Amazon MP3 Vs. iTunes Music Store

Ali writes "As discussed here recently, amazon.com has launched a public beta of Amazon MP3, a digital music store that provides DRM-free downloads of over 2 million songs from 180,000 artists and 20,000 labels. In comparison, Apple says the iTunes Store now contains over 6 million songs. Here is a head-to-head comparison."

I choose Amazon (Prime)

I still like getting the actual CDs. Better quality, fewer restrictions, less chance of me losing it, etc. With Prime I get them in a couple days, which is fast enough for me, then I convert them to FLAC for later conversion to any other format I desire.

Re:I choose Amazon (Prime)

They're so close to getting it right though; why not, when you order the CD from Amazon, allow you to download the MP3 while you're waiting for the 'couple of days' shipping?

profit margin

They're so close to getting it right though; why not, when you order the CD from Amazon, allow you to download the MP3 while you're waiting for the 'couple of days' shipping?

Wow. That's a killer idea. I hope they steal it.

The problem with that, and maybe with the whole amazon gig is the profit margin issue. My impression, perhaps I'm wrong, was that apple was pocketing less than a dime a song for itunes music store. I suppose that varies a lot with the rate songs are sold since there are many fixed costs. If that dime a song margin is accurate then amazon must be running on fumes since they are underselling Apple. Presumably this is not too server lite either since I'm guessing the songs are watermarked with your ID and then MP3 compressed. So assuming amazon is not getting a better deal than apple it's hard to see how these low rates will last. Recall the record companies wanted apple to 1) share Ipod revenues with them and 2) raise prices on new releases. Given that I'd say either the record comapnies have decided to sell music for less (ha ha ha) or these are teaser rates. Does anyone think Amazon is giving them a cut of music player sales.... So it makes not sense for the record companies to move away from apple to accept even less (unless they were incredibly freakin' scared). So getting back to the CD shipping. That would mean even less profit perhaps or perhaps they could charge $1 for the instant album download option.

Re:Drive customers away from Apple...

After that the next time the contracts are negotiated they raise the rates everywhere and require everyone to use whatever brand of DRM they see fit.

And when neither Amazon nor Apple play ball, they give up and come back. Quietly.

Heck, in that sort of situation Amazon and Apple could probably sue "them" for antitrust violations.

Re:Drive customers away from Apple...

Yeah, don't buy from the outlet that sells exclusively DRM-free tracks encoded at a reasonable bit-rate with no embedded user information. Much better to buy from the one who offers a smaller selection of DRM-free tracks, charges a premium for them and embeds data about you in every track. They're the ones who are really standing up to the labels. And continuing to buy DRM laden tracks will send a clear message to the labels that consumers want DRM-free music.

The grandparent never said to "buy DRM laden tracks", Mr. McStrawman. And you have only Amazon's word that the watermarks Amazon admit are in many of their tracks don't contain personally identifying information; whereas with Apple's watermark-free music you can trivially read or remove any information in the tags.

I think grandparent is wrong about the labels being able to take back the DRM-freeness (DRM will remain dead for the same reason it is dying now: the iPod), but I do expect them to raise prices, as the grandparent suggests. By allowing variable pricing, Amazon has made themselves much more vulnerable to gradually increasing prices (both by the labels and by themselves), when compared to Apple's fixed pricing.

People taking the Amazon MP3 store as some sort of victory against Apple have things almost entirely backwards.
Apple has just won the online music wars far more permanently than they could by simply owning ~80% of the market; the Amazon MP3 store is the Big labels' terms of surrender (well, 2 of them, Sony and Warner are still holding out). Those terms say the labels will let people sell cheap, convenient, DRM-free music that isn't locked down to only Microsoft-approved systems, and Apple will continue to make ludicrous amounts of money selling such systems.

