Lawrence Gee | Marketing, Internet, Creativity, Strategy

Why iTunes Should Be Worried

Yesterday, Amazon.com unveiled their new digital download service called amazonmp3.

Simply, this is great for consumers and troublesome for Apple.  The competition is great for the industry as it will create more incentives to be price competitive.  Consumers will benefit from lower prices, more promotions, and more innovation from both companies to keep or take away business from each other.

Amazon has positioned their product for success and it’ll be interesting to see Apple’s reaction. 

• Amazonmp3s can work with both iPods and other MP3s — will Apple finally succumb and allow iTunes music to be played on other non-Apple players?
• Amazonmp3s are DRM-free — this means that the files can be burned and transfers without restriction.  iTunes currently limits the number of times the file can be used and burned to CD.
• Amazonmp3 has 2 million songs right now - this is much less than the 6 million songs that iTunes currently has but record labels will be wise to negotiate deals with both companies.
• Amazon.com has a trustworthy name and the capital to keep this service going — unlike other failed mp3 sellers, Amazon has the money and branding to pull this off.  If purchasing music is as easy as iTunes, they can likely be a threat to Apple.

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