I finally got around to trying Amazon's MP3 Store, the latest attempt to challenge the hegemony of Apple's iTunes Store in the world of digital music sales, and for the first time, there seems to be a legitimate competitor in the market. I bought PJ Harvey's new album, White Chalk (2007). It's available on the ITMS as well, but because her label (Island) is a subsidiary of Universal, it is only available DRM-free from Amazon. That, much more than cost or encoding details, is the main draw of Amazon's store.
Other, more punctual reviewers have covered AmazonMP3 in some detail, so I won't dwell on that. It's fine. Aside from having to download and install the Amazon MP3 Downloader before doing any actual downloads, the shopping experience is pretty seamless. The Downloader itself is reminiscent of (in fact, eerily similar to) the eMusic Download Manager, with the nice bonus feature of automatically adding purchases into iTunes. Nothing can quite match the ITMS for integration, since the latter is built right in to iTunes itself, but the browser-based shopping experience has a few advantages of its own, so I'd call it a wash.
The prices on Amazon are generally a little better than iTunes (usually 89¢ vs. 99¢ per track with album prices being somewhat variable, but seemingly centered on the $8.99 mark), but if it comes down to price, neither comes close eMusic, which averages only 25¢ per track with a full year subscription (also unprotected MP3s). eMusic's problem is that they have no major labels (including pseudo-indie subsidiaries like Island).
The real consideration between the two is selection, and to be specific: it comes down to Amazon MP3 vs. iTunes Plus, but the important decisions in this arena don't seem to be in either company's hands. Of the four major labels, Warner and Sony-BMG are still holding out and refusing to sell non-DRMed music anywhere. EMI is available on both iTunes and Amazon. That leaves Universal Music Group, which is pursuing its strange vendetta against Apple by releasing unprotected music only through Amazon, while forcing ITMS to continue selling DRMed tracks. For the moment, this gives Amazon a big edge in DRM-free selection, but I'm not sure what Universal thinks they can accomplish with this strategy. If the Amazon store fails (which seems unlikely), they'll be forced to go back to Apple with their tail between their legs and have even less say in the pricing of music. If the Amazon store somehow wins and forces Apple to shut down the ITMS (which seems virtually impossible), they'll only have succeeded in creating a new market giant, and one that it is already committed to selling only DRM-free tracks. If they just want to create competition, fine, but competition generally pushes prices down, as evidenced by Amazon's starting with a price point marginally below Apple's, and Apple's responding by dropping the 30¢ markup for iTunes Plus tracks. All Universal gets out of their current policy is a reduced opportunity to make sales and possibly smaller margins on the sales they do make (I'm speculating here. As far as I know, the details of the revenue sharing between Amazon and the labels has not been released. However, based on a pricing document [dug up by John Gruber] from a company that offers to "place" songs at the various major digital stores for labels, it appears that Apple only keeps about 29¢ on each single sale. For Amazon to undercut Apple by 10¢/track and offer higher payments to labels, they'd have to make almost nothing on each track sold).
One thing I will fault Apple for, however, is their heel-dragging in getting DRM-free independent-label music onto the ITMS. Despite the recent announcement that they were adding independent labels to the iTunes Plus program, there is still not a single one of my 475 pre-iTunes Plus purchases that has been made available without DRM. (I have made exactly one iTunes Plus purchase, The Decembrists' The Crane Wife , which turned out to be a rather disappointing album.) While some of these are tracks the major labels won't let Apple release DRM-free, a significant portion of the list is indie stuff that has been available for years on eMusic, and which is now showing up on Amazon as well: The Gothic Archies (Merge Records), Interpol (Matador Records), The Magnetic Fields (Merge), The New Pornographers (Matador), Pretty Girls Make Graves (Matador), The Shins (Sub Pop), and Sufjan Stevens (Asthmatic Kitty), to name only the full album purchases on the list. I don't want to get all Cory Doctorow about this issue, but seeing as there is obviously no objection by these labels to releasing unprotected music, it would be in Apple's best interest to get them onto iTunes Plus as fast as possible, if only to avoid giving Amazon any more bragging rights than they already have.
As for where I'll be doing my shopping in the meantime, eMusic is still my number one source for music. Most of what I like is on indie labels anyway, and the 40 downloads a month I have subscribed for keeps me more than busy enough with digesting new music. However, I'll be checking in on AmazonMP3 from time to time, particularly when some of my semi-major label faves (like PJ Harvey or Sonic Youth) come out with something new. ITMS comes in last now, since the unprotected songs they do have are very likely to be available on either eMusic or Amazon, and the content they have from the remaining DRM loyalists, even if it did interest me, I would probably hold off in the expectation that they will eventually succumb to reason and drop their insistence on DRM (or, if I really could not wait, buy the physical CD). Oddly enough, while I never had any great objection to Apple's FairPlay DRM (and I still believe it's the least offensive of existing DRM schemes), now that there are some real alternatives, I find it hard to justify buying anything that's still DRMed. This is why i suspect Sony and Warner will cave in eventually. DRM is only tolerable when it's the only game in town (aside from actively stealing content). Once there's a choice, it is exposed for the crappy arrangement that it is.