Amazon steps up digital music competition with Apple

SAN FRANCISCO Thu Jan 10, 2013 7:51pm IST

A zoomed illustration image of a man looking at a computer monitor showing the logo of Amazon is seen in Vienna November 26, 2012. REUTERS/Leonhard Foeger/Files

A zoomed illustration image of a man looking at a computer monitor showing the logo of Amazon is seen in Vienna November 26, 2012.

Credit: Reuters/Leonhard Foeger/Files

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SAN FRANCISCO (Reuters) - Amazon.com Inc (AMZN.O) unveiled a service that increases competition with Apple Inc's (AAPL.O) dominant iTunes store.

Amazon launched Amazon AutoRip, which gives customers free digital versions of music CDs they purchase from the world's largest Internet retailer.

The digital music files are automatically stored in customer libraries in remote datacenters run by Amazon, where they are available to play or download immediately through the company's Cloud Player service, the company said.

Amazon customers who have bought AutoRip-eligible CDs at any time since the company started selling discs in 1998 will also get digital versions of that music stored in their Cloud Player libraries for free, the company added.

More than 50,000 albums are available for AutoRip and Steve Boom, head of digital music at Amazon, said the company focused on music that has been the most popular among its customers during the past 15 years.

Albums include "21" by Adele; "Overexposed" by Maroon 5; "Dark Side of the Moon" by Pink Floyd and "Thriller" by Michael Jackson.

Boom declined to estimate how many CDs Amazon expects to digitize through the new service. However, he noted that the company has sold hundreds of millions of CDs to millions of customers.

"When we picked those 50,000 titles we focused on having a substantial majority of our physical CD sales covered," he added.

Amazon is hoping the new service boosts digital music sales and encourages more people to use its cloud music service.

"People will be exposed to Cloud Player and our digital music offering, which is a good thing," Boom said. "We want to take this global."

Amazon's MP3 digital music business has been around since 2007, but its market share is less than 15 percent, according to The NPD Group. Apple's iTunes store is the clear leader, with over 50 percent of the market.

Amazon is making a bigger push against iTunes now that the company's Kindle Fire tablets are in more consumers' hands and its Cloud Player music application is available on a range of other mobile devices, including Apple's iPhone, iPad and iPod Touch.

(Reporting By Alistair Barr; editing by Andrew Hay)

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