By launching a DRM-free MP3 store Amazon has fired the starting gun on a price war with other retailers. Most significantly it may affect Apple in the UK, but it will also affect startup retailers dealing in MP3s.
Ben Drury, CEO 7digital has come out with some some strong views on Amazon’s entry. He calls it “a little late”, although it was only on September 16th that 7digital went fully MP3. But the store is selling high quality 320kps, unlike Amazon’s which are at 256kps quality.
7digital may find that its business is adversely affected by Amazon, especially on price. Perhaps its emphasis on higher quality will help it find a niche? The startup is backed by Sutton Place Managers and Balderton Capital to the tune of $8.5m.
However, Amazon’s move will probably only help 7digital in its education of consumers away from iTunes. They say a rising tide lifts all boats.
Furthermore, the gradual acceptance of DRM-free music means the labels will be less in hock to Apple’s iTunes Fariplay DRM, even as they worry about MP3s spreading like wildfire. The Register has already found one outfit trawling Amazon’s stores with an MP3 harvester.