DRM-Free Downloads Helped Make Amazon #2

iTunes Is Still The Top Dog

The music industry is finally comfortable selling digital music without copy protection, but the huge shift hasn't resulted in dramatically higher sales, writes USA TODAY. Instead, it produced something that major music labels have long sought: a strong No. 2 competitor to APPLE.

AMAZON's mp3 store, which sells only songs without copy protection, has quietly become #2 in digital sales since opening nearly six months ago. That's even though APPLE dominates digital music with its iTUNES store (the second-largest music retailer in the world, after WAL-MART) and its hugely popular iPOD.

WMG, SONY/BMG and UMG all opted to sell their DRM-free music on AMAZON. "The labels think APPLE has too much influence," says PHIL LEIGH, an analyst at INSIDE DIGITAL MEDIA. APPLE now has two million songs from EMI and independent labels available without DRM, out of its 6 million-song catalog. AMAZON offers 4.5 million DRM-free songs.

AMAZON's arrival "removed some of the stranglehold ITUNES had on the market," says former EMI MUSIC executive and Managing Partner of the TAG STRATEGIC consulting firm TED COHEN.

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