DRM-Free EMI Songs a Boon for Apple

By Carl Howe

Record label EMI and Apple have reached an agreement that allows Apple's iTunes store to carry a significant portion of EMI's music catalog without Digital Rights Management [DRM] restrictions. The new DRM-free AAC files will sell for a premium price, $1.29 a song, allowing that music to be played on many third-party music players, not just iPods. For those who don't want to pay for the higher quality or lack of DRM, the same songs will be available including Apple's Fairplay DRM for $0.99. Buyers who purchase albums will automatically get the higher quality versions without DRM.

From a marketing point of view, we see this move as smart on both EMI's and Apple's part. For EMI, its higher-quality DRM-free music is now differentiated in a way that could dramatically increase its revenue and increase album sales over the less-profitable singles.

For Apple, it now has a deal that proves that Jobs' claim to oppose DRM is real and differentiates Apple's services significantly from the draconian DRM restrictions Microsoft places on its music and video. And without as many DRM shackles to enforce, Apple has the potential to further simplify the user experience for its customers.

Most record labels will see this as a ground-breaking, dangerous experiment. But with CD sales down 20% this year, they had to do something. And kudos to Jobs and Apple for having the courage to call for the end of DRM and the business drive to make it happen. It's one small step for music, but one giant leap for consumer fair use rights in the digital age. We look forward to other labels following suit.

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