This is from CMU Daily, a daily email round-up and one of my favourite sources of info – this nib exposes PR at its worst with journalism as it should be… great stuff
PLAY.COM ENTER THE DOWNLOAD MARKET
Etailer Play.com yesterday announced it was launching a new UK download platform that will make music available in good old DRM-free MP3.
In fact, the press release called the new digital music service and its supply of music without digital rights management restrictions – which, of course, mean the tracks can be played on any digital music player, including the iPod – a “revolutionary new development”, adding: “Online retailer Play.com has today thrown down the gauntlet to the competition by becoming the first major UK retailer to offer digital tracks and albums without digital rights management meaning you can download tracks for your iPod and share that file between your MP3 devices without having to use iTunes”.
The key word in that quote is “major UK retailer”, because, on closer inspection, at launch PlayDigital will only stock music from EMI and the independents – the former having made its music available without DRM since last May, the latter having been selling music without DRM for years.
Clearly Play.com’s definition of “major UK retailer” discounts both iTunes and UK based 7Digital, who are already selling that catalogue without DRM, the latter as uber-compatible MP3s.
Although Play.com’s launch bumf positions itself as a serious competitor to iTunes, the PlayDigital service is probably more of a threat to the download platform being developed by Play’s existing competitor Amazon. The Amazon MP3 service is some way ahead of Play’s in that it has all four major record companies on board, though unlike PlayDigital there is currently no word on when Amazon downloads will launch in the UK. It may well be that by the point Amazon’s service reaches us Play.com will also have all four majors on board, and that’s when the competition is likely to really begin.
In fact the most interesting part of Play.com’s announcement yesterday, and the thing that could make that competition interesting, is PlayDigital’s price point. Play.com is renowned for low prices in the mail-order domain, and they are extending that concept to downloads. They will be selling MP3s for 65p a track or £4.95 an album. The iTunes standard price, of course, is 79p (whether there is DRM or not – at first DRM-free music was more expensive than that) while 7Digital seem to sell MP3s for 99p.
Play.com are not the first download service to undercut the standard 79 pence price point, with those download platforms that have dabbled in variable pricing often selling their lower-price tracks somewhat below that, while others have opted for a price in the 69p region. However, because the iTunes Music Store has been able to maintain its position in the market because, in the DRM-era, it was the only place selling iPod compatible major label music, attempts to beat Apple on price haven’t been successful in the past, and for sometime now the 79p price point has generally become standard across most major download stores. (The exception, of course, being the infamous Russia based AllofMP3.com which sold iPod compatible major label music for mere pennies until action by the labels all but closed it down).
However, if it is able to secure iPod compatible MP3 tracks from all four majors, then Play.com’s price war might, this time, actually work, and threaten both iTunes’ existing market dominance and Amazon’s potentially significant future market share. A price war will be interesting though, given how small the margins are on downloads, especially for the retailer – it will be interesting to see how low the download platforms will go price wise, and how quickly they start trying to persuade the record labels to cut the wholesale rates.