HMV is the latest of the big hitters to ramp up their interest in digital distribution, with the announcement of a digital music project in conjunction with Microsoft that will include a 10 million pounds investment from HMV and the development of a customized juke box. Of course HMV already have an OD2 offering in place, but this project suggests that HMV have finally decided the time is ripe for them to ramp up their interest in this space. For a retailer like HMV, with extensive traditional retailing and e-commerce expertise and experience, it makes sense for them to ‘own’ their digital music services rather than out sourcing.
What is also significant is that piece-by-piece the collection of heavyweight WMA services is growing. Right now Apple should be thinking about how they can retain their market leading position in what will be a much more competitive market place, where there is a significant chance that WMA could make the transition from lowest common denominator, to dominant.
I’ve always considered the traditional music retailers (and of course Amazon) to be the dark horses of digital distribution: they have established brands, customer relationships and huge cross marketing capabilities. Of course, the odds are still heavily on Apple being market leaders at the end of 2005, but they’ll find the next 12 months a lot more competitive than the previous 12.