Will Apple Be Sauced?

Give Apple credit for taking the risk and proving the viability of a relatively user-friendly digital music store. Now will the world’s biggest butts squish Apple?

Microsoft Corp., Yahoo Inc., Amazon.com Inc. and AOL Time Warner Inc.’s America Online unit are among the companies expected to launch services to compete with Apple’s 6-week-old iTunes store, which charges 99 cents to download a song onto a personal computer. Viacom Inc.’s MTV, another popular Web destination, is also exploring a download venture, according to sources.

The arrival of these Internet heavyweights marks a dramatic shift for the five major record companies. For more than a year, they have unsuccessfully tried to thwart widespread piracy by drawing fans to their own Web music services. Now they are placing their hopes in established Internet companies with their built-in audience of tens of millions.

….”I think the whole thing is a revolution,” said Doug Morris, chairman of Vivendi Universal’s music operation, the world’s largest. “Yahoo has an enormous number of people coming through all the time. Amazon sells a ton of content. MTV certainly is an enormous bull’s-eye for people who like music. This is an amazing moment.”

….Music executives say Apple’s early success suggests that fans prefer systems that allow purchases of songs a la carte.

Microsoft has recently shown its version of a downloadable music store to executives at several record companies. Sources said Microsoft plans to give consumers more music-related information to guide their purchases than the iTunes Music Store does, and that its store might be accessible via Xbox game consoles as well as computers. Microsoft officials declined to comment.

….”What we’ve got now are the biggest minds in the business working on digital music sales and solutions,” Sony’s Lack said. “That is going to increasingly be the lead story in the digital world.” [LA Times]

Competition is good as long as it is allowed to work freely so that prices come down and flexibility goes up.