Crave

(Credit: Rhapsody)

Watch out, AmazonMP3: Rhapsody just joined the DRM-free MP3 club. The music-subscription service's new MP3 store sells individual tracks for 99 cents and albums for $9.99. And if you're one of the first 100,000 folks to create an account by July 4, you can get a free album.

Strings? You do have to provide a credit card when you set up your account, and you have to install Rhapsody's MP3 Download Manager (Windows only), which can automatically add downloaded songs to your iTunes library. With that done, you'll immediately find a $10 credit in your account. (Note: You have to use it before July 4.)

As with AmazonMP3, Rhapsody's MP3s come free of copy protection, meaning you can use them with iPods and every other player on the planet. However, Rhapsody lets you preview full tracks before purchasing, whereas AmazonMP3 limits you to 30-second snippets. However, Amazon definitely has the edge in pricing, with many tracks and albums selling for $0.89 and $8.99, respectively (to say nothing of some sweet daily deals).

Of course, a free album is a free album, so hurry to Rhapsody and grab an account. You've got absolutely nothing to lose--and Brendan Benson's awesome Alternative to Love to gain. (What can I say, I'm a fan.)

(Credit: Amazon)

I've gushed before about AmazonMP3, the online music store that sells DRM-free MP3s at reasonable prices. Head there today and you can get The Police's Synchronicity--not just the song, but the complete album--for only $1.99. Head there tomorrow and you'll find another album on sale for around the same price. Wowza.

This "MP3 Daily Deal" is a new thing at AmazonMP3. Lest you think it's a clearinghouse for crummy albums no one wants, I give you Exhibit A: Synchronicity (arguably The Police's best album). Exhibit B: Coldplay's Parachutes (one of last week's deals). Exhibit C: The Shins' Wincing the Night Away (which was $3.99, still a killer deal).

Prices notwithstanding, the big draw of AmazonMP3 is right in the name: MP3. No DRM-soiled AAC or WMA files here--just universally compatible MP3s. If you're an iPod user, the AmazonMP3 download client can automatically add new purchases to your iTunes library, ready for syncing. Which begs the question: Is anyone still buying music from iTunes? Unless you can give me a good reason why, I may have to kick you out of the Cheapskate club. (Oh, who am I kidding... I would never kick anyone out of a club that would have me as a member.)

It's too bad AmazonMP3 doesn't have an RSS feed for the MP3 Daily Deal (meaning you have to visit the site every day to see what's on sale), but there is a Twitter feed. (Look, Twitter is finally useful for something!)

Amazon released a new MP3 Clips Widget today that lets you build playlists with 30-second samples from any of the 5 million+ songs on Amazon's MP3 store, then embed those playlists in any Web page. The process is brain-dead simple: first you run a search of song titles or album titles against Amazon's database, then select from the results. Second, choose the size of the widget. Third, select from a list of 15 popular blogging and personal home page sites (Blogger, Yahoo 360, and so on), or paste the code directly into your page, as I've done below.

Of course, every sample contains a link back to Amazon's store--this is commerce, after all--and Amazon encourages you to become an affiliate to earn money when people click through and make a purchase. (No, I'm not an affiliate, so don't worry about my making money from the widget on this page.) Amazon also lets you post information that's more obviously promotional, such as a list of recent purchases at Amazon, or Amazon MP3 bestsellers in a particular genre. Still, this is a quick and useful way to post music, such as songs running through your head as you're blogging or clever topically relevant music.

It's a full hand of cards for Amazon: the Web's mega-retailer announced Thursday that it will be selling music from Sony BMG Music Entertainment in its Amazon MP3 store. This means that Amazon MP3, which only sells "naked" tracks without any digital rights management (DRM) protection, now has deals with all four major music labels. Because of the lack of copy protection, any song from Amazon MP3 can play on virtually any media-playing device, from PCs to music players to cell phones and PDAs.

The DRM-free songs from Sony BMG will be available for purchase on Amazon MP3 later this month.

Sony BMG announced earlier this week its intent to drop DRM from its music, making it the last major label to do so. Amazon MP3, which launched in September, already sells music from the other three major labels--EMI, the Vivendi-owned Universal Music Group, and Warner Music Group--as well as over 33,000 independent labels. Currently, there are 3.1 million songs for purchase.

