It’s unseemly to gloat that “I told you so,” but I’m not being paid for this gig so I’ll take my satisfaction where I can find it: According to a Digital Music News report on Amazon’s plans (free registration required), Amazon will be integrating its much-rumored digital music offering into its existing CD-centric online store:

MP3s from participating artists will be blended into the larger, existing Amazon store. “They are not trying to replace iTunes, iPod, Zune, whatever,” one source said. “It’s going to look just like Amazon does today.” That means that a search for an artist will yield a number of results, including CDs, merchandise, DVDs, and MP3s if available.

As I previously pointed out:

One of the things I think is most interesting is the potential impact of having [Amazon] sell both CDs and DRM-free digital tracks in an integrated way, and how that might affect the way both CDs and digital tracks are sold and perceived.

Digital Music News also notes that Amazon will likely launch with an all-MP3 offering and without digital content from all major labels:

If major labels opt not to license their tracks in the open format, the ecommerce giant has decided not to wait. “They are utterly, unflinchingly confident that they have 100 percent of the leverage in this situation,” one source flatly stated. “They are not waiting for the [major] labels at all.”

Again, as I wrote before regarding the major labels wanting Amazon to push DRM:

As a top 5 music retailer Amazon presumably has some actual influence over the major labels, and may be able to help push them kicking and screaming into the post-DRM world, especially now that EMI has broken away from the pack. Why give in to major labels’ demands at this time, as opposed to waiting until they might be more eager to make a deal?

And finally, as almost everyone (including me) has speculated, Amazon will apparently offer some form of variable pricing:

Meanwhile, multiple sources also pointed to an approach that includes variable pricing, though the store will insist that providers sell in the MP3 codec.

Unfortunately sloppy language marred one other prediction in the article, namely the question of whether Amazon will introduce its own digital media software:

Instead of competing with iTunes, Amazon will encourage users to incorporate their downloads into the Apple store, and transfer tracks to their iPods. “Stick with iTunes, but buy from Amazon,” one source quipped.

Here the article is confusing the iTunes Store (i.e., the online service operated by Apple) with the iTunes player (i.e., the desktop software used to store users’ digital tracks and synchronize them with their iPods). Obviously Amazon will be offering an online service that is independent of and competitive with the iTunes Store, but apparently Amazon will not attempt to compete with the iTunes player. It remains to be seen whether Amazon will offer some automated or semi-automated way for people to have tracks purchased from Amazon moved into the iTunes player’s catalog. That point aside, coexistence with the iTunes player is a good strategy, at least for now, especially given the immature state of would-be iTunes competitors like Songbird.

Update: Paul Resnikoff of Digital Music News has some additional comments on Amazon’s entry into the digital music market. His main point is that Amazon’s strategy of incrementally adding MP3 content is tailored to Amazon’s strengths as a music retailer, and wouldn’t make sense for anyone else; I agree 100%. He also thinks that the major labels (except for EMI) will sit out this round and wait to see if this whole “let’s sell DRM-free music” thing is just a fad; no surprise there.

neal - 2007-04-26 18:37

Amazon’s goal should be to make it as easy as it is to move songs downloaded from eMusic into iTunes. Initially, it was a turn off for me to have to move songs purchased from eMusic into iTunes, but then when I realized it took all of two seconds to do this, eMusic became the first place I look for new music. It is going to be awfully tough for anyone to beat the iTunes library/player at this point. Amazon and others should focus on making their stores as compatible as possible with iTunes and the iPod. The “iLike” sidebar (from is a perfect example of this kind of compatibility/integration.