The only real downsides for Apple here are:
1) This comes at a time when Apple is in the middle of trying to grab two new markets with the iPhone/iPod (video and mobile telephony), and you can tell from their product lineup's limitations that they're already having a lot of trouble getting the kind of decent terms that allowed the iPod&iTunes combo to work so well for music. Anything that the movie/TV/mobile-network companies can interpret as a sign of Apple's weakness (real of imagined) is going to somewhat undermine Apple's ability to do for other industries what they did for music.
And
2) Universal has basically said that, at least for the next several months, they will sell DRM-free music to anyone but Apple. Basically they've decided that a free market where consumers can pick the store they like is too dangerous, so they're going to use their monopoly on certain music to artificially undermine their most popular distributor rather than just selling DRM-free music to anyone who will pay and letting the market decide. This is probably a temporary situation imho, as Universal can't throw away income from their largest online distributor forever, and it really doesn't do Apple much harm since they make their real money on iPods anyway and Amazon MP3 works just fine there, but this kind of discriminatory sales policy sets an ugly precedent.

Re:profit margin

The problem with that, and maybe with the whole amazon gig is the profit margin issue. My impression, perhaps I'm wrong, was that apple was pocketing less than a dime a song for itunes music store.

Current estimates are about a dime, with "wholesale cost" (i.e. the label's cut) being about $0.70 for majors and $0.60-65 for independents.

The rest of the cost is supposed to be comprosed of infrastructure, operational expenses, and transaction fees from the credit card companies. I'll eat my own shoes if Amazon's costs aren't lower. They're largely reusing a pre-existing retail infrastructure. And as a major retail operation, they doubtless have a ton of clout with the credit card companies (which are commonly cited as having the next biggest cut after the labels).

Presumably this is not too server lite either since I'm guessing the songs are watermarked with your ID and then MP3 compressed.

Nope. The songs are being provided encoded by the labels and the only watermarks identify the retailer, not the purchaser. Bandwidth would be the predominant cost here.

Re:I choose Amazon (Prime)

"fewer restrictions"

After seeing how many music disks are sold without the CD-DA logo, strongly suggesting that there is non-audio, likely executable code on the disk to interfere with ripping, I have my doubts about this. I find myself wondering if, at this point, buying a DRM-free MP3 from Amazon actually leaves the consumer more liberated than buying a music disk.

Re:I choose Amazon (Prime)

Crap. If I like an song a lot, I end up listening to it over and over and over incessantly. Longest was around 3 weeks. And when I say incessantly, I mean constantly -- just leave the song on repeat. If I'm that stuck and I turn it off, I get uncomfortable as it imperfectly echoes through my head. If I try to listen to something else, I just get frustrated. So anyway, I have a certain subset of songs for which I've really gotten my money's worth.

Re:I choose Amazon (Prime)

You need to seek professional help, my friend.

Bad info in article.

iPod compatibility. Thanks to the lack of DRM, and in particular, Windows-specific DRM, songs purchased from Amazon MP3 will play on an iPod, something that has never been true for a mainstream online music retailer (other than Apple) before.

Wow. I wonder if this place has ever heard of eMusic [emusic.com].

Re:Bad info in article.

eMusic is certainly not a mainstream music retailer. They don't sell you MP3s the way the grocer sells you a melon. You have to sign up for a month and you're allowed to download a song a day, roughly, although nobody does that. I can go to Amazon and spend 89c on a single song and never return. At eMusic, I have to pay $9.99 at least and then I have to remember to cancel it if I don't want it any more.

Re:Bad info in article.

Actually, eMusic does have a $6 per month plan, covering 0-10 songs per month (i.e. averaging at $1.20 per song, or $.60 if and only if you make sure you always download exactly 10 songs in any given billing period.
Of course, even getting to see their plans without signing up is deliberately made difficult, but if you follow the links around from their legalese pages, you find a well buried link to the plans [emusic.com].

I have had no luck in finding out what quality the tracks are ripped with, or what software was used to rip them. Nor any other technical details.

Re:Bad info in article.

Wow. I wonder if this place has ever heard of eMusic.


Your comment was the first time I'd heart of it (or perhaps I'd read of it in passing before, but this is the first time it registered.)

So, I went to go see what how their selection is. Guess what, can't do anything without signing up for a trial (and giving them name, address and a credit card number.) You really think I'm going to do that when I have no idea what bands they even carry?

Plus the "deal" seems to resemble those old shady Columbia House ads my parents would never let me sign up for. $10 for 30 downloads a month. Not sure what it costs to buy more than 30, and of course if you don't choose 30 songs you're still out the money. Sorry, but that doesn't work for me. Buying music is an impulsive thing. I don't want a steady stream of 30 songs to pick a month. I want to buy things on a whim, some times no songs a month, some times going on a tear and buying dozens or hundreds when I discover a new band or genre.

