Amazon #2 Online Retailer Behind iTunes

[phelix_da_kat]

It's still thesame outcome?

I thought the record companies wanted an alternative to Apple because they were uncomfortable with thing such as:
- Apple's dominance
- Their push for uniform pricing
- selling singles
- ie losing control..

But they enlist and "promote" Amazon by providing "more" of an advantage over Apple.

I like competition - but it this not going to end up in the same outcome:
- cheaper music
- sales of singles
- if Amazon is cheaper, is the artist getting "less" as I doubt the record company is.

 

[eastcoastsurfer]

this is bad! anybody who buys music from amazon, who is an user, should feel GUILTY!!



i am FAITHFUL!!

This has got to be the one of the saddest things I've ever read...

 

[happydude]

ridiculous

this is bad! anybody who buys music from amazon, who is an user, should feel GUILTY!!



i am FAITHFUL!!

apple is no more exempt from needing healthy competition to spur on development and keep pressure on to provide good and decent service to their customers than anyone else. apple fans should be ecstatic amazon is doing what they are - providing music that can be played on ipods to further sales of ipods (the actual money maker compared to itms) as well as shifting overall online music providers in the way of drm free including eventually apple. end result, apple will eventually go drm free AND continue to dominate the digital music player market. win win for apple and customers.

 

[LagunaSol]

Why should Apple control the price at which they sell their own product?

Fair enough. But Amazon isn't exactly selling for "record company dream prices" either. And if you really think the music syndicate would sell songs for $.10 (even old songs), you're in La La Land.

Record companies: "We're going to provide an unfair competitive advantage to Amazon so we can have more control over the pricing of our music."

Consumer: "Hooray! How much will you sell songs through Amazon for?"

Record companies: "99 cents."

Consumer: "Wait, that's exactly what Apple charges!"

Record companies: "Um, or...89 cents?"

Consumer: "Something smells funny."

It's like when NBC/Universal griped about Apple's pricing on TV shows - everyone knows they were griping about not being able to raise prices, not lower them.

I'd love to think that by buying from Amazon I'm helping spur competition and innovation. Instead I feel like I'm getting used.

Its a common mentality that the consumers are somehow entitled to some kind of say in how the music labels operate.

Um, yeah. It's called the free market system. Have you heard of it?

 

[BongoBanger]

Hmm... a lot of people missing a few things here...

1) Apple tried to play hardball with the major labels by imposing rigid sales conditions on their products. As iTunes was the only significant on-line player at the time they were kind of forced to knuckle down into Apple's closed shop business model. However, the market has moved on and other players with significant retail muscle - i.e. Amazon - began setting up on-line distribution channels with less stringent restrictions. Apple reacted by looking to sign DRM free arrangements with the big four, however, if you crap on people on the way up they have a tendency to crap on you when you come cap in hand to them. EMI agreed, the rest - so far - have not.

In summary, the distribution problem iTunes has now are kind of Apple's own making.

2) Amazon launched their on-line service in the US as a pilot to see if they could actually compete against iTunes and make the business model work. The pilot has now delivered a successful proof of concept and Amazon have announced they will go global in 2008 as a result.

3) Competition is good because it promotes better choice, better pricing and better supply. It's really that simple. No-one is saying you have to use Amazon if you're a died in the wool fanboy but, hey, the option's there and it may mean you end up with a cheaper iTunes store.

That's it really. I expect Amazon to evolve as time goes by - remember the first iterations of iTunes were a bit awkward - so we'll see how things go from there.

 

[LagunaSol]

The pilot has now delivered a successful proof of concept and Amazon have announced they will go global in 2008 as a result.

The problem is their concept has only been proven successful because they have been given an unfair competitive advantage over iTunes.

Apple publicly proclaimed the DRM-free "proof of concept" before Amazon launched their store. Yet Apple isn't allowed to sell DRM-free music.

Competition is good because it promotes better choice, better pricing and better supply. It's really that simple. No-one is saying you have to use Amazon if you're a died in the wool fanboy but, hey, the option's there and it may mean you end up with a cheaper iTunes store.

