Wednesday, 3 December 2008

Amazon’s New Music Store Undercuts itunes

Online retail website Amazon’s UK site has launched a music download service offering tracks from 59p each and albums for £3. The new store appeared on its website overnight with no pre-launch publicity, substantially undercutting the prices of Apple.

The new music store offers more than 3 million songs from the four major labels SonyBMG, Universal, EMI and Warner, as well as independent labels such as Beggar's Banquet and Cooking Vinyl.

The move puts Amazon in direct competition with Apple for a stake in the growing market of online music sales, which in the UK alone was worth an estimated £163m in 2007.

Unlike Apple’s iTunes store, the music available from Amazon will be DRM-free which means once users download a track, they are able to load and play it on any device: personal computers, mobile phones, and portable media players, including the iPod.

The current number one album in the music charts, The Circus by Take That is priced at £3 by Amazon whereas Apple are selling it for £8.99. The Amazon shop’s price of 59p per track also undercuts Apple's iTunes Store by 20p.

Apple may have known about the launch as they have cut the price to just £4 for a limited period only, on a selection of popular albums, including Fleet Foxes, Coldplay and Oasis.

Music Industry sources said it was a "reasonable assumption" that Amazon's service was a loss-leading venture similar to its American store launched last year.

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