Amazon’s MP3 store - which sells only songs without copy protection - has quietly become No. 2 in digital sales since opening nearly six months ago. That’s even though Apple dominates digital music with its iTunes Store (the second-largest music retailer in the world, after Wal-Mart) (WMT) and its hugely popular iPod.
The push for copy-protection-free music began nearly a year ago, when Apple and major label EMI shocked the industry by announcing a landmark arrangement to sell 150,000 songs without digital rights management (DRM) software. It was the first time a major label had agreed to such terms.
Amazon’s arrival “removed some of the stranglehold iTunes had on the market,” says Ted Cohen, a former EMI Music executive and managing partner of the Tag Strategic consulting firm.
Apple originally sold each DRM-free song for a premium, $1.29, compared with 99 cents for a song with copy protection. But Apple was forced to lower the price to 99 cents when Amazon launched its MP3 download store at that price.
Pete Baltaxe, Amazon’s director of digital music, won’t say how many songs Amazon has sold but will say that consumers love the experience.
“What we hear a lot is, ‘Thank you.’ They appreciate that everything is DRM-free and so comprehensive,” he says.