And of course, if they don't have what I want, I'll have to get it elsewhere-- while still paying them their monthly fee. And I guarantee they won't have everything I want. Fuck that.

Maybe this has something to do with why no one has heard of it? Sounds like a pretty crappy business model to me.

Re:Bad info in article.

It is actually possible to brose their selection without giving them your credit card number:
http://www.emusic.com/browse/all.html [emusic.com]

So even slashdotters are uanble to use their site successfully... It took me way too long to figure out that URL. Tried a few approaches, but every single one of them seemes to slam a huge ad and trying to make me write my credit card number to get something "for free".

Frankly, what the hell is their design goal? "Impersonate a scam site"? If I had dropped in there by chance, every single red flag I have would trigger: "SCAM! SCAM! Don't fall for this! Get out! Close the browser, scan for spyware. Phew. I'm safe again."

This is exactly the kind of site I warn my family about and tell them they should never, ever hand even their email to. Kinda sucks when you're a legit site... I'm sure they could have a huge boost in subscribers by changing their fron page to something just a little bit less scammy-looking.

Agree with parent on all points. I have been considering to purchase music from them several times, but everytime I visit their site, I just end up thinking "why bother? this site sucks" and postphone it another 3 months.

EMusic has lots of promise, but fails currently

Sadly emusic is a long way from an ideal mp3 service. I'm a member, and here is my feedback:

• There is a limit choice. Dont expect to find hot new albums there. So far all my searches for artists I listen to regularly has been fruitless. On the plus side, I have downloaded artists I wouldn't have looked at before.
  
• Music is 128kbps bitrate. They're basically delivering the absolute minimum quality that I, and many others, consider usable (yes, I know that's going to be very subjective - but all my music encoded from my CDs is at 256 or 320 - space isn't an issue so why not encode as high as possible).
  
• I'm on the 30 songs per month for $10. Which sounds good at 33c each. However, I like to buy albums, which is extremely awkward as you have to carefully spread them across months and keep track of what you have got so far.
  
• If you dont download 30 per month (or accidently skip a month when you are on the road, as I did) then the 33c per song jumps quickly.
  
• The option to listen to a snippet of a song is lame. Deliver the whole song, or a good part of it. Not just 20 or so seconds. Sometimes I have listened to a snippet and not even got to the words.
  

There are some pluses - such as there being a downloader for linux (java based), the website being clean and simple to use, and the id3 tags being clean (artist, album, year, genre, BUT no cover).

Personally I think they should make a minor change to their business model. I pay $10 for 30 songs per month. Instead of limiting me to 30 songs, if I go over 30, immediately start another "month" (another 30 songs, another $10). That is, I can download as much as I like, and its about 33c each for each block of 30. With a min of $10 per month. If I commit to one of their higher plans, I can buy songs at a cheaper rate.

That would dramatically increase revenue as I am sure a lot of people like to buy albums, but keep hitting the 30 songs per month limit. They'd cycle "months" much more quickly. However it could reduce profit as people are less likely to fail to download their limit (Think: their best result is when I download nothing in a month).

Anyway, just my $0.02c worth.

Summary

For those too lazy to RTFA, here's the verdict:

Not Too Shabby -- Amazon MP3 is the first online music store that hasn't left me cold. Its advantages are very real:

        * No DRM. No consumer likes DRM, and although Apple hasn't yet released any statistics on how the DRM-free tracks from EMI have sold in comparison with the DRM-encumbered versions of the same tracks, Amazon has done the right thing by eliminating it across the board. Hopefully Amazon's move will give Apple some leverage with the music labels to make more DRM-free tracks available.

        * iPod compatibility. Thanks to the lack of DRM, and in particular, Windows-specific DRM, songs purchased from Amazon MP3 will play on an iPod, something that has never been true for a mainstream online music retailer (other than Apple) before.

