But the coming digital battle between Apple and Amazon is only the most recent development in the years that digital sales have competed with physical sales of CDs. The format war between CDs and MP3s has caused significant worry for label executives, merchants, and consumers. For executives and merchants, competition with stores like iTunes have caused "traditional" music retailers to go out of business, while retailers like Wal-Mart (NYSE: WMT) and Best Buy (NYSE: BBY) have been forced to revamp marketing to include digital stores. Both of these stores lead music sales over Apple and Amazon coincidentally.

The problem is not simply digital stores running "traditional" stores out of business or causing chain retail outlets to revamp marketing, it is rather the pricing of music that has caused these changes. Digital stores like iTunes and the new Amazon store are just cheaper, offering albums for less than $10 often, when the comparable CD price is $13. The digital answer does not end there though, because online stores give consumers the option of purchasing single tracks from albums, negating the age-old practice of buying an album for one song. iTunes prices though are starting to be challenged by other digital stores, most notably by Wal-Mart, and now Amazon.

No matter how much the record labels complain about this situation though, it is important to remember that they agreed to it with their deals with iTunes. Presumably similar, or better, deals were made with Amazon in order that it could offer a completely DRM-free store with tracks accessible on many devices.

By the time the new Amazon store is open (and not beta testing) it should have made an impact on the market. The MP3 store will offer a significant challenge to the iTunes Store, but that is only one place where the music industry is operating. Neither store leads music sales, so any competition may benefit the leaders, who still offer physical CDs in addition to the digital downloads.