Is Amazon’s Music Strategy Stalled?

PART 1 –  In the last few months Hypebot and others have published "rumors" regarding Amazon’s pending moves into music downloads.  But now the internet retail giants efforts appear stalled.

Late last year Amazon was floating a download store to both indie and major labels.  If they were going to jump into the sector; it was going to
do it with product compatible on every player which meant
mp3’s. Contracts were sent and in the case of some indies signed that pointed towards a late first quarter launch. But 1stQ has come and gone with no announcement.

Then Hypebot was the first to report that Amazon was in talks to buy eMusic.  The rumors that the world’s second largest download store was for sale had been swirling for weeks and at SxSW, Google and eMusic were named in chatter as the suitors.  Days later Amazon seemed ready to write the check, but now some sources are reporting that the deal is off.

Why is Amazon’s digital music strategy stalled?

• 
  The eMusic deal made no sense.  The e-retailer may be #2 and have agreements with every indie label  worth caring about, but it’s contracts are for a subscription service with a shared revenue model. Already many of its top labels are already growing dissatisfied with their piece of the pie.
• 
  EMI is now offering mp3’s to anyone who will write an advance check.  This makes an Amazon mp3 store less unique. And how much cash does EMI expect from Amazon?   
• The digital landscape is shifting so rapidly many labels are reluctant to sign deals with anyone – even or perhaps especially Amazon who asked for concessions that would allow a less than 99 cent price.
• 
  iTunes continues to dominate with no end in sight and Microsoft seems committed to spending whatever it takes to make Zune a success.

TOMORROW –  How Amazon Can Find Success And Happiness In The New Music Business.