UK online music gears up for a price war

While iTunes and other US song shops have been having some trouble setting up their stalls in the UK, it seems some UK players are doing none too badly for themselves.

OD2, the online music shop which sells its technology on to resellers like HMV, has announced that it's clocked up its one-millionth download in the first quarter of this year and is showing earnings of over £1m too.

While the folks across the Atlantic are managing more respectable totals – Apple's iTunes notched up its 50-millionth download not so long ago – the success of a European player heralds new growth for the continent.

And if cutting prices was ever a way to get consumers interested, another UK provider, Wippit, will have its arm bitten off shortly.

The industry standard for a single song download often hangs round the 99¢ or 99p mark, depending on what side of the pond you are, Wippit announced today that it will be cutting its prices to 29p per song.

Not all tunes will cost the bargain basement prices – song fees will vary from 29p up to 99p – but popular tunes like Outkast's Hey Ya can be picked up for the lower rates. Both OD2 and Wippit recently launched pay by text features for their services.

The downward movement for prices is not unexpected as the market becomes increasingly crowded with offerings from high street names like Microsoft and Wal-Mart making their debut. However, with the boom in paid-for media content finally looking to be taking off, analyst house Meta Group is advising retailers to do more to protect their assets.

Digital rights management (DRM) helps content owners ensure their content isn't pirated. According to the latest research from Meta Group, only 20 per cent of companies who offer content will be using the DRM by 2006 – just two per cent use it now.

The cost of implementing the technology has put customers off to date and the concept has yet to make it into accepted best practice but analyst David Thompson believes that as privacy legislation takes off, more and more companies will start to integrate the technology into their overall infrastructure.