Tesco to launch music, TV download service

By Mimi Turner
LONDON -- Leading British supermarket group Tesco is taking on such online retailers as Amazon and Apple's iTunes, unveiling plans Tuesday for a major push into the content download space.

Tesco will launch TescoDownloads.com this year, starting with music content, but promising to also eventually offer music, television shows and video games.

The service, scheduled to launch with 3.3 million music downloads -- some of which will come without digital rights management software -- will be an extension of the success of the supermarket group's online retail service.

Tesco hasn't discussed its pricing model, but is expected to build in rewards for its supermarket customers to cross-promote its bricks-and-mortar business.

"We're starting out with a comprehensive music offering, but customers can expect downloadable TV and films as well as games to buy very soon," Tesco commercial director Graham Harris said. "Music is just the start."

Downloads from the site will be MP3 and iPod compatible, Harris said.

The company launched Tesco.com in 2000. In November 2004, it became the first major British supermarket to enter the music download business, with a service offering more than 500,000 titles at a flat rate of 79 pence each ($1.46), and albums at 7.99 pounds ($14.81). That service, however, offers downloads only in the Windows Media format.

Tesco accounted for 12.7% of U.K. record buyers' albums expenditure in 2006, according to labels body the BPI.

Billboard global news editor Lars Brandle in London contributed to this report.


Tesco to launch music, TV download service

By Mimi Turner
LONDON -- Leading British supermarket group Tesco is taking on such online retailers as Amazon and Apple's iTunes, unveiling plans Tuesday for a major push into the content download space.

Tesco will launch TescoDownloads.com this year, starting with music content, but promising to also eventually offer music, television shows and video games.

The service, scheduled to launch with 3.3 million music downloads -- some of which will come without digital rights management software -- will be an extension of the success of the supermarket group's online retail service.

Tesco hasn't discussed its pricing model, but is expected to build in rewards for its supermarket customers to cross-promote its bricks-and-mortar business.

"We're starting out with a comprehensive music offering, but customers can expect downloadable TV and films as well as games to buy very soon," Tesco commercial director Graham Harris said. "Music is just the start."

Downloads from the site will be MP3 and iPod compatible, Harris said.

The company launched Tesco.com in 2000. In November 2004, it became the first major British supermarket to enter the music download business, with a service offering more than 500,000 titles at a flat rate of 79 pence each ($1.46), and albums at 7.99 pounds ($14.81). That service, however, offers downloads only in the Windows Media format.

Tesco accounted for 12.7% of U.K. record buyers' albums expenditure in 2006, according to labels body the BPI.

Billboard global news editor Lars Brandle in London contributed to this report.


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DENVER -- New figures from NPD Group suggest that the Amazon DRM-free digital music service is doing more to grow the overall digital music market as opposed to simply stealing customers from iTunes.

The research group says only 10% of Amazon customers had previously bought music from Apple's iTunes service. While many tagged the Amazon service as an "iTunes killer" when it first launched, the music industry's hope all along was never to cannibalize iTunes sales but rather encourage new digital buyers. NPD's data suggest exactly that is happening.

"The fact that Amazon's early growth does not appear to be at the expense of Apple iTunes is a healthy indication that the digital music customer pool can expand into new consumer groups who have not yet joined the iTunes community," said NPD analyst Russ Crupnick in a statement.

NPD says Amazon is now second only to iTunes in the a la carte digital download category (for those keeping score). The company did not disclose how many users Amazon has attracted in total, however it did say iTunes volume is 10 times that of Amazon.

Some interesting demographic breakdown has emerged between the two services as well. NPD says 84% of Amazon customers are male, compared to 44% of iTunes, but only 3% of Amazon customers were teens, compared to iTunes' 18% (the latter attributed primarily to the popularity of iTunes gift cards.)

NPD says Amazon's growth is likely more due to existing Amazon customers adopting the new service rather than due its lower pricing or DRM-free policies.

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