Amazon V. Apple

It doesn't surprise me that Amazon.com has decided to roll out an online music store that'll compete directly with Apple's iTunes. (In case you hadn't noticed Jeff Bezos and co. started selling more than just books a little while back.) What's interesting is the timing.

Amazon says later this year it'll offer digital music in MP3 format from "12,000 record labels" (who knew there were that many?) that will be free of the digital rights management or DRM protection software. Just last month Apple made a similar announcement, except they were a tad more specific about the new pricing. In both cases, the only major record label to sign up for the new approach thus far is EMI. Others like Warner, Universal, and Sony-BMG are waiting it out while testing the idea. What does it all mean? Eventually you'll likely have to pay slightly more for DRM-free tracks, but they'll play on any digital music player. (In some cases the quality will be better, too.)

Why is all this happening now? Well, Amazon.com likely wants to rattle Apple's cage with its announcement, but inside is a mighty big gorilla. I think Apple's CEO Steve Jobs feels the time is right for its shift since the iPod player has virtually saturated the market. He wants to expand somehow. He also likely believes that since iTunes has become the industry standard, and even though people could buy songs from elsewhere to play on their iPods, Apple has developed a dedicated fan base with its iTunes users. I don't think stripping DRM will create a mass piracy surge. Most people have come to accept paying $.99 or even $1.29 for a digital song, and likely won't run rampant when the restrictions are removed. If a certain percentage do decide to make copies, I don't think it'll have an overall negative effect on the recording industry.

Between better quality and more choices (though countered by paying more), it's one of those scenarios in which the consumers will win in the long run. The DRM-free genie is out of the bottle, and now traditional music corporations that have been burned before want to make sure they get their wishes, too.