A full catalog of DRM-free music files means that Amazon is legitimately poised to take on Apple's iTunes Store, the industry leader by far in digital music sales. Most of Amazon's songs, which range largely from 89 to 99 cents, outprice Apple's 99-cent standard. And as the result of disagreements with Apple, Universal Music Group has not licensed its DRM-free catalog to the iTunes Store.

In the meantime, Apple dropped the prices of its DRM-free songs from a premium $1.29 to the regular 99 cents, a sign that it was starting to feel the pressure from Amazon.

Amazon doesn't yet have the market share to start boasting, but it finally has the upper hand in a culture that has increasingly turned against digital rights management. User experience reviews of Amazon MP3 have been mixed, but there's little doubt that this poses the most formidable threat to the iTunes monopoly yet.

Two interesting pieces of news highlight the trouble online stores will face as the price of legal song downloads approaches the price of illegal downloads (which is zero).

On Monday, Amazon.com announced an extremely generous revenue-sharing program for affiliate sites to resell MP3s from the Amazon MP3 store. Amazon will give them 20 percent of the revenue from all sales until January 1, 2008, after which it will drop to 10 percent. Since Amazon sells some downloads for as low as 89 cents, this means it'll have only 71 cents left to pay to the copyright owners. I don't know exactly what the wholesale price of these per-song downloads is, but I expect that Amazon will barely break even, and perhaps lose money, on this deal.

The same day, Ars Technica reported a rumor that Apple was planning to drop prices on iTunes Plus songs to 99 cents, the same price as all other songs on the service. Like Amazon's MP3s, these files have no DRM, meaning they can be played on any computer or device that's capable of playing AAC files. (Amazon's MP3s are more broadly compatible--for instance, many Windows Media-based MP3 players can't play AAC files.) On Tuesday, Steve Jobs confirmed the rumor to The Wall Street Journal shortly thereafter. I don't think EMI's charging Apple more for the DRM-less files than the other labels are charging for their content, but the price drop suggests that Apple's feeling the competition from Amazon.

Prices will probably continue to drop until the retailers have no margin left. In other words, to make a business out of selling digital music, you have to have an attached product that's actually profitable. In Apple's case, it's hardware. In Amazon's case, they must be hoping it draws users to the site, where they eventually will buy other products. That's been Amazon's strategy from day one--I used to work in a bookstore, and retailers' margins on books are exceptionally low relative to the retail price of the book. I remember wondering how the heck Amazon was going to turn online bookselling into a viable business, but of course they have with massive scale and significant attach of other products.

(Credit: Amazon)

It's been a busy week in digital music, to say the least. Today Zune 2 was announced, and Amazon finally launched its MP3 download service, though it's currently still in Beta.

I gave it a short try and found that overall it is a competent start. It's not a significant step beyond iTunes in terms of functionality or usability (more on that in a moment), though it's price/quality ratio is very good: 89-99 cents for 256kbps bit rate, DRM-free MP3s. Albums vary a lot in price, from a bit over $4 to $8.99 so far as I can tell. This is a good deal if, like me, you prefer a higher bitrate than iTunes has historically offered and you don't use an iPod as your main device. (I use a SonyEricsson W810 Walkman phone as my main device. I've had three hard-drive based iPods go south on me so I'm reluctant to get another, and I just like carrying one less device around. Plus it has a radio and I'm an NPR junkie.)

So what does the Amazon MP3 store do well and not so well?

Pro's:

• It automatically puts stuff into iTunes for you if you use the Amazon downloader application. Tracks seem to be kept outside of the iTunes folder hierarchy. I actually like this as it means it's easy to find the unprotected tracks to put onto my Walkman phone.

  Track previews are of standard 30sec length with good fidelity, and fade in and out. Nice that you can preview a whole album at once (it moves automatically from on track to the next). Very responsive action of the previews.
  

• The recommendations seem good and on-target so far from my limited experience. As it should it taps into CDs that I've bought in the past so it's not just relying on my short mp3 buying history.
  
• The functionality and interface are much simpler than the iTunes Music Store, which in my mind is a plus. The iTMS has become very cluttered as more media types have got loaded on.
  
• Album art is downloaded too, and shows up correctly in iTunes.