        * Low prices. I don't have a sense for how price-conscious the online music market really is, but with many tracks priced below even the cost of Apple's DRM-encumbered tracks, and albums priced even lower, I could see budget-driven consumers or those who buy a lot of music preferring to purchase from Amazon MP3 over the iTunes Store.

        * 1-Click shopping. People do not like creating new accounts for shopping, but there's no question that some people shop from Amazon over other venues purely because it's such a known quantity after years of easy ordering. Ordering via Amazon MP3 isn't as easy as from the iTunes Store, but it's not far off.

I'd rather go Amazon

I prefer Amazon because I will not touch DRMed music, tied to a platform even with a 10 foot pole!

iTunes Plus DRM free...

iTunes Plus is DRM free. However, it's unknown how many titles actually are offering using it (only EMI still and not all those titles) and the price is a little higher. The quality of a 256k AAC encode vs. a 256k MP# Amazon encode may be somewhat different, but at those bitrates it's probably basically indistinguishable.

Sometimes though buying it from the iTunes store is simply more convenient... but I sure wish they'd hurry and expand iTunes Plus.

Finally

I used to say "If I could purchase a track for a buck i'd buy more music, because then I wouldn't have to buy 10 or so other crappy songs with it on an album" Then the itunes store came around -- then i realized i couldn't easily transfer songs to my non-apple mp3 player

i think now i WILL actually buy some music in digital form --- kudos to amazon

Amazon needs to add easy sorting

It would be really useful if I could click on "Song Title", "Artist", and "Album" to sort according to them. If I search for "Oasis", there's no easy to way to separate the albums titled that from the artist.

Re:Amazon needs to add easy sorting

"If I search for "Oasis", there's no easy to way to separate the albums titled that from the artist."

Amazon would be doing you a favor if they returned results to another artist.

How about adding Spiralfrog & imeem

Might be interesting to compare itunes vs amazon vs imeem vs spiralfrog - imeem.com [imeem.com] and spirafrog are both free music services supported by advertising. imeem is a little like youtube but it has become more music orientated and allows users to listen to CD quality music on demand via a flash based player, they've signed sony,bmg and warner brothers on top of the usual mess of indie labels and whatever the users have uploaded. Spiralfrog allows downloads and has universal as their biggest label, but the downloads are DRM encapsulated windows media files which can be copied to mp3 players but not burned to CD, spiralfrog requires a special Active-X plugin so its windows + IE only. I wonder whether the average user will tolerate the restrictions in exchange for being free, or if they'll just stick with p2p downloads instead?

Redundant?

The fact that it's called "Amazon MP3" and then to tag it "not flac" and "not lossless" seems rather redundant don't you think? Obviously mp3 is not flac, and everyone already knows mp3 is a lossy format.

Re:Redundant?

The point is they're trying to tag it "my piracy is still justified."

Amazon fails the random song comparison test

Song            Artist        Amazon  ITMS
Genius of Love  Tom Tom Club  No      Yes

Re:Amazon fails the random song comparison test

I have been looking at all the stores and they fail with most of the music I want, but then again so does the walk-in stores, even allofmp3 doesn't carry the stuff I'm looking for.

(Norwegian eurodance circa 1995-2005 is impossible to get)

Text of article

I got a login/password pop-up when I tried to read the head-to-head comparison. Here's the text from a mirror in the event anyone else sees the same.

***
Entertainment | 25 Sep 2007 | Recommend?
Amazon MP3 Takes on the iTunes Store

by Adam C. Engst

Amazon.com has launched a public beta of Amazon MP3, a digital music store that provides DRM-free downloads of over 2 million songs from 180,000 artists and 20,000 labels. In comparison, Apple says the iTunes Store now contains over 6 million songs.

According to Amazon's press release, most of Amazon MP3's songs are priced between $0.89 and $0.99, with more than 1 million songs in the current catalog available at $0.89, a full $0.40 less than Apple's iTunes Plus songs. Most albums in Amazon MP3 are priced between $5.99 and $9.99, again a bit cheaper than albums in the iTunes Store, which generally check in at $9.99.

All songs in Amazon MP3 are encoded at 256 Kbps, which is comparable to iTunes Plus songs, although in theory, the iTunes Plus AAC format could provide better quality than the MP3 format used by Amazon. Because Amazon is using MP3 and avoiding DRM entirely, songs purchased from Amazon MP3 are playable on any device, including the iPhone and iPods, along with Macs, PCs, and music players from other manufacturers.

