“The convenience of one-stop impulse shopping from their iTunes music player vastly outweighs the lower prices and DRM-less features of the Amazon store. Further, Apple itself sells DRM-free music and will increasingly benefit from Amazon’s negotiations for that format. So while that vocal minority of music purists who insist on DRM-free music may flock to Amazon’s new store, they will only be helping Apple maintain its music dominance with the vast majority iPod owners and music buyers,” Carl Howe writes for Blackfriars’ Marketing.
“Amazon’s new MP3 store is great for everyone, and it lends choice to the digital music business. But don’t make the mistake of thinking that Amazon’s music business threatens iTunes dominance. Amazon’s music business will simply will put pressure on music labels to reduce their cut of the digital music distribution pie (since Amazon is undercutting Apple in price and can’t do that indefinitely) while expanding choices for consumers,” Howe writes.
Howe writes, “Meanwhile, the vast majority of consumers will continue one-stop shopping for their music, movies and TV shows in Apple’s iTunes, preferring convenience over low-prices. Amazon will fight for the number two spot in digital downloads, while Apple’s iTunes business will dominate digital music downloads — and profits — for years to come.”
More in the full article, including estimates of Apple’s iTunes Store profits, here.