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eBay Explores Downloadable Music

eBay merchants could soon be following in the heels of Apple's iTunes Music Store and other digital music sellers, following the e-commerce marketplace's announcement this week that it plans to test ways for users to buy and sell downloadable products.

This week, the company unveiled a new Digital Downloads product subcategory within its Music product category, as part of a 180-day pilot program aimed at gauging whether such an offering could be feasible over the long term.

Unlike services like iTunes, eBay will handle only the online sales portion of the buying process. According to the company, sellers are required to oversee the secure downloading and digital rights management for the music they sell.

Consequently, during the checkout process after an auction or sale, the buyer is likely to be redirected to a seller's own branded and secure site to complete the transaction and receive their purchased music.

While no music is currently being offered in the new Digital Downloads subcategory, eBay said the pilot program has enlisted sellers that have already been vetted for certain criteria, such as copyright protections.

"They are the rights owner[s] or have contractual permission from the rights owner to resell the listed media," eBay said on its site.

It is not known how many sellers will be participating in the pilot program. Throughout the day today, a handful of auctions have appeared offering "Buy It Now" access to music, which would then be e-mailed to winners or made available through a secret URL. Those listings have since been pulled by press time, and no digital music is currently available in the category.

eBay said it ultimately could expand the category beyond its pre-approved roster of sellers, but only to other merchants who also meet standards of ensuring copyright protections, service level agreements, safety, and other criteria.

The move represents a tightly controlled effort by eBay to extend its marketplace to what's emerging as a potentially lucrative category of online selling -- digital music. Apple's iTunes store earlier this week announced that it has sold more than 100 million music tracks since the store's debut in late April, 2003.

For its part, eBay has not figured prominently in sales of digital goods. To date, the site has been strict about how it handles digital goods sales, and even after launching the pilot program, eBay's policies governing the products remain fairly stringent.

According to notices posted on its site, eBay prohibits sellers from listing items such as a copy of an application downloadable from a seller's Web site; music or video delivered through a peer-to-peer file-sharing community or network; a copy of a downloadable electronic book; a hidden URL where a high bidder can download freeware or shareware software.

eBay also said it reserves the right to terminate product listings that violate its policy on downloadable media.

Christopher Saunders is managing editor of eCommerce-Guide.com.

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