Amazon, Best Buy Join Online Internet CD Sellers
Within a few days of each other, Amazon.com and Best Buy Company announced that they were entering the Internet's music-retailing market. Amazon.com is reputed to be the world's largest bookseller. Electronics retailer Best Buy operates 284 discount outlets, primarily in the eastern part of the United States.
Reuters news service reported Feb. 24 that Amazon has made a formal commitment to online music sales. No specific date was announced for the debut, but it is expected this year. "The company has plans to enter the music business sometime in 1998," an Amazon spokeswoman said. In a few years, Amazon.com has gone from relative obscurity to the largest-volume bookseller on the planet, putting a substantial dent in the profit profiles of such giants as Barnes and Noble and Border's Bookstores.
On Sunday, March 7, Best Buy began selling cassette tape and Compact Disc recordings through its Web site, called Music+ Best Buy. Sample tracks can be accessed at www.bestbuy.com. In addition to a wide range of consumer electronics, Best Buy has long offered a fair assortment of discount music in its stores. Music fans can order online or through a toll-free phone number.
Industry analysts Jupiter Communications of New York predicts that four years from now, online music sales will amount to $1.1 billion annually. A total of $2.6 billion in Internet business was done in 1997. That figure is expected to grow to $37.5 billion by the year 2002.
Caveat to prospective online retailers: there isn't a guaranteed pot of gold at the end of the digital rainbow. The strategy now is simply to establish territory, with both Barnes and Noble and Borders eyeing the market. Despite Amazon.com's dominant position, the operation is reportedly far from profitable. Whether it can sustain itself and make money long-term remains to be seen.