There have been more reports that Microsoft plans to offer a music download service next year or, to be more accurate, that MSN will offer one. (The two are not synonymous.) It still remains far from clear whether it will be a Microsoft service or whether Microsoft will simply rebadge and link to someone else's service, which is what MSN UK does with On Demand Distribution (OD2).
Assuming the UK trial of OD2 is not a disaster, there shouldn't be any doubt about MSN extending the idea to other geographies: this was already part of the plan. It involves little work and no financial risk for Microsoft, and could make it a small profit.
But for Microsoft and/or MSN to negotiate deals with music publishers, set up some server farms, sell music downloads and collect and account for the payments is a completely different kettle of fish. It is possible, but it would be a lot of work, it would involve financial risk, and Microsoft would be hard pushed to make a profit on it. This approach would also put Microsoft in direct competition with its current partner, OD2, unless it simply bought the company.
Either way, there's only one obvious reason why Microsoft would launch its own service, and that would be because it felt the need to support its proprietary audio format, WMA (Windows Media Audio). Since almost every music download service already offers WMA downloads -- including BuyMusic, MusicMatch, MusicNow, OD2 and Napster 2.0 -- it's hard to see why Microsoft should feel that need, unless those services are failing. Or unless Microsoft expects them to fail, a few years down the line.
Of course, if the European Union tries to force Microsoft to remove the Windows Media Player from Windows, then WMA music downloads will become more significant. Because every Windows user who downloads WMA files will obviously need a player. A music download service that offered one free song along with a Windows Media Player could be a simple way to plug the hole.
