Report: Amazon MP3 No iTunes Killer

Report: Amazon MP3 No iTunes KillerAmazon MP3, the DRM-free digital music store, is far from a rival to Apple’s iTunes, claims a Tuesday report. The MP3 arm of online retail giant Amazon.com has only 5 percent to 10 percent of the market, compared to more than 70 percent for iTunes, according to All Things Digital.

The report’s estimate cited an unnamed label executive.

The one year-old MP3 store “has failed miserably” as a rival to iTunes, Peter Kafka wrote. Amazon earned $39 million on $82 million in sales – the bulk going to Universal Music Group, the report suggested.

Despite an apparently inability to chip away at Apple’s lead the report said Amazon MP3 provides T-Mobile G1 handset and MySpace an alternative to iTunes to enter the digital music business.

Sony BMG may also be using Amazon MP3 as a foil to force Apple to change how it sell songs. Monday, a report said Sony was asking Apple to modify its relationship to mirror the label’s agreement with Amazon.

“The only entity that has reliable numbers is Nielsen SoundScan. Perhaps someone is whispering in his ears?” Gartner media analyst Mike McGuire told Cult of Mac.

What’s the problem with Amazon? Unlike Apple, Amazon sees everything as a commodity.

“Amazon’s MP3 store works, but it’s just another segment of Amazon’s big online store,” McGuire said. The company had almost $4.3 billion in sales for the last quarter.

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  • Dann

    Well, Amazon certainly has my vote. Apart from redeeming gift cards, I am never using the iTunes store to purchase any more digital music files.

  • Jvc

    I bought some MP3 format songs from amazon.com. The sound quality was not good, compared to iTune downloads.

  • gear

    I’m very happy with my MP3 purchases from Amazon. Bitrate and format are to my liking while itunes’ bitrate and format are not to my liking. I prefer to shop at itunes and buy at Amazon using this helpful script: http://www.advantageousmp3.com

  • minimalist

    I buy all my mp3′s from Amazon and haven;t used iTunes in well over a year. But Amazon has a serious presentation and marketing problem.

    Most of the people I talk to are completely unaware that Amazon even sells mp3′s. And people who visit the Amazon front page would never know that there was an mp3 store there. There are no ads, no banners. Nothing. Its all buried under “digital downloads” in a generic column on the left hand side.

    How about moving that ever present ad for the Kindle over an inch or two and putting an MP3 store ad next to it?

  • Bryan

    iTunes is so easy to use, it’s hard to argue against their store’s layout. Luckily with the http://www.advantageousmp3.com/ site mentioned above, you can use iTunes’ store while purchasing from Amazon.

    For me, I like to convert my songs to ringtones for my Verizon phone using http://www.mobile17.com, and iTunes’ AAC doesn’t allow this. I buy my mp3′s from Amazon now…

  • Susan

    I love Amazon because you can download a song without having to add another program to “handle” it, like with itunes. Just the song, nothing else.

About the author

Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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