iTMS Gets More Serious Competition In The Music Market From MusicMatch

by , 12:00 PM EDT, September 29th, 2003

Apple has what may be the first serious competition in the online music business from a company it is currently working with, MusicMatch. That company currently provides the software to manage music for Windows-using iPod owners. The software, called MusicMatch Jukebox, interfaces with the iPod, and allows the playback of songs on Windows machines. It also includes built-in streaming "radio" capabilities, including free and subscription services.

According to USA Today, the MusicMatch company is launching its own online music store that is based not in the browser like BuyMusic.com is, but in the Jukebox software itself, just like iTunes. The service will run off of Microsoft's WMA file format, offer songs at US$.99 each, and offer unlimited CD burns and transfers to most current MP3 players (except the iPod). The latter restriction is because Apple wouldn't work with MusicMatch, according to the company. From USA Today:

MusicMatch Download is more subtle than the usual e-commerce concept: While listening to pre-existing tracks or online radio using MusicMatch's popular music-playing software — with 40 million registered users — fans will take advantage of MusicMatch's built-in recommendation service and buy other tunes. "We know more about people's musical tastes than anybody," Mudd says.

MusicMatch already has 160,000 paid subscribers to its radio offerings (free versions also are available), but users don't need to subscribe to download. They can either update their current software or download it at musicmatch.com, sign up for an account and start buying songs.

The downloads are in the Windows Media format, which can be played on most modern digital portables but is not compatible with the most popular unit — Apple's own iPod. Apple, a likely competitor, wasn't willing to work with the company on the download store, Mudd says. Windows Media files are "secure" files, locked so they can't be shared online or altered in any way.

Analyst Phil Leigh of Inside Digital Media says MusicMatch should find a much better reception than previous Windows download services, thanks to the loosened restrictions. "Consumers won't pay anyone to complicate their lives," he says.

He says that having the service tied closely to the player software — as iTunes does, and BuyMusic, which uses any Web browser, does not — makes sense: "Who wants to listen to a song, go to another program to buy it and another to burn?"

There's more information in the full story.

The Mac Observer Spin:

This is truly the closest thing to the iTMS that anyone in the Windows camp has come close to. From usage rights, to pricing, to including the store inside the management software, MusicMatch clearly figured out what Apple is doing right. It's just too bad that Apple won't work with the company to include WMA capabilities in the iPod. As it is right now, the only legal downloads an iPod owner can play are those coming from Apple, and that is an artificial exclusion of potentially millions of customers.

Note that this echoes ideas discussed by TMO editor Bryan Chaffin earlier this morning. In fact, this new service from MusicMatch may well be one half of the combination that could seriously threaten Apple's perceived lead in this industry (see that column for more information). It would be a shame if Apple lets that happen, but here we are.

USA Today Article