Amazon MP3 already No. 2 behind iTunes

Amazon MP3 is quickly catching up to iTunes despite having been on the market for only a fraction of the time, according to new data. Launched in September, the web-based music store is now ranked second in the US only to Apple's service and is the highest-ranked store to offer all its tracks without digital rights management (DRM). The success is credited largely to the lack of copy protection, which allows songs to be played in nearly any modern operating system as well as any portable devices, including historically locked-down devices such as the iPod or the Zune.

A wider-ranging catalog is also cited as key to Amazon's success. While Amazon stocks 4.5 million songs versus Apple's 6 million, the former store includes albums rarely found online, such as Radiohead's back catalog as well as Jay-Z's American Gangster. Amazon is also the only store to have secured all four major labels for DRM-free music and holds much more of the unprotected content. iTunes was first to offer DRM-free major label tracks in spring 2007, but remains limited to 2 million songs from EMI as well as numerous independents.

Amazon's offering was also initially helped by lower prices, which sold some songs for as little as 89 cents versus the $1.29 charged for unprotected iTunes music.

The shift is widely believed to be deliberate on the part of the major labels, which have complained about Apple's continued dominance of iTunes. Sony BMG, Universal, and Warner have all to varying degrees offered DRM-free tracks at many major stores except for Apple, including Wal-Mart and other smaller outlets that until last year were pushed to sell songs with Windows Media DRM and other formats incompatible with iPods.

Filed under: iPod, industry
Other story tags: iTunes, Zune, Amazon, Wal-Mart