Amazon.com (NASDAQ:AMZN) is making it more attractive to make the leading online retailer your next source for music purchases.
Amazon is introducing AutoRip, giving buyers of more than 50,000 CDs instant access to high-quality MP3 versions that they can stream or download through Amazon's Cloud Player. It's not just future purchases. If you have bought any of the 50,000 CDs through Amazon in the past, those songs are now freely available to you digitally through Amazon's fledgling streaming platform.
Good luck matching that, Apple (NASDAQ:AAPL).
Yes, Apple's iTunes is the undisputed top dog in download sales, but it has never had an interest in physical distribution -- and rightfully so. CD sales have been on a swift decline since peaking in 2000. Apple will never sell CDs. The world's most valuable tech company was quick to ditch the optical drive in creating sleek computers, forcing software and media companies into embracing digital distribution. It's not a surprise that the iPod, iPhone, and iPad lines of iOS devices don't have drives. Forget the CD Walkman! These are truly portable gadgets.
However, for those that still appreciate CDs -- or like to give them as gifts to older family members and friends -- Amazon just became the best place to shop for audio CDs. Why go to Best Buy (NYSE:BBY) and buy a CD when Amazon probably has a comparable if not better price along with instant streaming access?
Amazon isn't necessarily being original here.
A decade ago, the original MP3.com teamed up with a few Web-savvy CD retailers offering buyers access to MP3.com-ripped tracks from purchased albums. The problem then -- and it's what ultimately did MP3.com in -- is that MP3.com did this without the blessing of the major labels. The digital locker consisted of MP3.com's copies of the CDs, and the labels sent in the legal eagles until MP3.com buckled.
Amazon's already ahead on that front. It's only offering AutoRip to the titles that three major labels have made available for the program. It's legal, and as sales for those labels improve -- the AutoRip logo will draw attention on the participating titles -- the rest of the industry may follow.
It's a good place for Amazon to be. Wal-Mart (NYSE:WMT) stopped selling MP3 downloads two summers ago. Best Buy unloaded its Napster streaming service, and these days the BestBuy.com's music page only offers CDs and vinyl.
AutoRip will be good for Amazon in drumming up CD sales, but perhaps more importantly, it'll get music fans to check out Cloud Player and lean on the e-tailer for digital music sales in the future.
Amazon always finds a way to outsmart the competition.
Longtime Fool contributor Rick Aristotle Munarriz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Apple. The Motley Fool owns shares of Amazon.com and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.