Amazon (AMZN) Taking it to Apple (AAPL), Taking DRM-Free Global

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In an oddly early release, Amazon says it will take its DRM-free music store global in 2008. This is good news for the music industry, which desperately needs a viable competitor to Apple, and it's good news for music fans, who, in the US, like Amazon's download offering. Amazon has also recently signed all four major labels, making its store far more competitive, and unlike Apple, Amazon offers all its music without DRM restrictions.

Assuming Amazon can execute a global rollout sooner rather than later, this is also potentially bad news for Apple, which has held a near-monopoly on online music since the launch of the iPod. Apple's iPod's sales are slowing rapidly--unit sales missed analysts' expectations in Q4--and an erosion of iTunes's dominance of downloads will open the door a crack for hardware competitors.

(Not that Apple has anything to worry about in the near term: As of this writing, on Amazon, 9 of the top 10 bestselling music players are iPods.)

Perhaps it's Sunday-morning brain fog, but it's not immediately obvious to us why Amazon would break with its announce-it-when-you-launch-it tradition to issue an airy release like this. Usually it's the industry leaders who follow this communications strategy--to deter would-be upstarts--and Amazon's not the leader in this business.

Update: One explanation for Amazon's early release -- an attempt to get Universal Music Group fully committed?

See Also:
Amazon Signs Sony, Now Has All Four Majors DRM-Free
How's Amazon's iTunes Killer Doing? Well, Actually
 


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12 Comments


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AmazonMP3 said:
MIDEM. MIDEM. MIDEM. International label audience.

TM said:
As to the press release timing: Um, Amazon is set to release their earnings this week (30th). My guess this fluffy press release is another lame attempt to "kindle" the stock ahead of a disappointing release, and or, forward outlook. Notice there have been very few earning revisions to AMZN's outlook. Given the recession, that will change, probably dramatically, and probably this week.

Paul said:
Ipod has the player that people use and trust, it works. Where they get the mp3's is up in the air. DRM free is a great start but the price point is not going to work until it becomes more reasonable until that happens people won't pay for downloads.
http://nextthing.wordpress.com/

Peter Kafka said:
Yup, guessing that Amazon's press release may have been a rejoinder to comments made by CEO of Vivendi, Universal Music Group's parent company.
http://www.alleyinsider.com/2008/01/universal-to-amazon-we-havent-committed-to-drmfree-amzn.html

Peter Kafka said:
One possible reason for Amazon's timing: The Midem music conference in Cannes this weekend, where all manner of pronouncements about services, etc are being made (see QTrax).

Bob Caswell said:
If anyone's curious, it's likely the first countries to get this will be Canada, the United Kingdom, Germany, Austria, France, China, and Japan. See here for details:

http://www.techconsumer.com/2008/01/27/amazon-mp3-expanding-internationally-more-drm-free-in-2008/

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