Amazon vs. Apple- does it matter who wins the download wars?

Very interesting story from Billboard about Apple’s challenging of Amazon of exclusive rights to sell new albums cheaply. The labels clearly want some competition so they’re not beholden to Jobs all the time but for now, it looks like he’s still got the juice, being able to scale down Amazon’s ambitious plans in this area .

So who’s the good guy or bad guy here? Keep in mind that these are two big companies fighting to see which one of them will dominate the label-approved download market (which Apple still does by a wide margin), which nowadays is kind of like two dogs fighting over a relatively small (and shrinking) piece of meat from a dumpster. … which is to say that even with 10 billion downloads sold by Apple, the market for online music sales isn’t exactly booming now.

So why are they fighting this turf war? Apple still wants to dominate not necessarily with iTunes but with the iPhone and to a lesser extent the iPod (which ain’t the hot new item anymore), which gives them a much higher profit margin than song sales. The fact is, they also need the song sales tied to iTunes to help sell their hardware. Amazon wisely sensed the need for some competition in this market that Apple’s dominated for years. They want to sell hardware too (Kindle) though they don’t have their own device for music, at least yet. So for now, they’d like you to get accustomed to downloading media from them, be it books or music.

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