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Amazon's New Online Music Store Will Be Huge

May 16, 2007 5:22 PM ET

Amazon.com's announcement that it will sell unprotected MP3s through an online digital music store later this year could have huge implications for the future of the record industry. The addition of parts of EMI Music's storied catalog -- a bundle that includes blockbuster titles like the Beastie Boys, Coldplay and hundreds of others -- means the new store could establish itself as a legitimate competitor to Apple Computer's dominant iTunes Music Store. Yes, iTunes will always be the easiest conduit for loading music onto an iPod, but Amazon offers the vision of physical, hand-delivered CDs side-by-side with online songs. And the store's unprotected MP3 format means downloads will play on iPods, Zunes and others.

"We're making a very strategic move that we think will allow us to create a better consumer experience with digital music and boost the digital marketplace," says EMI spokesperson Jeanne Meyer, although she stops short of declaring the store significant competition for iTunes.

Of course, for the Amazon store to grow into a retail force, it needs two things -- catalog and reasonable prices. Although they promise "millions of songs" from 12,000 record labels, Amazon's spokespeople won't give any details about which labels, other than EMI, will be involved. They also wouldn't comment on pricing or when the store will open, other than later this year. The presence of EMI, which announced last month it would sell unprotected MP3s via iTunes at higher-than-usual sound quality, is a big head start. But until larger major labels Universal, Sony BMG and Warner Music include their own music catalogs in MP3 format -- and they've shown no intention of doing so -- the Amazon store has very little chance of catching on with consumers.

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