Individual tracks can be purchased directly from a Web page, but to buy an album, you must first download and install the Amazon MP3 Downloader, available for both Mac OS X and Windows (a 615K download for the Mac version).

In my testing, the Amazon MP3 Downloader worked acceptably, but it was a distinctly clumsier experience than purchasing from iTunes. Clicking a Buy button on the Amazon Web site downloaded a document to my Desktop. I believe the Amazon MP3 Downloader was supposed to open it and download the actual song, but I had to double-click the file manually, likely because Amazon wasn't expecting that I'd be using a browser other than Safari (I generally rely on OmniWeb). Once opened in Amazon MP3 Downloader, the song was downloaded to an Amazon MP3 folder in the Music folder and then sent over to iTunes, which, at least on my machine, means that it was duplicated, since I keep my iTunes Music folder on a server for shared usage.

Songs I purchased were encoded at between 208 Kbps and 256 Kbps using variable bit-rate (VBR) encoding, and the free sample song was encoded at 280 Kbps VBR. Sound quality was certainly fine to my ears, though I'm no audio connoisseur. The metadata was complete and album artwork was either included or picked up automatically by iTunes.

Not Too Shabby -- Amazon MP3 is the first online music store that hasn't left me cold. Its advantages are very real:

* No DRM. No consumer likes DRM, and although Apple hasn't yet released any statistics on how the DRM-free tracks from EMI have sold in comparison with the DRM-encumbered versions of the same tracks, Amazon has done the right thing by eliminating it across the board. Hopefully Amazon's move will give Apple some leverage with the music labels to make more DRM-free tracks available.
* iPod compatibility. Thanks to the lack of DRM, and in particular, Windows-specific DRM, songs purchased from Amazon MP3 will play on an iPod, something that has never been true for a mainstream online music retailer (other than Apple) before.
* Low prices. I don't have a sense for how price-conscious the online music market really is, but with many tracks priced below even the cost of Apple's DRM-encumbered tracks, and albums priced even lower, I could see budget-driven consumers or those who buy a lot of music preferring to purchase from Amazon MP3 over the iTunes Store.
* 1-Click shopping. People do not like creating new accounts for shopping, but there's no question that some people shop from Amazon over other venues purely because it's such a known quantity after years of easy ordering. Ordering

The way the question is framed misses the point

Amazon MP3 vs. iTunes? If you're one of the - well, one of the ones who filled up your 10,000 song capacity Ipod (or even a small fraction of that) from either of these sources then this may be an important topic for you.

But if you're like the vast majority of Ipod owners, you'll continue ripping CDs and loading MP3s from your "library" as you've been doing all along. On the occasions when you need to own one particular tune right now, it doesn't matter if it's 69 cents or 1.29; what matters is that it's in the catalog of the store you're shopping at. That's never easy to tell with Amazon; they've got a bad habit of putting EVERYTHING in their catalog and taking orders for it - regardless of whether they've actually got the item to sell or can even obtain it.

Personally, I gave up on Amazon after they left me on "backorder" status on a book order for a couple of months before I found out from other sources that the book was out of print. I finally got the book from Ebay for half of what Amazon wanted to sell it for - if they'd had any to sell.

Apple? Say what you will about them, but I've never been left feeling misused after dealing with them. What you get is what it says on the box; no "smoke and mirrors" like Amazon. But neither of them is getting any money from me this month (or next month either). I'll continue to buy CDs at deep discount and load those into Itunes.

Increases leverage of record companies, not Apple

There is one area where the author misses the underlying strategic implications of the recording industry's willingness to sell DRM-free songs through amazon.

" No DRM. No consumer likes DRM, and although Apple hasn't yet released any statistics on how the DRM-free tracks from EMI have sold in comparison with the DRM-encumbered versions of the same tracks, Amazon has done the right thing by eliminating it across the board. Hopefully Amazon's move will give Apple some leverage with the music labels to make more DRM-free tracks available."

