Meanwhile, UK-based digital music distributor OD2, which already provides the infrastructure for several of these services in Europe, announced on Tuesday plans to launch a paid-download service next month in the UK under the Coca-Cola brand. OD2 is also expanding into Australia: Ninemsn, the Internet portal that is a joint venture between Microsoft and Syndey-based Publishing and Broadcasting Limited (PBL), announced last week that it will launch a music service, also in January 2004. Ninemsn expects this to be Australia's largest online music service. OD2 is a Microsoft partner and uses its media format and DRM scheme exclusively.

Two questions beg to be asked here. The first is, did anyone learn anything from the rise and fall of online retail of physical music (CDs, LPs, and cassettes)? How many online physical music retail sites of significant size are there today? That's right: one. Two, if you count the music club Columbia House, itself a consolidation of legacy mail-order record clubs. While we agree that there may not be much first-mover advantage in this market, we are still scratching our heads at the number of companies wanting in.

The second question is: why hasn't Microsoft acquired OD2 yet, and when will it finally do so?