Online retail heavyweight Buy.com on Wednesday confirmed plans to launch a paid download digital music service to piggyback on the success of Apple’s iTunes.
A spokesperson for the Aliso Viejo, Calif.-based Buy.com said the service would be branded iMusic and launch on July 22 with a massive promotional campaign in New York City’s Times Square.
A source familiar with the plans told internetnews.com Buy.com would use technology from Loudeye to power iMusic’s sale of individual music tracks.
The Loudeye Media Framework, built on Microsoft’s Windows Media 9 Series, is a plug-and-play option for third-party retailers looking to distribute copyright-protected content on the Internet.
Buy.com’s iMusic is being touted as the first a la carte digital download users for PC users (Apple’s iTunes is exclusive to the Mac platform). The rollout could give the retailer a head start on competitors such as Amazon.com , which has been mulling a move into the space.
Buy.com won’t release specific details of the iMusic rollout but industry watchers expect the price point to settle at 99 cents per song. The service won’t require a monthly subscription fee, setting it apart from the entrenched online music services from RealNetworks , which has stakes in MusicNet and Rhapsody, and America Online
, which also has a stake in MusicNet.
Jupiter Research analyst Lee Black said the Buy.com and Amazon.com moves signal a shift in the online retail business as sites with heavy traffic look to take advantage of the renewed buzz in the legal digital music sector.
With the Recording Industry Association of America (RIAA) gaining
traction in the legal battle against online music piracy, Black believes the sale of single music downloads will soon resemble the online personals space, where Web site operators look to cash in on the popular matchmaking business.
“There is renewed energy around these sites that gain a lot of traffic to start selling downloads. There is no need to create a giant retail platform. All they have to do is create a new product market to existing customers,” Black said.
In addition to traditional e-tailers, Black expects consumer electronic firms and even offline retailers with a Web presence to hop on the online music bandwagon.
It is not yet clear if Buy.com has scored licensing deals with the music labels, and Black noted that it might be not be a barrier to entry because the company could partner with a third-party firm that already owns licenses.
“They’ll need another company to service the downloads. The real
valuable (music) content is owned by the labels so I expect Buy.com to go with a MusicNet or a Listen.com,” Black added.
For Seattle-based Loudeye, the move by e-tailers into the music
subscription business provides a ready-made market for its new Loudeye Media Framework, which is styled as a single source for developing and integrating digital music purchases, music subscriptions, audio and video players, music and video channels, and music samples including meta data and cover art.
Like the online personals space, where companies like Spring Street
Networks have found a gold mine in powering matchmaking services for third party sites, Loudeye wants to be the engine that hums behind every paid music download on the Internet.
In addition to Buy.com, components of the Loudeye Media Framework are being used by Amazon.com, AOL, Apple iTunes, Barnes and Noble, MSN and Windows Media, MusicNet, PressPlay and Yahoo.
The technology, which provides a complete outsourced media framework for music retailers, provides features that include the sale of subscription-based downloads and branded players to provide both live and on-demand audio and video content to end users. It also provides digital rights management (DRM); usage reporting and analytics; digital music license clearance and
royalties; streaming music samples and cover art; music meta data and a la carte or subscription based ringtone downloads.
