers want, they don't. Game over man.
Posted by Jean | September 26, 2007 12:37 PM
HD,
Microsoft followed what the entertainment industry demanded at the time, and that is to protect their content. Bill Gate's DRM as you put it, is by far the best DRM available, if you choose to have DRM. Finnally, this DRM thing is in my opinion under evaluation by the entertainment industry. Not everybody agrees. Let me express serious doubts on how long they are going to keep offering DRM free content, simply because they stand to loose a lot. We are far away from DRM elimination...
Just a note here to clarify a lot of misconceptions about Microsoft's DRM. Microsoft DRM is not something introduced with Vista, it has been developed several years ago and was not made specifically for the entertainment industry. It was mainly targeted at protecting Office documents and email from copying, modifying and unauthorized access.
Posted by evan | September 26, 2007 2:15 PM
Welcome Amazon ,welcome the competition.
-------
http://www.zdnet.com.au/news/software/soa/Ex-MS-security-guru-dumps-Media-Center-for-Linux/0,130061733,339282399,00.htm
Ex-MS security guru to dump Media Center for Linux?
"Johansson said that DRM software is not only ineffective, but a waste of money which damages businesses that attempt to use it to control the way consumers use copyrighted material.
"How many billions has the industry spent on DRM schemes that the bad guys break in weeks? How many perfectly legitimate users has the industry annoyed and driven away? How many lost DVD sales has it caused? How many lost sales of Microsoft's Media Center software and Windows Vista has it caused because the DRM sub-system randomly decides that you must be a criminal?" he wrote."
Posted by Marco | September 26, 2007 8:38 PM
How many lost sales of Microsoft's Media Center software and Windows Vista has it caused because the DRM sub-system randomly decides that you must be a criminal?" he wrote."
None, It is not even enabled...
Posted by evan | September 27, 2007 3:42 AM
Thank you for that comment Chips ... oops sorry Marco.
But I will go with "Evan" on this one mate !
Posted by Neil | September 27, 2007 5:07 PM