Industry Ponders Amazon Impact, iTunes Competitiveness

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As Amazon pushes closer towards its digital music store launch, the industry is weighing the potential competitive impact.

In May, the etailing giant pointed to an MP3-only store, and buy-in from EMI.  Since that point, Universal Music Group has also pushed into DRM-free downloads, though majors Sony BMG and Warner Music Group remain on the sidelines.  That spells exclusion from the Amazon play, which is pushing ahead without comprehensive major label participation.

Analysts have been tempted to frame the Amazon entry as a stab at the iTunes Store.  But according to sources to Digital Music News, Amazon is planning to incorporate its digital downloads into larger artist results sets, and skip a more complicated, stand-alone store.  That minimizes the importance of content gaps, and fits into dominant iPod+iTunes behaviors.

The next question surrounds broader a-la-carte sales volumes.  Amazon is a traffic giant, and its participation in the format could boost sales levels considerably.  That undoubtedly helps labels – or at least the ones participating – and strong sales could persuade protectionist labels to dip into DRM-free waters.

Story by news analyst Alexandra Osorio.