For the past few years, the battle among digital music players has been a race for second, with both download services and MP3 players largely fighting over the scraps that haven't yet been gobbled up by Apple's iTunes and iPod, respectively.

As Apple has garnered 70-80 percent market share, giants like Microsoft and Google have hinted at ways they can use their girth to turn the tide.

But all the while, the Web's biggest retailer--online seller of more CDs than anyone--has remained mute about its own digital music plans.

"Amazon is especially well positioned to capture a bigger part of that business," Amazon CEO Jeff Bezos told analysts earlier this month about his company's digital media plans. "But it's premature to talk in any detail about those initiatives."

That silence has become increasingly difficult to sustain, as tidbits about the company's digital music plans have drizzled out in recent weeks, both from Amazon watchers and the labels from whom it would need to license music.

On the Warner Music Group earnings call Tuesday, CEO Edgar Bronfman said his company has been involved in negotiations with Amazon about its music service.

"We certainly have been working closely with Amazon as they work to launch their service," he said on the call. "They have a very powerful base of CD purchasers and we think that their digital launch, when it comes sort of second half of the year, we hope will be a successful one."

Today brought a bombshell.

According to the Wall Street Journal, Amazon will launch its own subscription service this year and will couple that effort with an inexpensive, Amazon-branded MP3 player that reportedly will be made by Samsung.

The newspaper reported that Amazon is in talks with all four major labels to launch a fee-based, "all you can eat" music subscription service as early as this summer.

The report said that the inexpensive--and possibly even free--Amazon-branded portable player would be directly tied to the subscription service, much in the way that cell phone providers allow customers to buy new phones cheaply if they commit to service agreements.

The players would possibly come preloaded with music playlists based on the user's previous music-buying habits, according to the report. The preloaded music could be kept on the player as long as the customer pays the monthly fee, but it could also be swapped out for other songs during the course of the subscription.

The branded player would give Amazon a direct link between its service and a device. Apple's coupling of the iTunes music store and its line of iPod players is seen as a major reason the company has been able to dominate the digital music space.

Amazon remains mum about the report and declined to comment.

But it's clear that the company is up to something big. Amazon has spent $132 million in the last three months alone on research and development, much of it directed toward digital media. The company has also hired 3,000 people, including many software-development engineers who presumably are working on digital content initiatives, over the past year.

And despite Amazon's delayed entry into the digital music game, some industry insiders tell MP3.com News that the company could make up for the late entry with its massive customer base and its CD sales.

"I don't think by any means we've seen the last of big companies getting into the space," American Technology Research analyst P.J. McNealy said. "It's really an issue of what the business model is."

Many digital music industry watchers say that although Apple has built itself a massive lead in the space, the market is still quite immature. Digital sales accounted for 6 percent of total music sales in 2005, according to the International Federation of the Phonographic Industry (IFPI).

And Jupiter Research analyst David Card says the move to subscriptions is a smart one.

Amazon's move to subscription follows the industry's conventional wisdom that subscription will eventually be far more profitable than the individual song, "a la carte" download services like iTunes. It is widely held that Apple is less focused on making iTunes profitable because the store drives sales of iPod music players, which have considerably higher profit margins than digital downloads.

Last October, Wall Street firm Jefferies & Co. and market research firm iSuppli separately tore open the then-new iPod and documented its innards, and both found that the 30GB player's guts cost as much as $150 less than its retail price.

"The 99-cent single business is never going to be very profitable," Card said.

Card says an Amazon subscription service could be viable simply because of Amazon's huge customer base. While Napster recently reported having 500,000 subscribers and RealNetworks' reported Tuesday that its Rhapsody subscription service has 1.4 million subscribers, Amazon boasts 55 million customer accounts. Amazon could likely turn even a fraction of those accounts into digital music subscribers far more cheaply than its competitors.

"Keeping customer acquisition costs down is key," he said. "Amazon already has a credit card payment infrastructure, they could bulk up on orders--they're in a good position to be a player in this space."

Amazon could keep those customer acquisition costs down by linking the service to CD sales, whereby a CD buyer would then receive access to digital copies of the music purchased. Amazon currently offers a digital locker service that lets users buy e-books and keep them in a locker, and Variety reported last month that Amazon will launch an online movie service this spring, allowing DVD buyers to watch the purchased movie online via a digital locker.

Amazon could very well do the same with music and tie that locker service to the subscription service.

But although the Journal reported that an Amazon music service could launch by summer, negotiations with the record labels are ongoing and pricing could be a sticking point.

The labels have loudly complained about Apple's 99-cent per-song pricing structure, saying that variable pricing based on a song's popularity is a better way to go.

Forbes reported today that pricing is a major source of contention between Amazon and the labels, with Amazon hoping to sell the CD-digital bundle at a discount, while the labels are reluctant to cut their prices.

But earlier this week, Bronfman said it is up to the labels to work with potential services from companies like Amazon and Google, not the other way around.

"[These companies] both already have massive businesses themselves," he said. "So the music industry needs to work with those partners to provide a service that conforms to the vision that either Google or Amazon has for their customers.

"So it really isn't us driving a vision, it's really us trying to support a vision that both can enhance our artist's opportunity and the consumer's opportunity that are part of either the Amazon or the Google networks," he continued. "And we're in constant dialogue with those companies and others to try and achieve those goals."