How is it "competition" if I'm not even given the choice of DRM-free music from Apple because the record companies refuse to permit it???

Name me one thing Amazon has over Apple other than the blessing of the music syndicate to sell DRM-free music. Selection? Nope. Ease of use? Nope. More enjoyable user interface? Nope.

I fail to see any legitimate "competition" here.

I don't buy from Apple because I'm a "fanboy." Actually, I don't buy much music from Apple at all. Frankly, I don't like DRM and I definitely don't like 128 kbps quality. Yet when I buy from Amazon I realize I'm being used in a weasel-ish ploy to eventually force higher prices on the market.

Lose-lose situation in my book.

 

[sleepingworker]

I couldn't care less...

I still prefer to buy the CD and rip the tracks with the LAME algorithm at a very high VBR (usually at least 244 kbit).

I found the quality of the MP3 files at Amazon or the unprotected files on iTunes simply too low (use them to DJ in a club at high volume or at home over a good home stereo system and you will see/hear what I mean. feel free to make an A/B test...).

until they start offering files at 320kbit, I'll buy the tracks that I can't get on CD on Beatport.com, Bleep.com or Boomkat.com. If I want a track directly from the artist's mastertapes in the best possible quality, these are the only serious choices available.

don't get me wrong, for the casual listener and for iPod both iTunes and Amazon are fine, but for professional use or the demanding listener it's not enough...

Although I am not a DJ or in the music industry, I have kept all of my CD's. I sometimes buy off iTunes for recreational listening and the AAC or MP3 file is just fine. But I still want to have my not only a hard copy of my favorite music, but also in a format that retains a large amount of audio information ... and without restrictions.

 

[BaldiMac]

Of course, the major labels are promoting the fact that Amazon is #2 in order to prop up a competitor to iTunes. But it probably isn't even true. eMusic claims that it is actually #2.

http://www.macworld.com/article/132714/2008/03/emusic.html

eMusic actually provides numbers. Which Amazon conveniently does not provide. Who would you believe?

 

[pagansoul]

My main source of music is the Pendergrass Flea market. I pay $5 for a used CD and $30 if I buy 10. Only in the last 2 years I have purchased about 10 singles and 2 full CDs from iTunes, from emusic, about 10 cds worth and Amazon about 4 cds. My collection is about 600+ cds which I have been working on since 1977 (edit to 1987, where did those 10 years go). I always prefer the actual CD if I can find it. I know my main source will always be the reseller market. I think the online stores are great for a quick fix but I tend to eventully get the CD if I can find it at $5 or less.

 

[Cameront9]

I read this on iLounge yesterday. Thoughts:

While I welcome the competition, it makes me extremely angry that the record labels are not allowing Apple to have DRM free music. Anyone that says Apple is purposefully keeping the DRM to sell iPods is ignorant. Apple would go completely DRM free in a heartbeat if the labels would let them. They don't need the store to sell iPods--iPods sell themselves. But if they can offer songs to ANYONE with a player that plays AAC, they can bring the store to a much bigger market, and perhaps even make a profit off of it.

How quickly the record labels forget that without Steve Jobs, there would likely BE no DRM-free online distribution--it's possible that the labels might not even be here today. Apple was the first company to make online sales attractive and easy for the consumer--they took online sales mainstream.

If the record labels were truly out to create an even marketplace, they would allow DRM-free tracks on ALL the online stores. But no, they whine about Apple having "too much leverage," so they give Amazon an unfair advantage. Frankly, such a thing should be illegal.

Also, I have seen it mentioned several times here that there is no variable pricing on iTunes. That's not true. There's no variable single pricing--it's all 99 cents--but there is variable Album pricing. I've seen albums for more than the usual 9.99--Pink Floyd's "Wish you were here" being one example.

Bottom line--I wish the record companies would grow up and start acting like a real business..

 

[seedster2]

I applaud what the record companies are doing. It's quite smart and the average customer likes cheaper equivalent alternatives. They are well within their rights to artificially create competition with their product.

Apple has a history of playing hardball (e.g. iphone and Verizon and Asian telecoms) and few scream bloody murder. Why is their all of this uproar and silly brand loyal crying.

