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The EMI DRM Announcement

EMI and Apple jointly announced today that EMI will be making virtually its entire music catalog available without DRM.  Their plan is to offer a higher priced version without DRM and with higher quality sound.  This is obviously an important development – there is lots of DRM-free music available from independent labels, but the addition of the world's third largest music label is a game-changer.  A few random comments:

  • It would surprise no one to see the other major labels follow suit in the coming months.  If EMI succeeds in selling more music, the other majors will find themselves at a significant competitive disadvantage and will move quickly to match.  Indeed, Apple's Steve Jobs indicated that he hopes to offer half the iTunes catalog without DRM by the end of the year.
  • There will be two competing approaches in evaluating the success of the EMI move.  The skeptics will focus on whether the DRM-free tracks appear on file sharing networks.  They obviously will and critics will use that development to argue that EMI was wrong to drop DRM.  The other approach will focus on sales.  If EMI sells more music, supporters will argue (rightly in my view) that the EMI move validates the concerns associated with DRM and that the market has been hamstrung to-date by interoperability and DRM concerns.
  • Steve Jobs today said that he believes the video market is different from the music market given that music is widely available without DRM but video is not.  I'm not convinced – this may be true for some movies, but television shows and other video content is freely available at no cost and without DRM.  I would expect that the television download market will follow suit as there is no reason for the networks to lock up content that they give away without such protection.
  • Finally, Canada's political leaders should pay attention to this development as the claims that the digital market is dependent on DRM (or that the Canadian market has been harmed by the absence of legal protection for DRM) has been dealt a serious blow.  If anything, today's announcement demonstrates that DRM may have harmed the acceptance of the digital market.  With the Canadian digital download market growing faster than either the U.S. or the European Union, there is no reason to believe that our legal framework has negatively affected the marketplace.

7 Comments

  1. This IS a positive move on EMI and Apple’s.

    However:

    1. Per-track prices in Canada are already high as it is (CAD$1.30 or so). Would DRM-free tracks be pushed closer to $2.00?

    2. Offering higher quality DRM-free files, even at a higher price, must still rub fans the wrong way.

    3. Places like eMusic already offer a completely DRM-free library at high quality (upwards of 320kbps).

    4. CDs are currently made DRM-free, with the ability to rip non-DRM files at the highest quality desired.

    5. All movie and TV DVDs are locked down with DRM still, despite being easily bypassed and TV stations STILL offer their shows over-the-air, including HD signals (with the exception of pay-TV, which has a vested desire to see their signal lnot freely available).

    Bottomline: DRM is wrong, period. If EMI and Apple offered their library at current file quality, at the current price THEN they’d be closer to the right path. 99¢ US is still way too much even for a DRM-free music file.

  2. inaequitas says:

    file sharing
    The issue with sharing files over P2P is blown out of proportion a bit. There have been iTunes-only, DRM-laden tracks that made their way on the networks anyway; most high-volume sharing sites don’t even allow files with such low quality to be shared [taking after what the 'scene' rules are nowadays.]

    DRM-free music can boost sales, but some say it would be detrimental to the iPod so that Apple wouldn’t be interested in really having everything unrestricted. I’d think that once everything is DRM-free, the iPod can finally allow easier copying of tracks out of it, better interoperability with Linux and wider adoption for it’s features [which, IMO, are second to none in the mp3 player scene.]

  3. Three things
    First, I don’t care if I have to pay a small premium like $0.30. If that’s what the music industry thinks its worth, than I’ll pay that in order to keep DRM-free music.

    Second, Sony is trying, all be it not very successfully to copy protect their CD’s. I don’t know what their copy protection is actually accomplishing, since I seem to be able to still rip their cd’s, but they are trying. I really, really would like this to go away. If they ever actually succeed I’ll have to stop buying.

    Third, do you think its possible that sales of drm-free won’t take off? I’d hate it if after finally getting EMI to come on board they go back to drm tracks because they didn’t see much of a sales increase.

  4. I don\’t get why pay 30% more for DRM free music? The thing that disturbed me the most is the comment they made about the success of this move. It depends on if the consumer really pays *more* for the DRM-free Music.

  5. In answer to the first comment, songs cost 99 Canadian cents on the iTunes music store for Canada.

    In answer to the last 4th comment, why pay more? So you can have greater freedom with your music, you don’t have to worry about backing it up, copying it to multiple devices you own, being able to use it on portable devices other than the iPod, and of course double the bit rate (higher sound quality).

    I think this is a massive step in the right direction and I would be willing to bet that these DRM free tracks are going to sell better than the DRMed tracks. Most importantly, you can get the full albums at the same price without DRM, which makes them much more attractive than they were before compared to buying a physical album.

  6. The DRM-free price per song is annoying. I think it prices itself out of the market, especially when you compare to eMusic (about 30 cents per song, DRM-free and high quality).

    But, where iTunes is good is that they are selling whole albums for the old price of $9.99 and you get the higher quality DRM-Free. That is good, except I rarely buy a whole album.

    I don’t mind a higher cost for higher quality though. I expect this will be the case in the future, as we download more shows, movies, and music. My guess is that there will be a trade-up cost that lets you buy standard quality tv shows, then pay a bit more for upgrading to 720p, then a bit more for 1080p.

    That is fine with me, it even becomes a viable option to DVD in which you are stuck with what you bought.

  7. Quote – “DRM increases not decreases consumer value”: Fred Amoroso
    CEO & President
    Macrovision Corporation

    So we’re all saying that Fred was actually right ;)? One has to wonder how this concept of “added value” equates to doing whatever you want with a music track. Haven’t we had this “added value” since the inception of playback devices? I don’t recall any playback device refusing to play content or recording device that refuse to record onto a cassette tape up until the iPod era.

    I planned a long rant here but see that everything I wanted to articulate on is covered quite thoroughly in the latest two installments of the Lefsetz Letter ([ link ]). I encourage all to go read it.