According to the Wall Street Journal, Amazon is in advanced talks with the four music companies about setting up a digital music service featuring an Amazon-branded MP3 player pre-loaded with a selection of heavily discounted songs.
The move is said to be crucial to the company’s long-term strategy. Despite increasing its range of goods in recent years, Amazon is still dependent on physical media such as CDs and DVDs for a large percentage of sales and will need to keep hold of that custom as many move towards digital delivery of products. The company does have very strong sales of digital music players, so would be in a good position to sell models alongside a digital music subscription.
Amazon has discussed offering subscribers players that come pre-loaded with music based on the buyer’s purchase history, with music being available whilst the person keeps paying a monthly fee. Another diea has been to sell subsidised players (like mobile phone retailers), with the profit coming from longer term contracts.
Whatever they decide, we’ll keep you posted.