I rarely buy music online because of the subpar quality, but I have auditioned Amazon's store is great and integrates seamlessly with Itunes. Itunes is no Bergdorf's so I fail to see the need to pay them more. In fact the Itunes store is becoming a TJ Maxx.

DRM-free allows for the sale of more ipods as well as competing MP3 players. Healthy competition is what apple needs to remain innovative.

 

[sleepingworker]

My main source of music is the Pendergrass Flea market. I pay $5 for a used CD and $30 if I buy 10. Only in the last 2 years I have purchased about 10 singles and 2 full CDs from iTunes, from emusic, about 10 cds worth and Amazon about 4 cds. My collection is about 600+ cds which I have been working on since 1977.

That you have been collecting Compact Discs since 1977 is incredible (in the truest sense of the word) ...

"The first Compact Disc for commercial release rolled off the assembly line on August 17, 1982, at a Philips factory in Langenhagen, near Hanover, Germany. The first title released was ABBA's The Visitors (1981).[7] CDs and Sony's CD player CDP-101 reached the market on October 1, 1982 in Japan, and early the following year in the United States and other markets."

http://en.wikipedia.org/wiki/Compact_Disc

 

[BongoBanger]

The problem is their concept has only been proven successful because they have been given an unfair competitive advantage over iTunes.

Not really - Amazon sells cheaper in general and the tunes mostly have higher bit rates.

Apple publicly proclaimed the DRM-free "proof of concept" before Amazon launched their store. Yet Apple isn't allowed to sell DRM-free music.

Apple sells DRM free music from EMI. You'll also note that Apple only started promoting DRM free when it became clear its competitors were considering their own online retail services.

To complain that Apple are at a disadvantage here is to totally ignore the advantage their restrictive business model gave them over the last few years. The trouble with holding a knife to your suppliers' necks is that when the position changes they aren't exactly inclined to do you any favours.

This problem is of Apple's making, no-one else's.

How is it "competition" if I'm not even given the choice of DRM-free music from Apple because the record companies refuse to permit it???

You have the choice to buy the music form iTunes with their conditions attached. Before you start to go on about 'competition' you may also want to review Apple's business model in this market.

Name me one thing Amazon has over Apple other than the blessing of the music syndicate to sell DRM-free music. Selection? Nope. Ease of use? Nope. More enjoyable user interface? Nope.

Aside form the two I already gave you? I've also pointed out that the Amazon model is in its early stages and that he first iteration of iTunes wasn't as smooth as it is now. They, like iTunes did, will get better with time.

I fail to see any legitimate "competition" here.

Then you're deluding yourself.

I don't buy from Apple because I'm a "fanboy." Actually, I don't buy much music from Apple at all.

So why get so upset about it?

Frankly, I don't like DRM and I definitely don't like 128 kbps quality. Yet when I buy from Amazon I realize I'm being used in a weasel-ish ploy to eventually force higher prices on the market.

You have a pretty shaky understanding of economics then. More supply leads to cheaper prices whereas as a monopoly means the provider can charge what they want. I don't imagine for a minute Amazon will be the last provider to seriously go on-line - other providers will be watching how they do with interest and a view to their own launches.

Lose-lose situation in my book.

Sorry, you're just plain wrong here. Competition is virtually always good for a market.

 

[howard]

speculation on how close amazon is behind apple...

I believe in all music retail sales amazon is behind target, then best buy, then apple, then walmart. So if that includes all cds sales as well as digital sales, then they are probably still quite a ways off in just the digital market.

I look forward to the competition. I didn't realize that Amazon sold songs at a higher bit-rate.

I'm hoping that labels possibly haven't supplied non-drm songs to apple because of contracts that haven't expired yet. This may have been Amazon's benefit start much later in the game and received a better deal because labels are realizing that selling digital works. My guess its just a matter of time before most of Apple's library is itunes plus.

 

[BackInTheSaddle]

I like buying music from Amazon...somehow it's easier to find and buy the tracks I want than it is with iTunes. The Amazon downloader works great!

