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On Demand Distribution (OD2) slashed prices by up to 50 per cent this morning, in a bid to pre-empt the announcement of rival digital music distributor Napster's UK launch date today.

OD2 is one of the longest-running players in Europe. Its technology powers music download sites run by third-parties, including MyCokeMusic, high street music retailer HMV and a handful of pan-European ISPs. In total, it sells through 21 online sites in nine European territories. It also has deals in place with the big five global music labels.

Earlier this year, the company announced it had sold one million downloads across Europe during the first three months of the year. It sounds impressive, but even Napster managed five million downloads during its first three months of operating as a song seller.

Now as Napster announces its UK launch date, OD2 said it will offer UK customers bundles of 40 songs for £20 ($35.66). Its a la carte download service is currently priced at £1 a track.

Napster will be joined by Apple's iTunes Music Store later this year - we've heard 4 July mentioned as iTMS' European launch date, but we remain sceptical - and Sony's Connect on 7 June. A variety of smaller, home-grown services, such as Wippit, the Mean Fiddler organisation and Recordstore, are already up and running, but with much narrower choices of songs.

Virgin is also expected to launch its Virgin Digital service later this year. It currently offers digital downloads via OD2, but the new offering will be powered by MusicNet, which this year set up shop in the UK in to win back-end deals with would-be digital music retailers.

That leaves OD2's distribution business threatened by other disties - fellow European distributor DX3 seems to have offered little competition thus far - and from retail services like Napster, Apple and Sony, which will almost certainly pull buyers away from OD2's retail partners. ®

Related stories

Music biz fears play Apple a compliment
OD2 clocks up 1m downloads in Q1
MusicNet to deliver music downloads to UK
Mean Fiddler flogs music downloads
Recordstore offers MP3 and WMA tracks
Virgin to open music download service

Gartner critical capabilities for enterprise endpoint backup

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