Sony, Amazon plot digital media services to dethrone iTunes

Reports indicate both Sony and Amazon.com are developing digital media subscription services, entering an increasingly crowded field dominated by Apple's (NASDAQ:AAPL) iTunes platform. Media industry sources tell The Financial Times that Sony will launch a premium music and video download service optimized for devices including its PlayStation gaming units, Sony Ericsson mobile handsets, Vaio computers, Bravia TVs and Blu-ray players--PlayStation 3 and PlayStation Portable devices can already stream films via the web. The service, reportedly two years in the making, is not expected to roll out to consumers until next year--Sony is still in the process of negotiating licenses with major record labels and film studios. The report adds the unnamed service will lean heavily on Gracenote, the digital media identification and recommendation solutions provider Sony acquired for $260 million in April 2008.

Not to be outdone, online retail giant Amazon will introduce its own television and movie subscription platform, The Wall Street Journal reports. People with knowledge of the project say Amazon is pitching the web-based service (optimized for browsers as well as connected devices) to media companies including NBC Universal, News Corp., Viacom and Time Warner, outlining a Netflix-like business model emphasizing catalog content--media company execs typically view older content as less of a threat to their existing business. Amazon presently sells individual episodes of TV shows, usually priced at $1.99 each--it also sells and rents feature film downloads. The new service could launch in time for the 2010 holiday season. Amazon, like Sony, declined to comment.

Apple's iTunes sales topped $1 billion during the second quarter of 2010. The digital storefront now accounts for 70 percent of all premium music downloads in the U.S. according to NPD Group data released in late May. iTunes' growth is slowing, however--NPD notes its share of the digital download market has remained essentially flat since the first quarter of 2009, increasing just 1 percentage point since that time. Rival AmazonMP3 increased its market share by 4 percentage points, and now represents 12 percent of the U.S. digital music market. Sales of digital tracks and albums accounted for 40 percent of overall U.S. music market share in the first quarter of 2010, a gain of 5 percentage points since Q1 2009, NPD said. Adding physical music purchases to the equation, iTunes still leads with 28 percent of all U.S. sales, a 4 percent year-over-year leap. Rumors indicate Apple will introduce an iTunes TV rental service during a media event later today--click here for more.

For more on the Sony subscription service:
- read this Financial Times article
For more on the Amazon.com service:
- read this Wall Street Journal article

Related articles:
Amazon m-commerce sales top $1 billion over last 12 months
Kindle ereader sales triple following Amazon price cut
Amazon's new Kindle DX touts higher contrast screen
Amazon slashes Kindle ereader price to $189