Microsoft vs iTunes is starting to make headlines. Ignore it.
We know that MS has already won - because Apple had a chance to fundamentally alter
the industry's economics and business model, and failed to do either. iTunes is the same old obsolete model tacked onto a prettier front end - Apple's (unfortunately) squandered it's massive opportunity to build a new model around the discontinuities in consumer preferences and technology that are creating new economics for all media industries.
Because Apple didn't build a new model using isolating mechanisms to build protected resources, all bets are off. In fact, my predictions for this market have already come true: massive hypercompetition leading to intense price wars. Prices are currently being (desperately) being propped up by suppliers (major labels) - but this will change as soon as a shakeout occurs further down the value chain, and distributors can exert more intense pressure of their own because buyer power is concentrated (read: MS).
Now that all things are equal, since MS has far more valuable and scarce resources to leverage, it will necessarily gain a large advantage over Apple, barring seriously discontinuous competition - which seems unlikely.