Amazon.com DRM-Free Service Won’t Kill Apple (AMZN, AAPL)

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What happens when an online retailer like Amazon.com (AMZN-NASDAQ) gets to compete against Steve Jobs and Apple (AAPL-NASDAQ) at the race to DRM-free music downloads?  The most likely truth may be not that much.

Amazon.com has announced a DRM-Free MP3 download store that will be exclusively in the MP3 format.  EMI will be licensing their 12,000+ record label catalog to Amazon in the deal.  So they are going for a platform neutral music service that will allow songs to be burned onto CDs for personal use.  It should be known that at least a version of this agreement from Amazon.com has been anticipated after EMI signaled it was planning to do DRM-free music.

The real truth to this is that Amazon.com is basically getting to join the club since Jobs was the first or at least the most vocal for this move.  Amazon.com shares are up 0.5% at $60.88.  If this was going to be a true iTunes killer, then AAPL shares would not likely be up the same 0.4% this morning.  There are probably too many iTunes and iPod loyalists out there for this to be a true Apple-killer of a deal.

Jon C. Ogg
May 16, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.