Microsoft will be partnering with On Demand Distribution (OD2) to launch a European rival to the US-only Apple iTunes service. OD2 currently has 200,000 tracks available from five major record companies, which they hope to expand to 300,000 in the next few weeks.The proposed pricing of single tracks is 75 pence (Euro 1.06, $1.21) with albums being £7.99 (Euro 11.37, $12.86). The Apple service pound equivalent is about 62p and £6.20.The higher pricing of the proposed UK service will re-ignite the debate over the pricing of electronically delivered good compared with their physical CD equivalent. The argument from those that say the download versions are priced to highly is that these aren’t physical good that need to be manufactured, packaged, shipped and justify their place on a retailers shelf – they’re electrons, that once encoded take up a tiny amount of low cost disk space and then have a low cost of distribution. The companies justify the prices saying they have large investments in server hardware. As more providers enter the market, competition lowers prices – in the US, rival pay-and-download services have started dropping their prices, with some offering tracks at 79 cents.It’s widely acknowledged that the Apple iTunes service has been a great success. The problem for the world at-large is that currently it only runs on Apple hardware, which only accounts for around 5% of all computers, and it is currently only available in the USA. Among the reasons that the Apple service has been embraced so heartily, is that is it fantastically easy to use, it recommends related music to you and the licensing terms gives the purchaser a lot of freedom to move their purchased music to different computers and portable music players. Details have yet to emerge as to what the Microsoft/OD2 offering will be like.