Microsoft beats Apple iTunes Music Store to Europe

Partnership with music industry darling, OD2

Microsoft has beaten Apple to launch an subscription-free online music service in Europe. The software giant said today it is partnering with European digital music distributor OD2 to offer an iTunes Music Store-style service for Windows users.

OD2 already supplies MSN in Europe, along with Italy's Tiscali, Freeserve, the HMV and Tower Records store chains, BT's Dotmusic enterprise, and others. Founded by Peter Gabriel in 2000, the company says: "The other directors and employees cover backgrounds from... senior UK and international positions in major and independent Record companies".

Such close connections with the music industry's key players may explain why OD2 is the only European music distributor to secure licensing deals with all the major labels. The company has a catalogue of over 200,000 songs, it said.

Following Apple's lead, the new OD2 service will not require a monthly subscription. Earlier versions of its service were subscription-based, and presumably these will continue for online vendors attached to that business model. So far only MSN and Tiscali have signed up to offer the new service to music buyers. However, OD2 Chief Executive Charles Grimsdale said he expects others to follow suit.

Grimsdale is also a partner in Eden Ventures, one of OD2's key investors.

With the new offering, songs can be downloaded track by track for €0.99 ($1.13) or £0.75, depending on the customer's location. Full albums can be downloaded for €12.49 or £7.99 a pop. Tracks can be transfered to portable players or burned to CD - provided their coopyright owner has sanctioned such uses, and not all of them have.

The service requires Windows Media Player 9, since all of OD2's distribution and DRM systems are based on Microsoft technology. Grimsdale confirmed Apple will not be partnering with OD2 when or if it enters the European market, but given OD2's attachment to Microsoft products, that's not entirely surprising.

Apple has not said when it will bring its iTunes Music Store to Europe, though it has pledged to open its US store to Windows users by the end of the year. ®