Online retailer Amazon is said to be in "advanced talks" with the world's biggest music companies about a new digital music service. Amazon plans to launch a subscription service as well as its own
branded portable digital music player that could either come preloaded with songs or be sold very cheaply alongside a subscription service contract--similar to the way mobile providers sell the
majority of their phones. Music execs told the
Wall Street Journal they believe Amazon's plan represents one of the only credible challenges to Apple's iTunes. However, it remains to be seen
whether the retailer can amass significant usage given its late entry into the music business. The
Journal points out that Amazon needs this move into digital media distribution, especially as
consumers continue the transition from CDs and DVDs to online services. Seventy percent of Amazon's 2005 revenue came from physical media. Even so, Amazon did not confirm the
Journal's report,
and no official deal has yet been struck between the company and the four music majors: Universal Music Group, Sony BMG, Warner Music Group and EMI Group. The service could launch as soon as this
summer.
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