by Playfuls Staff |
9th April 2007
EMI-Apple’s decision to sell on iTunes DRM-free songs was
quite a surprise for the music industry. Indeed Steve Jobs has expressed his
feelings about DRM in his open letter one month ago but no one believed [more] that
a music company will agree to share Apple’s vision.
In a surprising move, last week in a joint press conference
with Steve Jobs, EMI Music agreed to launch new premium downloads for retail on
a global basis, making all of its digital repertoire available at a much higher
sound quality than existing downloads and free of digital rights management
(DRM) restrictions.
EMI said at the time that its move comes as a response to
consumer demand for high fidelity digital music for use on home music systems,
mobile phones and digital music players. EMI's new DRM-free products will
enable full interoperability of digital music across all devices and platforms.
"Our goal is to give consumers the best possible
digital music experience. By providing DRM-free downloads, we aim to address
the lack of interoperability which is frustrating for many music fans. We
believe that offering consumers the opportunity to buy higher quality tracks
and listen to them on the device or platform of their choice will boost sales
of digital music” said Eric Nicoli, CEO of EMI Group.
Indeed the real winners of the EMI-Apple deal are the
consumers and, of course, the MP3 players producers, but is still unclear what will
be the future of DRM.
Following closely the Apple’s move, Microsoft also hinted
that is considering DRM-free songs for its Zune platform. Speaking with Times,
Jason Reindorp, head of marketing for Zune, confirmed that Microsoft is negotiating
with EMI. “We've been saying for a while that we are aware that consumers want
to have unprotected content.”, Reindrop said. ”This does open things up a
little bit. It potentially makes the competition more of a device-to-device or
service-to-service basis, and will force the various services to really
innovate.” Reindrop added for Times.
A Microsoft spokeswoman confirmed the potential agreement
for IDG News Service. "The EMI announcement on Monday was not exclusive to
Apple," said Microsoft spokeswoman on the Zune team, in an e-mail to the
IDG News Service.
Tough, EMI declined to comment a possible deal with
Microsoft but confirmed that the two companies are negotiating. Zune Marketplace,
a service similar with iTunes, offers already music from EMI.
Even with Apple and Microsoft playing on the same side, it’s
not sure that the other three major companies, Warner Music, Universal and Sony
BMG will follow EMI’s example.
With EMI Apple deal in place, the three music giants are
facing increased pressure to adopt DRM-free downloads, but they had their reservations
about the uncertain impact on this decision.
Warner Music Group CEO Edgar Bronfman Jr. already expressed publicly
his opinion about DRM-free world. Shortly after Jobs’ letter Edgar Bronfman
said in a conference call with analysts that Apple CEO stance to give up DRM is
"completely without logic or merit. We advocate the continued ...
protection of our and our artists’ intellectual property" he said. “There
is no logical reason to abandon DRM nor to disadvantage services that are
successfully implementing DRM," Bronfman added. The other two music
companies declined to make public comments on the EMI-Apple deal.
Instead the music companies would preferred Apple to share
with other makers the FairPlay technology, which allows music downloaded from
iTunes to be played only in iPod.
What is clear is that the music executives worry that dropping
DRM will make the music vulnerable to piracy. The unprotected songs downloaded
from legal services may find their way on to illegal file-sharing networks,
which in the end mean that fewer people will be interested to buy.
In theory, EMI’s move should boost the company’s online
music sales, despite the piracy. EMI hopes to grab a bigger share of the
digital music market (which is expected to steadily rise in detriment of CD
sales until 2010), putting its bet also on music downloaded on mobile phones
(more than 500 million handsets available worldwide by the end of 2007). But
this is just a theory…
Another issue is the price of the DRM-free songs. According
to Apple and EMI, the songs with their DRM removed will be available at a price
of $1.29/€1.29/£0.99. A higher price could lure the customers away from legal
music services.
In the past, Apple dismissed the request of the music
companies to introduce a variable pricing scheme on iTunes. During the first
period of 2006, the officials of the four companies had made a lot of
statements saying that the old records should be priced at 60 – 80 cents, and
the price of the new tunes should be around $1.20. Apple argued that a
flat-rate price is a method to keep customers away peer-to-peer and illegal
file-sharing services.
Still, an EMI-Apple success could convince the other
companies to jump into DRM-free boat. Even Apple EMI deal could mean a new era
for consumers, their effort to ditch DRM will be useless if the other music
companies will decide not to follow the same policy. Until now, DRM is alive
and kicking.
