After “Amazon Unbox” now comes "Amazon MP3" to threaten iTunes

An online heavyweight Amazon.com finally entered the domain of Apple in online music store. After a long silence the Internet retailer on Tuesday launched an online music store that features songs without digital rights management (DRM) software, a move that would likely pose a direct challenge to iTunes for online music dominance.

Amazon, which currently offers Earth's Biggest Selection, yesterday launched a public beta of "Amazon MP3," a new digital music download store that provides DRM-free downloads of over 2 million songs from 180,000 artists and 20,000 labels.

The internet mogul has began Tuesday selling songs, all without copy-protection technology, from two of the four major labels, EMI and Universal Music as well as a bunch of independent labels.

"Amazon MP3 is an all-MP3, DRM-free catalog of a la carte music from major labels and independent labels, playable on any device, in high-quality audio, at low prices," Bill Carr, Amazon.com Vice President for Digital Music said yesterday in a press release. "This new digital music service has already been through an extensive private beta, and today we're excited to offer it to our customers as a fully functional public beta. We look forward to receiving feedback from our customers and using their input to refine the service."

By releasing its new DRM-free music download service with an initial catalog of over 2 million songs Amazon apparently has become an ally and a potential rival to Apple’s iTunes Store that currently contains over 6 million songs.

According to Amazon, the songs are encoded in 256 kilobit per second VBR MP3 format and are entirely free of anti-piracy software that make them playable on any handheld music player, including the iPhone and iPods, along with Macs, PCs, and music players from other manufacturers.

However, most of the songs purchased from Apple's iTunes Store are encoded in the AAC format that can only be played on the iPod.

In addition, individual tracks on Amazon’s new service are cheaper than iTunes. Amazon has priced most of Amazon MP3's songs between $0.89 and $0.99. More than half songs of the catalogue are priced at $0.89, a full $0.40 less than iTunes Plus songs, Amazon claims. The company also guarantees that its top 100 best sellers will remain at 89 cents.

In Amazon MP3 store sells most albums are priced from $5.99 to $9.99, again a bit cheaper than albums in the iTunes Store, which has been selling digital albums at $9.99 apiece.

Singles can be downloaded directly from a Web page, but to purchase an album, users must have the Amazon MP3 Downloader on their system, running either Mac OS X or Windows.

The online retail giant has struck a deal with British-based music publisher EMI Music and Vivendi owned Universal Music Group, world’s largest record company, to include their music catalogs in its online music store. Amazon claims it has secured music content from 12,000 other music labels.

Alligator Records, HighTone Records, Madacy Entertainment, Sanctuary Records, Rounder Records, Righteous Babe Records, Sugar Hill Records, and Trojan Records are the major independent labels that will offer their catalog of music for the first time as DRM-free MP3s.

Last year on Sept. 7, the leading purveyor of goods online, Amazon.com rolled out its long awaited online video service, called Amazon Unbox, through which the widely known e-commerce site sells digital products, offering movies and television shows that can be downloaded and watched on a computer or portable video player.

The Amazon Unbox retails most movies for $7.99 to $14.99 and most television shows for $1.99 (the same price as Apple’s iTunes Music Store). The service offers TV shows from such networks as CBS, Fox, A&E and MTV and the films. Consumers can take movies on rent for a 24-hour period for $3.99.

Amazon’s video download service competes with an array of digital video stores including iTunes Music Store of Apple, Google, Movielink, CinemaNow Inc. and Time Warner Inc.'s AOL. The Amazon Unbox video service until now has offered thousands of movies, television shows and other videos for download to PCs and any Windows Media Video-compatible portable devices.

This year in February, Amazon joined hands with digital video recording service TiVo to make the video content available to download directly to a customer’s TiVo box for playback on their television set.