Microsoft tunes in to online music market
November 18 2003 at 08:36AM
By Lisa Baertlein
San Francisco - Microsoft said on Monday that it will jump into the online music business next year, entering an increasingly crowded market that includes Apple Computer's iTunes Music Store and Roxio's reborn Napster online music service.
"We are excited to confirm that MSN will deliver a download music service next year, and we look forward to sharing more details at a later date," said Lisa Gurry, lead product manager for Microsoft's online division MSN.
The news comes on the heels of Microsoft's announcement of a 2004 release date for software that runs on a new portable media device that will play MP3 files as well as audio and video content recorded in Microsoft's own digital format - and pose a challenge to Apple's iPod digital music player.
'What we're really seeing is a gold rush'
"It's not surprising. What we're really seeing is a gold rush," Phil Leigh, senior analyst at Tampa, Florida-based Inside Digital Media, said of Microsoft's online music plans.
"It's pretty clear to me that it's going to go from CDs to Internet distribution," Leigh said, noting that the music labels' decision to participate in the download business removed the biggest barrier to online music sales.
The Redmond, Washington-based software giant will join a field of online music providers that also includes Liquid Audio, MusicMatch, BuyMusic.com, Rhapsody from RealNetworks and others.
Elsewhere, No 1 retailer Wal-Mart Stores Inc. is expected to soon begin testing its own online music site while Amazon.com eyes the space and Viacom's MTV Networks plans a launch by early 2004.
Online media company Yahoo! last month bought BT Group's dotmusic.com and said it was mulling a move into the European download music sector.
As online music providers stake their claims, the market is brimming with deals aimed at expanding distribution.
To that end, Rhapsody inked a deal through which broadband Internet provider Comcast will deliver its music service to millions of customers via a co-branded website.
Dell, which sells a digital music player called the Dell DJ, is teaming up with MusicMatch for its Dell Music Store. Privately-held MusicNow has teamed up with retailer Best Buy to offer downloads via the Internet and special in-store kiosks, and Time Warner's America Online has a partnership with subscription services provider MusicNet.
