Amazon and Warner Music Group unite to threaten iTunes

Online heavyweight Amazon.com Inc. announced Thursday that it has added music downloads from Warner Music Group to its digital music store Amazon MP3. The online music and book retailer said that audio downloads from Warner Music Group’s song catalog are now available to customers on its recently opened online music store that features songs without digital rights management (DRM) software.

The New York-based recorded music company, Warner Music said that its songs will be available without Digital Rights Management, or DRM, and can be transferred to different digital formats.

"We believe that giving consumers the assurance that the music they purchase can be played on any device they own will only encourage more sales of music," said Michael Nash, SVP of digital strategy and business development for Warner Music Group.

In September, Amazon entered the domain of Apple in online music store by launching its own online music store Amazon MP3 that currently provides DRM-free downloads of over 2 million songs from 180,000 artists and 20,000 labels.

By releasing its new DRM-free music download service with an initial catalog of 2.9 million songs in MP3 format, the internet mogul Amazon apparently has become an ally and a potential rival to Apple’s iTunes Store that currently contains more than 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 has also guaranteed at the time of store’s launch 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.

"Our customers are delighted with our DRM-free MP3 service. We have received thousands of emails from our customers since our September launch thanking us for offering the biggest selection of high-quality MP3 audio downloads which play on virtually any music device they own today or will own in the future," said Bill Carr, Amazon.com Vice President of Digital Music. "With the addition of great Warner Music Group content, our customers will discover even more of the music they love on Amazon MP3."

Warner Music Group is home to a collection of the music industry’s widely-known record labels, including Asylum, Atlantic, Bad Boy, Cordless, East West, Elektra, Lava, Nonesuch, Reprise, Rhino, Roadrunner, Rykodisc, Sire, Warner Bros. and Word.

Shares of Amazon jumped $1.42 to $94.27 in morning trading on NASDAQ, while Warner Music shares rose 7 cents to $6.04 in morning trade on the New York Stock Exchange.