back to article Amazon flows into digital music sales

Online retailer Amazon looks set to take on Apple in the downloadable music market, with plans to launch its own iTunes rival. Reports claim Amazon is being tempted into the digital music market by EMI's agreement to sell tracks free from digital rights management (DRM) restrictions. The retailer is believed to be interested in …

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No MP3 files on iTunes

iTunes won't be using MP3 tracks, it'll be using DRM-free AAC files.

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Inflated online music prices

I am gald to see Amazon getting into the online music sale, but I told my wife long ago, I refuse to pay 99c for an online music item. The price needs to better reflect the true cost of production, marketing and delivery.

Think about this. There is an average of 15 songs on a cd. The store bought cd regularly sells for $15.00, which equates to 100c per song.

Now the store bought cd has greater expenses associated with it due to the following: cost to burn the cd, packaging, shipping, stocking, and inventory space, clerical). Assume that the cost for the overhead is 50% or 50c, then one would expect the online music item which has none of the overheads of the store bought cd to retail for abour 50c; half the price.

But I cannot see how an online music item can cost the same as the store bought cd.

So who is making out like a bandit?

And why should I make some fat cow fatter? Yes I know that online music selections allow the user to purchase only the ones needed, but looking at sheer cost of production and delivery, why must the online music item price be as high as the store bought cd?

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