Cons:

• I got separate emails for each track or album purchase--why can't I get a summarized report of a session like iTunes gives me?
  
• The process for buying individual tracks is cumbersome. 1. Hit buy button. 2. Get taken to a confirmation page. 3. Hit "Back" button on browser to go back to the previous page and pick another track. They need some AJAX goodness to make this more efficient, and need to allow non-contiguous selection of multiple tracks to buy them all in one go.
  
• To make the process most efficient you have to first install the small Amazon Downloader. This worked OK in Safari, however in Camino the tracks didn't automatically start downloading for me, I had to double-click the icon in the Camino download window to kickstart the Amazon Downloader. Once going the UI was decent enough and integration with iTunes was flawless.
  
• The look of the store is Amazon standard, which IMHO is utilitarian but not very attractive. Music is treated like everything else on Amazon, whether you're spending a lot or a little.
  
• When I do a search and get dozens of results back, I can't sort by album, song title, artist, etc. This can make it pretty hard to find a specific song.
  
• Strangely they are not pulling in user reviews from the CDs of the same albums. Hopefully this will change as it makes no sense to have a separate stock of reviews for MP3s.
  
• Music selection is pretty slim right now. Even though 2 million songs sounds like a lot, you quickly realize it isn't. Do a search on U2, for example, and you get a bunch of covers, but nothing original. Amazon has both EMI and Universal and it claims thousands of other labels, but there are obvious large gaps. Presumably this will fill in over time. But for comparison, remember that the iTunes Music store launched with only 200,000 songs and itt took quite a long time to feel like it wasn't plagued with gaps, and given the current state of maturity of the market Amazon should be able to fill it much faster.

The two biggest question marks in my mind about whether Amazon will be successful with this venture are:

1. Will they actually continue to put effort behind it? Lately Amazon has been in serious fast-follower mode, and throwing in every gee-gaw and feature that seems to be popular elsewhere. You like wiki's? We got 'em! Carousel navigation for no obvious reason? Check! You can almost imagine Amazon as an extension of Jeff Bezos' short attention span. To be successful in this area they are going to have to stick with it, which is going to require effort and deal-making that Amazon doesn't typically do.

2. Can they pull together the strengths of their customer network and massive mine of data, and then layer game-changing functionality on top of it? A me-too entry is not going to be enough to make a major dent in Apple's dominance. Leveraging their strengths is a good start for Amazon, but I'm more sanguine about whether they can get beyond their current fast-follower approach to really do something fresh and attention-grabbing.

(Cnet blogger Michael Horowitz also has a review of the service. Unlike him I had to confirm my login info before being able to make a song purchase.)

Remember when Amazon.com was just a bookstore? On Tuesday morning, the online retailer launched the public beta of its much-anticipated rival to Apple's iTunes Store: Amazon MP3, which features over 2 million songs free of digital rights management copy protection, which means they'll play on any computer, music player, or music-enabled cell phone.

Because of Amazon MP3's DRM-free focus, that means the selection isn't as wide as the iTunes Store's. Several major-label conglomerates, like Sony BMG and Warner Music Group, have not jumped onto the bandwagon and hence aren't offering their music for sale in Amazon's new store. Nevertheless, the retail giant has played up the fact that there are still 180,000 artists represented from 20,000 major and independent labels, including several prominent indie labels that are offering their music for the first time in "naked" format.

Each song is encoded at 256kbps, the file quality that Apple offers for its DRM-free iTunes Plus premium music selections, which it sells for $1.29 apiece rather than its usual 99 cents. Amazon's pricing for Amazon MP3 ranges from 89 cents (including the top 100 best-selling songs) to 99 cents; albums are priced from $5.99 to $9.99.

It goes without saying that Amazon is aiming squarely at Apple, and it's attempting to hit the digital music monopoly where it hurts--with regard to pricing, file quality, and versatility, all of which have come under scrutiny by critics. But this could also be a painful blow for eMusic, the online music store that has made a small name for itself by selling exclusively DRM-free music.

While the iTunes Store started its digital download empire with music sales, Amazon has already operated a movie download store, Amazon Unbox, for a year now. Unbox was off to a rough start at first, but tweaked features, partnerships with companies like TiVo, and a solid selection have improved the company's reputation for media downloads.