Report: Amazon now #2 digital music retailer

Amazon’s MP3 store has become the number two digital music retailer, according to USA Today. The newspaper’s report claims that much of Amazon’s success is attributable to cooperation from the four major record labels, all of which gave Amazon permission to sell their music without DRM, while some have denied Apple the same opportunity.

Apple has stated that it hoped to offer 50% of its catalog in DRM-free format by the end of last year, but failed to meet the number. “The labels think Apple has too much influence,” said Phil Leigh, an analyst at Inside Digital Media.

Ted Cohen, former EMI executive and managing partner of the Tag Strategic consulting firm, said Amazon’s store “removed some of the stranglehold iTunes had on the market.” iTunes currently offers 2 million songs available without DRM, according to the report, while Amazon offers roughly 4.5 million DRM-free tracks.

Despite the labels’ prior claims that DRM-free music sales would encourage piracy, the new offerings do not appear to be hurting online music sales, which are up 26% so far this year, according to Neilsen SoundScan.

Pete Baltaxe, director of digital music with Amazon, said “Songs sold without DRM, at high quality, with album art, that’s the best way to get people to buy music instead of stealing it.”

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