DRM hasn't been a big issue for me as long as I can use the music files fairly (make backups, burn CDs, etc.) but I can see the potential for companies to use it to squeeze consumers. On the other hand, most of the anti-DRM people don't seem to care if content producers can make a profit when the products are pirated. There's got to be a balance there or people won't have an monetary incentive to make great music or software.

In the end though, DRM will probably disappear as the music companies finally figure out that the best way to combat piracy is to make it easy to download and use music for a reasonable price. Apple has done more than any other entity to demonstrate this.

 

[BaldiMac]

Sorry, you're just plain wrong here. Competition is virtually always good for a market.

I don't think it's as simple as "plain wrong". The increase in competition is only among the middle men - the retailers. If the actual suppliers (major record lables) are colluding to artificially prop up a retailer, then it is to get the supplier better terms, not the consumer. The retailers are all barely making a profit, so there isn't much advantage to be gained by consumers in retailer competition.

Any collusion of the major record labels to impact the market is definitely a problem for consumers, and probably illegal.

I'm not saying the iTunes is the best deal for consumers, but I do believe that it is a better deal than what we would get if the major labels could get what they want.

 

[w00master]

I don't think it's as simple as "plain wrong". The increase in competition is only among the middle men - the retailers. If the actual suppliers (major record lables) are colluding to artificially prop up a retailer, then it is to get the supplier better terms, not the consumer. The retailers are all barely making a profit, so there isn't much advantage to be gained by consumers in retailer competition.

Any collusion of the major record labels to impact the market is definitely a problem for consumers, and probably illegal.

I'm not saying the iTunes is the best deal for consumers, but I do believe that it is a better deal than what we would get if the major labels could get what they want.

Looks like we're in a "Chicken or the Egg" circular argument, but I would like to propose something to everyone:

Why does Apple allow iPhone app creators/publishers charge whatever they want, but not allow the music industry the same thing?

I despise the music industry, but ultimately I do feel it is their right to charge whatever their want. It is their product, whether we like it or not. Additionally, if the music industry does start overcharging for certain songs/albums, then guess what? People will stop buying those songs/albums, hence they will begin to lower the prices.

I do agree that "in the beginning," Apple limiting the price to $0.99 per song, and $9.99 per album was a great idea. However, it's now time to move on. Let the music industry themselves put their shoe in their mouth. In the end, price fluctuations in music is going to impact music sales more than actual iPod/iPhone sales.

w00master

 

[killerrobot]

Of course, the major labels are promoting the fact that Amazon is #2 in order to prop up a competitor to iTunes. But it probably isn't even true. eMusic claims that it is actually #2.

http://www.macworld.com/article/132714/2008/03/emusic.html

eMusic actually provides numbers. Which Amazon conveniently does not provide. Who would you believe?

eMusic provides their own sales numbers not those of Amazon. Kind of hard to make a valid statement with half the facts missing -- which was your point in the first place no?

 

[BaldiMac]

eMusic provides their own sales numbers not those of Amazon. Kind of hard to make a valid statement with half the facts missing -- which was your point in the first place no?

Yeah, that's why I said we have to choose who to believe. But I understand your point. I was just saying that I'm more likely to believe the company that publishes there sales figures than the company that doesn't.

Plus, some rough figures would make it unlikely that Amazon outsells eMusic.

iTunes is currently selling about a billion songs a year with 80% of the market. That would mean that the rest of the market shares about 250 million downloads. eMusic claims 7 million downloads per month which is about 85 million a year. That would be 165 million downloads split between Zune, Real, Walmart, Amazon, and all the rest. I think it is unlikely that Amazon has had more downloads than all the rest combined.

Also, I think I read somewhere that USA Today excluded eMusic on purpose because it was subscription only. Even though it is more of a prepayment thing than a subscription. I can't find the link though.

 

[BongoBanger]

I don't think it's as simple as "plain wrong". The increase in competition is only among the middle men - the retailers. If the actual suppliers (major record lables) are colluding to artificially prop up a retailer, then it is to get the supplier better terms, not the consumer.

