The new Amazon MP3 webstore claims “Earth’s biggest collection of a la carte MP3 downloads”. Has iTunes had its day?

Internet retail giant Amazon.com has become the latest player in the lucrative music download market to attack Apple’s dominance but unlike those before it, Amazon.com looks to have the best chance of taking it to iTunes retailer.

The launch of Amazon MP3 with its cache of over two million DRM-free MP3 downloads, many priced at just $US0.89 each, will likely be giving Apple executives heartburn over the coming weeks.

Amazon’s catalog is said to cover more than 180,000 artists from over 20,000 major and independent record labels.

While Apple’s basic iTunes service features digital rights management encrypted AAC (advanced audio codec) downloads encoded at 128kilobits per second (128Kbps), Amazon has chosen the DRM-free MP3 format encoded at 256Kbps and although each song will be double the download size compared to iTunes’ offering, the MP3 audio quality is likely to be higher given the different in audio bit rates between the two.

"Amazon MP3 is an all-MP3, DRM-free catalog of a la carte music from major labels and independent labels, playable on any device, in high-quality audio, at low prices," said Bill Carr, Amazon.com Vice President for Digital Music. "This new digital music service has already been through an extensive private beta, and today we're excited to offer it to our customers as a fully functional public beta. We look forward to receiving feedback from our customers and using their input to refine the service."

According to Amazon, more than one million of its two million-plus song catalog will sell for just US89cents, including the top 100 selling songs. Most album downloads will sell for between $US5.99 and $US9.99.

The launch of Amazon MP3, even in what the company calls a “beta” release, will mark a serious change in the landscape of music downloads.

First, by pricing at just US89cents per song, it provides some serious competition against Apple’s US99cents per song price, giving consumers a serious alternative to the DRM-laden offerings of Apple.

Second, the end of digital rights management is now effectively in sight. DRM has only ever penalised consumers who do the right thing and has never really stopped those who seriously pedal stolen music. Even if Amazon MP3 is just moderately successful in taking market share from Apple, it cannot be long before iTunes is forced to follow suit and ditch its DRM encryption.

Third, because MP3 is basically the universal audio format, it opens up the download market to other hardware player manufacturers such as Toshiba, Creative and SanDisk. Not having AAC support won’t be as painful to portable music lovers because there is now a serious alternative to iTunes.

With an install base of more than 100million iPods, Apple won’t lose much in the way of market share immediately. It has a good product, easy to use web store and millions of loyal customers.

But it will need to address its use of DRM quickly if its not to start bleeding from a million tiny cuts as consumers take advantage of Amazon MP3, its lower prices and higher audio quality.