Apple's European Bandmates

As the old chestnut has it, imitation is the sincerest form of flattery. But in the high-stakes and fast-moving world of digital music sales, compliments like that can kill. In the U.S., we've long heard about plans from Wal-Mart (NYSE: WMT  ) , Sony (NYSE: SNE  ) , and others to elbow their way into Apple's (Nasdaq: AAPL  ) growing music market.

Today, a couple of powerhouses in the European download wars fired a pair of preemptive PR volleys, trying to take back a bit of the press that Jobs and Co. are hoping to monopolize with a European launch for iTunes.

Roxio's (Nasdaq: ROXI  ) Napster today announced a partnership with NTL, the U.K.'s leading broadband provider. The firm launched its download service in the U.K. last month to little fanfare, at least compared to what Apple can manage. Doing so put it in direct competition with On Demand Distribution (OD2), a sort of digital music "wholesaler" that is the No. 1 European download provider, through its work for front-ends like Coca-Cola's (NYSE: KO  ), Microsoft's (Nasdaq: MSFT  ) MSN France, NEC's (Nasdaq: NIPNY  ) Packard Bell, and other affiliate sites in Germany, Spain, Italy, Austria, Belgium, and The Netherlands.

A bit of a price war ensued, and today, OD2 also turned up the heat in anticipation of iTunes' arrival, announcing its SonicSelector service, which will allow Web users to stream music for as little as 1 pence (U.K.) per song via a plug-in for Windows Media Player 9. Songs can also be downloaded the more traditional way for 0.5 euros per track.

What all this means for investors is tough to gauge. So far, Apple's been the only one to profit from digital music with any consistency, though the iPod does much better than iTunes. Roxio's prospects look mixed, and behemoths like Microsoft and Wal-Mart can afford to screw things up. With a winning formula for service and hype, this is Apple's game to lose, but given Cupertino's sketchy computer sales, the firm depends heavily on the digital music biz, where anything can happen. Priced at 65 times trailing earnings and 48 times this year's estimates, shares look too rich for reality.

For more Fool coverage of the music download biz, see:

Fool contributor Seth Jayson owns no company mentioned. View his Fool profile here.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 508412, ~/Articles/ArticleHandler.aspx, 10/25/2016 4:46:45 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 7 hours ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2016 4:00 PM
AAPL $117.65 Up +1.05 +0.90%
Apple CAPS Rating: ****
KO $42.56 Up +0.43 +1.02%
Coca-Cola CAPS Rating: ****
MSFT $61.00 Up +1.34 +2.25%
Microsoft CAPS Rating: ****
NIPNY $ Down %
NEC CAPS Rating: ***
SNE $32.14 Up +0.03 +0.09%
Sony CAPS Rating: ***
WMT $69.19 Up +0.85 +1.24%
Wal-Mart Stores CAPS Rating: ***