Amazon's new MP3 store: an iTunes killer?

Amazon's MP3 store went live yesterday (well, it opened its doors as a public beta) on the US Amazon site. At a quick glance it is an impressive offering for a Beta:

• All MP3s they sell are without any form of copy-protection.
• About 2 million songs are available for purchase which, for a freshly launched public beta service, compares favourably to eMusic and Apple (who claim 2.7 million and three million tracks respectively).
• Half of the songs are priced at US $0.89, the rest at US $0.99. This is cheaper than iTunes DRM-free MP3s ($1.29 each), but eMusic still offers a better deal to US downloaders
• Prices for complete album downloads are in the US $6-$10 range.
• Unlike many other online music stores you don't need iTunes or Windows Media player to download, play or manage the tracks, even so…
•  …Amazon offer an application (for Macs and PCs) that you can download that automatically adds Amazon MP3s to your iTunes or Windows Media Player music library.
• Downloaded tracks can be played on any PC, portable MP3 players or mobile phones that support MP3.
• The MP3s are encoded towards the higher end of MP3's sonic capabilities (256 kbs) and using the (somewhat) more efficient Variable Bit Rate format.
• Of the major labels EMI & Universal have provided the store with (some of) their catalogues.
• Smaller labels at launch include Righteous Babe, HighTone, Madacy Entertainment, Sanctuary, Trojan, Rounder, Sugar Hill and Alligator.
• Radiohead MP3s are being sold by Amazon, the first MP3 store to do so). But no individual tracks, only full Radiohead albums can be bought.

On the downside for the Amazon store:

• Warner and Sony BMG artists are absent. And a large swath of Universal's catalogue is not yet in the store.
• There is no word yet on when Amazon.co.uk will start offering downloads.
• Each MP3 has a 'digital watermark'. However Amazon confirmed that this only contains data indicating that the MP3 was purchased on Amazon. It does not have a unique signature that can identify the purchaser (in other words, it doesn't represent a threat to privacy).
• There is no indication that Amazon plan to deploy the very innovative MP3 pricing model of Amie Street, the small MP3 store they recently acquired (with their pricing model MP3s are initally totally free to download but as more people start to download the song the price rises, up to a predetermined maximum, previously 98 US cents).
• Only customers with US addresses can purchase MP3s.

This last point is obviously a major stickler for those of us over here in Europe but I found that Amazon doesn't enforce this too strictly. Or not yet at least. I discovered that if you have a US address among your shipping addresses you are allowed to purchase a song, even if your billing address is outside of the US. How long this will be allowed remains to be seen but I, with a US shipping address among my registered addresses and a European billing address, had no problems purchasing an MP3. With the current strong Euro against the dollar these downloads represent a fair price to European-based music fans.

With Amazon's announcement, copy protected MP3s are clearly on the way out. Here is one area where Apple is not leading marketplace innovation. But more worrying to Apple must be the fact that the Amazon MP3 store - with its considerable reach to mainstream consumers - represents the most serious competition yet to iTunes.

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