EMI Group Goes the MP3 Route

In a somewhat surprising move, today's Wall Street Journal notes that EMI (EMIPY.PK) is now selling Norah Jones' latest single in MP3 form through Yahoo.com. They key point here is that these songs are not encumbered by digital rights management restrictions such as those in Apple's (AAPL) FairPlay or Microsoft's (MSFT) Windows Media formats. So why are they doing that? One reason: they want their music on iPods:

The releases come as some high-tech and music-industry executives are becoming increasingly concerned about Apple's growing clout in the music business. Only online music files purchased from iTunes, ripped from users' own CDs or downloaded from pirate services can be played on the popular iPod. Copy-protected songs purchased from Yahoo and other legitimate sources don't work on it. By selling music in the MP3 format without copy-protection software, Yahoo can offer music that works easily on iPods.

We here at Blackfriars have previously advocated Apple taking the same approach to satisfy upcoming laws in France and Denmark designed to promote competition and compatibility in the music market. And to be fair, this is just a baby step along that path; the labels will need a lot of convincing with sales numbers before they'll embrace MP3 music.

But as the article notes, the music industry already sells unprotected music on CDs; moving to MP3s would just allow them more channels of distribution and compatibility with more music players. And much of the software industry (excluding some of the BMA supporters like Microsoft and Adobe) have learned to live with software disks that are similarly unprotected. The key insight is that while sharing of music and software is inevitable no matter how many DRM systems there are, standardized and unrestricted formats boost viral and word-of-mouth marketing of those same products. Let's hope more label executives figure that out.