Amazon Soon Opening DRM-free MP3 Store

Looks like rumors are afloat that Amazon is planning on a late first quarter 2007 launch of a new music download store. In an already crowded music download market, Amazon hopes to differentiate itself in two major ways:

The company is apparently telling labels (politely, I’m sure) that it is only interested in selling DRM-free mp3s (meaning, once you download the song, it’s yours for whatever purpose you see fit, no more restrictions like you can burn only X amount of times or you can only have it reside on X computers, etc.). The second difference is that Amazon seems interested in offering variable pricing.

Rumors are claiming that Amazon began circulating contracts to labels late last week. Obviously if Amazon goes the DRM-free mp3 route, the company nicely avoids playing favorites on the hardware side, as it will only sell music downloads that are compatible on all devices.

Right now it’s not clear which major labels might be included at Amazon’s launch. Indie labels seem to be branded as the likely first movers. The DRM-free approach may not be what some labels want, but variable pricing is a feature other labels have been interested in for some time.

So the question is: Is Amazon big enough to take significant market share away from Apple & friends? If the DRM-free ideal comes true, I think we may have something to look forward to in 2007…