Amazon MP3 launches: Apple has competition, finally

Coming on the heels of the shuttering of Michael Robertson’s CD Anywhere and the collapse of Richard Branson’s Virgin Digital, now would not seem an auspicious time to launch an online music download store. But that’s what Amazon is doing today. The big difference is that they aren’t trying a subscription play, and they aren’t using DRM; they’re selling MP3s.

This factor proves that Amazon has been paying attention. Customers don’t want to be shackled to DRM? We’ll sell music without DRM.

That doesn’t mean that Amazon’s service, named Amazon MP3, will be a hit right out of the park. A music store is more than just listing inventory and collecting money; it’s providing the ability to find the music. On that score, you need content, user interactivity (playlists, etc.), and inventory. Amazon has content on their physical-CD store, but bizarrely, none of it carries over to the digital download side—no reviews, nothing. Site navigation is lacking, too: you can bring up a list of all 194 songs in inventory by Radiohead (or on tribute albums), but there’s no ability to sort the resulting list by album or artist.

That leaves inventory, and here Amazon would seem to have some advantages over iTunes, such as participation by Universal and inclusion of some hard-to-get artists like Radiohead. However, this is no knock-out blow against iTunes. For one thing, Radiohead were in the iTunes store at launch until the band and their agents found out, and iTunes was forced to pull their music when their label realized that they didn’t have digital distribution rights. Will the same thing happen again?

And it’s rude to bring it up, but I wonder about capacity. In the past, Amazon had problems keeping up with traffic volumes around holidays, and that was just with HTML pages. I wonder what they’ve done to scale up to serving 100 MB worth of download for each album purchased?

At this point, I think the party with the most to lose here is eMusic. Amazon made a point in their press release of calling out indie labels (Righteous Babe, Rounder, and Trojan among them) who are selling DRM-free MP3s for the first time; normally these would be eMusic’s bread and butter. I don’t think satisfied customers of eMusic like myself will cancel their subscriptions, but this might impair their ability to grow.

But Amazon, finally, represents real competition to the iTunes store, which is actually kind of exciting. Maybe they’ll turn up the pressure to sign hold-out artists and labels.