He's got it backwards. This deal gives the record companies a strategic advantage in its pricing battle with Apple. Allowing Amazon to sell DRM-free songs but variably-priced would be best interpreted as the record companies giving Steve Jobs the finger. Only one of the major record companies has allowed Apple to sell DRM-free songs and then only at a premium price.

Of the battling parties, it is the record companies who have gained leverage with this move, not Apple. The message to Apple is clear: allow variable pricing and we'll let you sell DRM-free tracks. Keep insisting on fixed pricing and we'll only let you sell DRMed tracks.

I'd like to try Amazon

However, they lock out Linux users. While I can apparently buy indivual songs, I can't buy an album without using their downloader which is Windows/OS X only. I don't feel like booting into OS X just to download some mp3s.

For now I'll stick to eMusic and DownloadPunk (albums are downloaded as a zip).

Re:I'd like to try Amazon

They also lock out OS/2 users, VMS users and OS/400 users. And so does iTunes.

Re:I'd like to try Amazon

Oh come on now.

1. They are working on a Linux version of the downloader [amazon.com] as we speak.
2. In the meantime, reports are that the Windows version of the downloader runs fine under Wine. And the only thing you need the downloader for is for full albums, Linux users can buy singles today straight from their browser, no downloader required.

With this offering, Amazon has done more to make Linux a first-class citizen in the online music space than maybe any other company to date. That's hardly "lock[ing] out Linux users."

Amazon Problems

- Proprietary downloader required for albums (Why, oh why? I refuse to install crap like this that serves no necessary purpose.)
- Downloading of singles without the proprietary downloader can take ages (20 minutes for a 5MB song) or fail completely
- No sorting options on many screens, just like the rest of Amazon. At least clicking on an artist gets you that artist's music, unlike clicking on an author when looking at books, which only gets you a text search of the author's name (still amazed at the lameness of that)
- No shopping cart. WTF? Each song must be purchased individually. It's amazing how crappy these music stores start out. The bar is so insanely low.
- No media library for re-downloading. Come on people, join the new millennium. Why not make it possible forever, and only limit the number of redownloads in a given time period if you are worried about bandwidth? Where did customer service go? Not to mention this would bring consumer eyes back again and again... why run away from this opportunity?
- Lousy track naming. Decent meta information but the files are named {track #} - {track name}.mp3. Track number is meaningless without the context of the album. Why not name them {artist} - {track name}.mp3 so the are comprehensible in a directory listing?

Tip: If you record the download URL, you'll find that you can actually use it multiple times. Great for when something goes wrong with the first attempt. For some reason, Amazon can't figure out how to serve these files worth a damn. Fortunately they didn't bother to actually enforce the "one download" policy. Not sure how long it hangs around.

What About Album Artwork?

Try as I might, I have been unable to determine if Amazon's MP3's include any kind of album art. The details on the web site are rather vague tech specs etc. Since I don't buy *any* downloadable music (only CDs) and no article or review I have seen addresses this point, I have yet to find an answer to this question.

So to you adventurous folks with 89 cents, does Amazon include cover art?

PS

I also, I have to say that it amazes me that people don't know 1.) that AAC is open and standard, not proprietary 2.) that the iTMS has been on the forefront of offering legal DRM free downloadable music (sold more than anyone else.) and 3.) that it's the music publishers, not Apple who insist on the DRM.

Waiting for google to join the party

So how long do people think it is for Google to start a music downloading service? Lets me see...

a)Bandwidth , check
b)Storage capacity, check
c)Revenue stream, check ( subscription / adds )
d)Search, check
e)Marketing, check
f)...
h)Profit! (I'm sincerely sorry, but it didn't feel right to leave it out.)

Question is if they will write it themself or if they are waiting for somebody else to do the hard work so they can buy it.

DRM free? Not quite...

Notice that you still have to use their special program to download full albums. That leaves out the (semi) vocal Linux and BSD crowds out in the cold.

They say DRM is bad...

They say DRM is bad for the consumer, but this is one point where it's actually working in the consumer's favor.

Apple controls the iTMS DRM. The iTMS DRM is the only DRM supported on the iPod. Having your music store work on an iPod is critical. Since working on iPods is critical to the success of any music store right now, there is only one option to sell digitally outside the iTMS and do that - no DRM. Apple's control has left the labels no choice. We would not