Amazon MP3 Store: Potential Apple iTunes Destroyer?

Only 3 months after its launch, Amazon.com’s new MP3 Store is already the 3^rd largest digital retailer in the U.S., right under iTunes (#1) and Emusic (#2). This rank is an incredible achievement, but may leave some wondering what all the buzz about and how Amazon has achieved such quick success. Here’s a simple break down of why buyers are loving Amazon MP3 Store and why Amazon poses as a huge competitive threat to the top dog of the digital download industry.

Catalogs and Price

Amazon MP3 Store features over 2 million songs with catalogs from major labels such as Universal and EMI, along with over 200,000 independent labels. The mp3 tracks are high-quality, encoded at 256 kbps DRM-free and sold for as little as 89 cents, or less if if they are offering specials or free downloads.

In comparison iTunes has triple Amazon’s music stock, offering 6 million songs. However, their tracks are lower-quality at 128 kbps in AAC format priced 99 cents Fairplay DRM and, a smaller selection of DRM-free songs going for $1.29.

**OK TIMEOUT! If you aren’t computer-literate you may be wondering right now “What is DRM and what about DRM-free is making Amazon successful?”

DRM is an acronym for Digital Rights Management, a technique that restricts the free use and transfer of digital content. In short that means the music is controlled and restricts how people can install, listen to, view and duplicate their music files. Limites access and absolutely no sharing with DRM files**

Score: Amazon = 1

Full Length Albums

Amazon allows downloads of full-length albums with a price range of $4.99- $8.99. Right now some of their top downloaded albums include American Gangster by Jay-Z, Alive 2007 by Daft Punk, Sawdust by The Killers. Amazon.com also offers thousands of other full-length albums to choose from.

iTunes, on the other hand, does NOT support the download of full-length albums so they are not available here.

Score: Amazon = +2

Customer Loyalty

Amazon already has a large following of loyal customers. It was founded in 1995 and since then has netted nearly $200 billion, over $10 billion per year, in merchandise sales. Amazon's campaign for MP3 is easy to market because their millions of customers already know and trust their business.

iTunes is relatively new, founded in 2001. It hasn’t yet generated as large a base of customers as Amazon.

Score: N/A

Pepsi Leaves iTunes, Partners with Amazon

Pepsi and Amazon have partnered up to give away a 1 billion free MP3’s beginning February 3, a.k.a. Superbowl Sunday. Pepsi will ship out 5 billion bottles which will be marked with codes for free mp3s to be redeemed at the Amazon MP3 Store, a deal they previously have had with iTunes.

Score: Amazon= 5 billion ads and 1 billion customers!

So, which music store are you currently shopping at? Between Amazon and iTunes which is likely to be deemed crowd-favorite of the online music industry over the next year or so? I’m willing to put my money on Amazon.

Want to see first hand what all of the buzz is about? Click below to browse Amazon MP3 Store