Head-to-Head: Amazon Takes on iTunes

Amazon.com (NASDAQ:AMZN) is going head-on with Apple (NASDAQ:AAPL) in the content business after announcing a new music service that competes with the iTunes store.

Amazon AutoRip will give customers free digital versions of music CDs purchased from the Internet retailer. The music files will be stored in the cloud automatically, giving the user the option to play or download them immediately, Reuters said. Amazon’s cloud player is free for customers who download 250 songs or fewer and costs $24.99 annually for up to 250,000 downloads.

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While Amazon has been in the digital music business since 2007, its market share is less than 15 percent, according to data from The NPD Group. Apple’s iTunes store leads the market with more than 50 percent share…

Steve Boom, the chief of digital music at Amazon, said more than 50,000 albums were available under AutoRip, but did not say how many CDs the company expected to digitize through the new service.

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“When we picked those 50,000 titles we focused on having a substantial majority of our physical CD sales covered,” Boom said. “People will be exposed to Cloud Player and our digital music offering, which is a good thing. We want to take this global.”

All customers who bought AutoRip-eligible CDs at any time since 1998 will automatically receive the digital versions of the music for free, the company added. AutoRip will apply automatically to all customers who have a cloud player account and there was no opt-out system yet.

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