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Hot on the Web

iTunes, Amazon get creative

This column originally ran in ComputorEdge on December 14, 2007
(Issue 2550, A Little Goes a Long Way)

With pre-Christmas online sales of all sorts continuing to surge each year compared to the last, and with more folks likely to receive digital music this year than something physical like a CD (although I'm still holding out hope for an LP or two under the tree), both and Apple are getting creative at making it easier to buy digital music.

Apple and Amazon are likely the top two music retailers in the entire world – Apple with its industry-standard iTunes integrated environment (both a music player for your Mac or PC, and an online music store you can shop from within the player) and by selling music CDs and DVDs from its Web site.

And both have tried poaching into other turf – Apple by getting its iTunes gift cards put in grocery, book and department stores, and Amazon by licensing digital rights to sell songs and albums as downloadable MP3s.

Amazon's end run

While buying music from the iTunes store (or using Windows Media Player and the Urge/Rhapsody store) is fairly seamless, buying music elsewhere has tended to be a pain. Buy a song within iTunes or Windows Media Player, and it's simply there to be played when you're done.

But buy it somewhere else (or download a free MP3 from MySpace) and first you have to download the MP3, then go into Windows Media Player or iTunes and add the song.

Who wants to go through all that?

So has now launched Amazon MP3, a standalone browser plugin that allows you to buy individual songs or entire albums in MP3 format and have them automatically added to your iTunes and/or Windows Media Player library.

On release, offered a free trial download – the song "Thick as Thieves" by Dashboard Confessional. I first had to download and install the Amazon MP3 software (very quick download), then "bought" my free song, downloaded it – and it worked perfectly.

An added bonus is that Amazon's MP3s are DRM-free – meaning there's no digital rights management to cripple the song. It's a plain, bare MP3: Once you buy it, it's yours to do with as you please. Burn a copy to CD for your car, add it to your cell phone and MP3 player – no worries.

Amazon is claiming that more than half its songs cost only 89 cents – undercutting Apple's per-song price by a dime. (And the songs that aren't 89 cents all seem to match iTunes' 99 cents price; at least, in looking at several hundred songs on Amazon, I didn't see any that cost more.)

While Apple is negotiating with the labels to get more songs out on DRM-free MP3 format, is already offering it on all of its downloads. True, it doesn't offer nearly as broad a selection Apple's iTunes Store has yet, but they've had a consistent model right from the start.

Apple's hip factor

While Apple doesn't sell any music at retail, it does sell a ton of iTunes gift cards at retail. For Apple, even though it has to pay the retail outlets a cut for each card it sells (cutting into its profits) a certain percentage of cards will never be redeemed - pure profit, right there. (Why do you think retail outlets love gift certificates and cards so much?)

And by having iTunes cards in highly visible locations each time you go shopping (and, yes, Apple is paying through the nose for those highly desirable end cap spots), Apple is quietly marketing itself even as it builds its customer base.

But after awhile, even iTunes might lose some of its cool factor.

So this holiday season, Apple is selling new, themed iTunes "Essentials" gift cards – bigger and splashier looking than the regular iTunes gift cards, and with a nice price savings as well.

For $19, you can download 30 songs – a savings of $11. The catch is, the cards might be themed for holiday music or '80s dance music or Tori Amos; your 30 songs have to come from songs in that vein.

Still, you're likely to find several thousands of songs in any of the themes Apple is offering cards for, so your gift recipient isn't likely tofeel constrained – and will actually be happy to get 10 more songs than they might otherwise have gotten.

And Apple is also offering iTunes TV Essentials cards – where you can download 20 videos or episodes for $30 (again, a savings of $10 over the usual $1.99 per download).

Happy shopping.