Tesco launches new music store

Britain’s biggest supermarket has announced plans to take on iTunes with a new music download service.

The company announced the venture on Tuesday and confirmed it’s place as number one in the country with profits of £2.8 billion and have promised that prices will be competitive in comparison to it’s competitors.

The Tesco music download service will at first only offer music, but the supermarket chain hopes to eventually offer films and television shows as well.

The company launched a music store back in 2004 after nearly half a decade of online presence. However, the service was only available to those using Windows Media Player and so, not everyone could benefit it.

Tesco’s main competitor in the market is Apple’s iTunes. Earlier in the week reports revealed that Amazon’s music store wasn’t doing as much damage to the iTunes clientele as they anticipated.

Amazon launched a new digital music store last year, offering DRM-free MP3 downloads exclusively. It has managed to get all four major record labels to on board while Apple only offers DRM-free tracks from EMI Records.

Around 90% of customers at Amazon’s digital music store had not shopped regularly at iTunes before, according to research firm NPD. This means that people who are buying from Amazon are largely consumers who are new to the digital music download market.

While it appears to be positive news for a company just entering the market in that Amazon seems to be creating its own customers rather than just stealing from Apple, it doesn’t change the fact that Amazon has one tenth of the customers iTunes can lay claim to. Amazon might be second, but it doesn’t look like it’ll be pulling ahead anytime soon.

There might be room for more than two (or perhaps even three ?) music stores but this may only remain true as long as competitors stay significantly smaller than iTunes.