Joshua
11-18-2003, 12:24 PM
The already crowded market for digital-music services is going to
get a bit more crowded next year when industry giant Microsoft enters
the ring. Microsoft confirmed this week that it will join Apple
Computer, BuyMusic.com, MusicMatch/Dell, Napster, RealNetworks, and
other companies next year to offer its own service--tentatively called
the Microsoft Music Download Service--for streaming and downloading
music from the Internet. "We are excited to confirm that MSN will
deliver a download-music service next year, and we look forward to
sharing more details at a later time," said Lisa Gurry, an MSN group
product manager.
Currently, the market is divided into three types of digital-music
services: digital-music download services such as Apple's iTunes Music
Store, which loses money on every song sold; digital-music streaming
services such as RealNetworks' RHAPSODY service, which makes a healthy
per-subscriber profit; and services that offer both features, such as
Napster, which subsidizes the downloads with profits from streaming
subscribers. Currently, which tactic Microsoft plans to use is
unclear.
One fact is clear, however: Microsoft's entry into the
digital-music market will further strengthen the Windows Media Audio
(WMA) 9 format, which is used by all music services except the iTunes
Music Store, which uses the Advanced Audio Coding (AAC) format.
Microsoft already operates a music service in the UK called MSN Music
Club, which offers digital downloads of songs that users can burn to
CD; this service might be the impetus for a wider US-based service.
One advantage Microsoft will have over the competition is that the
company can afford to take a loss on the service until it irons out
the kinks, thanks to its $50 billion in liquid funds. Companies such
as Apple, MusicMatch, and Napster are working with dramatically fewer
resources. And although Apple touts the number of downloads it has
provided, the company is losing money on each download and hopes to
translate its iTunes Music Store overhead into iPod sales, a debatable
long-term strategy. At some point, portable media players will become
commodity items, and Apple won't be able to charge customers the high
prices it does now.
get a bit more crowded next year when industry giant Microsoft enters
the ring. Microsoft confirmed this week that it will join Apple
Computer, BuyMusic.com, MusicMatch/Dell, Napster, RealNetworks, and
other companies next year to offer its own service--tentatively called
the Microsoft Music Download Service--for streaming and downloading
music from the Internet. "We are excited to confirm that MSN will
deliver a download-music service next year, and we look forward to
sharing more details at a later time," said Lisa Gurry, an MSN group
product manager.
Currently, the market is divided into three types of digital-music
services: digital-music download services such as Apple's iTunes Music
Store, which loses money on every song sold; digital-music streaming
services such as RealNetworks' RHAPSODY service, which makes a healthy
per-subscriber profit; and services that offer both features, such as
Napster, which subsidizes the downloads with profits from streaming
subscribers. Currently, which tactic Microsoft plans to use is
unclear.
One fact is clear, however: Microsoft's entry into the
digital-music market will further strengthen the Windows Media Audio
(WMA) 9 format, which is used by all music services except the iTunes
Music Store, which uses the Advanced Audio Coding (AAC) format.
Microsoft already operates a music service in the UK called MSN Music
Club, which offers digital downloads of songs that users can burn to
CD; this service might be the impetus for a wider US-based service.
One advantage Microsoft will have over the competition is that the
company can afford to take a loss on the service until it irons out
the kinks, thanks to its $50 billion in liquid funds. Companies such
as Apple, MusicMatch, and Napster are working with dramatically fewer
resources. And although Apple touts the number of downloads it has
provided, the company is losing money on each download and hopes to
translate its iTunes Music Store overhead into iPod sales, a debatable
long-term strategy. At some point, portable media players will become
commodity items, and Apple won't be able to charge customers the high
prices it does now.