Amazon Goes Digital

[method77]

Amazon Appears to Be Moving Toward Offering Digital Music

By MYLENE MANGALINDAN And ETHAN SMITH

Internet retailer Amazon.com Inc. appears to be moving toward offering a digital-music service, joining a crowded field that includes Apple Computer Inc., Napster and RealNetworks Inc., among others.

Amazon has held talks with record-label executives in the past two weeks about licensing music, according to people familiar with the discussions. Those people say Seattle-based Amazon has discussed with the music executives the type of service it might offer, the songs that would be made available and how to structure agree" ments for licensing them.

Amazon indicated that it is interested in launching a digital-music service in the fourth quarter of this year, according to people who have been briefed on the discussions.

In another sign of Amazon's likely intentions, the company has posted a job listing on its site for a content acquisition manager for "our forthcoming Digital Music Service." This employee "will seek, and license digital music content world-wide, including content from major recording labels and independent recording labels and artists," the posting said.

Amazon spokeswoman Patty Smith declined to comment on the possible music service. "We never speculate about what we mayor may not do in the future," she said. But Amazon long has harbored ambitions of offering more "digital content," such as music and movies. In December the company posted on its Web site original short films that featured products sold on the site. In April it allowed Internet users to view and rate short films submitted by amateurs in New York's Tribeca Film Festival. Last month it displayed short videos involving celebrities who delivered Amazon purchases as part of its 10-year anniversary Amazon also Webcast a concert featuring Bob Dylan and Norah Jones on its site as part of its anniversary celebration.

"Digital media is very important to us," Amazon Chief Executive Jeff Bezo said in an interview last month. "The immediate reason we're doing those things is it brings traffic to the Web Site. It does let us stretch our legs and figure out how to do massive amounts of streaming and video downloading and so on."

Details of Amazon's plans aren't known, including whether the company plans to sell music on a

song-by-song basis, rent it via a subscription service as some combination of the two.

It also isn't clear how much of an impact Amazon might have on the crowded online-music field, dominated by Apple's iTunes service.

Josh Bernoff, an analyst at Forrester Research, a market-research firm, said he wouldn't expect Amazon to have a big impact immediately. But Mr. Bernoff said Amazon has managed to differentiate its offerings in other highly competitlve markets, such as selling compact discs.

"They are particularly good in environments where there are thousands of other choices," he said.

Amazon is interested in digital music as an additional revenue source, and as insurance against a decline in the sale of musicCDs, said Mark Mahaney, an Internet analyst at Citigroup. "If customers want their music digitally, Amazon will be there to give it to them," he said.

But Mr. Mahaney said Amazon faces obstacles to making money in online music. "It seems like a low-margin business. It's a tricky model," he said.

[Ken]

Great!

More bullshit overpriced music with restrictive usage and limited format availability!

I can't wait to NOT use it!

I’m so happy! Somebody shoot me!