True to an extent, however a supplier will always seek to get the best return for his goods under the most favourable trading conditions. One distributor having a monopoly - and thus being able to dictate terms to the suppliers - isn't good for them. By engendering completion in the distribution market the supplier is benefited too.

 

[bankshot]

So has anyone actually done a listen-off?

The reason I ask is this: when I've listened to the samples on Amazon versus the comparable samples on iTunes, the Amazon ones sound significantly lower-quality to me. Maybe Amazon's samples are highly compressed, I don't know, but I've been hesitant to spend much money over there since I did the comparison.

I haven't done a blind listening test with Amazon MP3s vs. iTunes or CD source, but I can assure you that the Amazon previews are indeed much lower quality than the files you end up purchasing. This is one reason why I still prefer iTunes for previewing music. And if they have it available as iTunes Plus, I'll consider purchasing from them; otherwise it's either the CD or MP3 album from Amazon.

I've been quite happy with the quality of downloads from Amazon (I've purchased 6 albums from them so far) as well as the seamless integration with iTunes. Their support was also quite helpful when my Mac kernel panicked in the middle of a download (unrelated to the Amazon download), leaving me with only part of what I'd purchased.

My preferred order for purchasing music now is:

1. CD from Amazon or eBay
2. iTunes Plus
3. Amazon MP3

If it's one of my favorite artists, the CD is still pretty much the only option I'll consider. Otherwise if the CD is impossible to find or if it's something I'm less strongly interested in, I'll happily buy digital. Since iTunes Plus is still pretty sparse, I anticipate plenty of Amazon MP3 purchases in the future. Competition is good!

 

[BaldiMac]

True to an extent, however a supplier will always seek to get the best return for his goods under the most favourable trading conditions.

Which is fine, unless the major labels are colluding to affect the market in a monopolistic manner.

One distributor having a monopoly - and thus being able to dictate terms to the suppliers - isn't good for them. By engendering completion in the distribution market the supplier is benefited too.

That was my point. The fact that the major labels are propping up Amazon benefits the labels, not necessarily the consumer. If another distributor (like eMusic) became competitive with iTunes without artificial advantages from the major labels, then it would necessarily be because of advantages that it presents to the consumer.

 

[rhett7660]

I was thinking the same thing. I want to see the numbers to see how close or how far Amazon.com.

I use both, they both do what I want and the both do what I need. If one doesn't have it, and the other one does then I buy it from the one that has it.

If I like the ablum and want the media then I purchase the cd and rip it myself.

I just wish someone would offer 320 mp3's or aac files.

 

[Unspeaked]

That was my point. The fact that the major labels are propping up Amazon benefits the labels, not necessarily the consumer. If another distributor (like eMusic) became competitive with iTunes without artificial advantages from the major labels, then it would necessarily be because of advantages that it presents to the consumer.

What doesn't have artificial advantages in the business world?

Do you complain that M&M/Mars has more shelf space at the supermarket checkout than Grandma's Homemade Candies?

What about the fact that Macy's dwarfs the local clothing store down the street?

Do you complain that television studios choose to sell their programs to the major networks and not public access or third tier cable? Isn't it unfair that BET doesn't get first run episodes of "24" to show?

If these conspiracy theories are right, why wouldn't the record labels just pull all their tracks from everywhere and start their own online store selling tracks for five cents and once they've driven everyone else out of business, up the prices?

I know why - because it isn't a conspiracy against Apple.

Do you not believe man landed on the moon, either?

 

[Rantipole]

I've read through (I think) all of the posts on these five pages, and I think that a lot of people are missing a piece of information...

A lot are complaining about how there are still a lot of iTunes tracks which have DRMs, while the same track on Amazon has no DRM. "Sounds like a conspiracy!!! ARRGGG!!"

Well, cool your jets, because I think (and someone, if you truly know the facts, please correct me), I think that the reason the iTunes tracks are not DRM free is because the contract by which iTunes acquired the rights to sell the tracks has not yet completed its term. When the contracts come up for renewal is when the DRM is probably going to come off.

Anyway, that's how I understand the situation.