Apple boss Steve Jobs is about to have another new challenger for dominance in the digital music business: Amazon.com’s Jeff Bezos.
The online retail giant has tentatively set a mid-September target for the launch of its long-anticipated music service, sources familiar with the situation said.
The store will offer songs in the iPod-friendly MP3 format and give consumers who use the popular music player an alternative source for major label music besides Apple’s iTunes.
The current thinking on a launch date for the Amazon MP3 store is the week of Sept. 17. However, industry insiders aware of Amazon’s plan caution that it remains a moving target. Amazon has already pushed the timetable on the service’s introduction multiple times.
The service is expected to carry somewhere around 1 million tracks at launch, featuring music from Universal Music Group, EMI and a large number of independent labels.
But it will be missing music from two notable sources, Sony BMG and Warner Music Group.
Both companies require retailers to sell downloads with digital locks that discourage piracy – technology known as digital rights management.
Amazon is not supporting the anti-copying technology, and as a result Sony BMG and Warner Music will not be selling downloads through the service – at least initially.
Still to be determined is what Amazon will be charging consumers for songs and albums.
Initial indications from sources suggest that the retailer is keen on keeping prices low in order to best compete with iTunes.
Unlike Apple, which charges 99 cents for songs with DRM and $1.29 for unprotected tracks, Amazon is expected to have at least two prices for individual songs: 99 cents for new and popular MP3s, and 89 cents for music from emerging artists and back catalog tracks.
Albums are expected to cost between $7.99 and $9.99.
That strategy is said to be rubbing some labels the wrong way. Amazon is said to still be negotiating prices with the majors.
Multiple prices for music, a concept known as variable pricing, has been a priority for the major labels, who have chafed at iTunes’ one price for all songs, regardless of their popularity. But many large record companies want to charge more than $1 for songs from superstar acts, and possibly less for music from undiscovered artists.
Amazon is not alone in trying to push song prices down, not up.
Wal-Mart, the nation’s biggest CD retailer, earlier this month began selling iPod-compatible MP3s from Universal Music Group and EMI at prices well below what Apple charges for digital music. Wal-Mart is selling thousands of MP3s from artists ranging from 50 Cent to Coldplay for 94 cents per track and $9.22 per album.
Other retailers including Real Networks, Google-affiliated Gbox.com, and music retail power Trans World Entertainment are also in the midst of launching MP3 store offerings through Universal.