Geekspin Blog

The giant stirs, does Amazon have what it takes?

Posted on: February 18, 2006

Big news is this article on Amazon making moves to join iTunes and Napster in the digital music realm.

Rumour has it that the service will been a $5 – $15 dollars a month all-you-can-eat like Napster and that it will not follow the 99c model as offerered by iTunes. Additionally they will make it easy to transfer songs to digital music players and talks are in progress to secure the rights to provide purchasers of traditional CD’s access to free mp3 downloads. (fair use?)

Amazon plan on possibly making free branded players available to new subscribers, possibly preloaded with music that fits your buying profile.

There does seem to be potential traps and unknowns for Amazon, some of these from the ArsTechnica article:

  • Do they have the clout as a non-specialist retailer to compete against specialist and focus shops like iTunes, moreover can they concentrate enough on the service to keep everybody happy and to keep it fresh. Case in point: If I want the newest cutting edge XBox\PS2 game and the best opinionated service, I don’t go to the giant chainstore but to a specialist store where there sole purpose is to serve my addiction.
  • They run the risk of alienating apple, causing the subsequent withdrawal of Apple products from the Amazon virtual shelves
  • Can their player really be as good as the iPod and will the manufacturing cost be prohibitive when Apple has already reserved so much flash memory causing the prices to rise artificially
  • Is there really space in the market for another player? If the service fails, how much will it damage Amazons name?
  • How will digital music sales hurt the sales of CD’s on Amazon, and how many subscribers do they need to offset the losses?

This quote from C|NET underlines why we need to back Amazon:

Apple, which sold 14 million iPods last year, has expanded its lead in digital music. Apple increased its market share last year in the United States to 67 percent of digital music players from under 49 percent in 2004, according to the sales and marketing research firm NPD Group.

No one company should ever be allowed to take up so much market share, competition is definately needed and at the end of the day it will benefit the consumer.

If Amazon can really pull there act together I can see some market slipping away from Apple, brand loyalty in the modern consumer is essentially dead, money talks louder.

This is all very fantastic and I for one would support it if the give access to us South Africans, iTunes has shunned us from their service and options are limited for me at the moment.


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