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HMV to spend £10m to catch up with Napster, Apple

Pledges to be a 'major force' in the music download market

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UK music, movie and games retailer HMV will finally relaunch its digital music download service in the second half of 2005, the company said today.

The Register first reported on the store's plan in June this year, when we covered the retailer's move to open an online store selling iPods. Then as now, HMV offers downloads via European digital music distributor OD2, now part of US-based Loudeye. However, a company spokesman said the retailer was planning to "upgrade its download offer very significantly" in the "near future".

According to a report in today's Times, that "upgrade" will cost the company £10m and position the retailer as a "major force" in digital music when it launches in H2 2005. Right now, it doesn't exactly go out of its way to tell punters that it offers downloads.

The new service will, like the current one, offer content in Windows Media format. That means it won't work with iPods, of course, but HMV reckons there will be plenty of devices out there that will be able to play songs downloaded from its site. True, but they will also be able to get music from a wide variety of suppliers, including other OD2-hosted services, along with Napster, Wippit, Tesco and Woolworths.

HMV naturally claimed that WMA support would prove more "important" than catering to iPod owners, but then it has little choice in the matter. While Apple refuses to licence its FairPlay DRM technology, stores like HMV can't support iPods no matter how keen they are to do so, or how strong the player's market share is.

For now that may not matter. The more companies who line up behind WMA, the less each will make from the nascent download market, which isn't yet large enough to support too many of them. Apple, on the other hand, with a very large chunk of the player market in its hands, can afford to wait until the download business matures sufficiently that punters start to buy players to support whichever download service they prefer, rather than the other way round.

The download market may have developed that far by the time HMV relaunches its online service, but we doubt it. ®

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