April 2, 2007: The Day DRM Died? A Summary of Opinions from Around the Web

Authored by Jay Baage on April 2, 2007 - 10:49am.

Apple and EMI, the world’s third largest music company, have agreed to sell songs on iTunes with twice the file size and without digital rights management for a 30 cents premium. “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 EMI’s chief executive, Eric Nicoli (pictured here with Steve Jobs and Damon Albarn). This is a round-up of some of the opinions from the press and the blogosphere.

GigaOM’s Om Malik:

“This is a strategic move that puts Apple’s rivals - rival services such as Napster, Microsoft, and other major record labels on a weak footing - giving Jobs the upper hand in this high-stakes game of poker.”

CNET’s Caroline McCarthy:

“While Apple CEO Steve Jobs expresses confidence that the EMI deal will pave the way for widespread sales of DRM-free music, at least one analyst thinks that other record companies will "wait and see the proof that it worked."

Torgeir Waterhouse, a senior adviser in Norway’s Consumer Council:

“Today marks the beginning of a new era — an era where the entertainment industry works with the customer and not against them. I applaud their move and encourage all the other contenders in the digital music business to make the same important move.”

Standard & Poor’s Scott Kessler: Apple Still Strong Buy after EMI News

“Apple announces that starting in May, EMI Music's digital music will be available via iTunes without digital rights management... Apple expects more than half of iTunes' songs to have non-DRM versions by year-end. Less than two months ago, Apple CEO Steve Jobs called for music companies to sell their music without DRM. We think the proliferation of DRM-less digital music would be good for AAPL.”

Wired News Gadget Lab’s Eliot Van Buskirk:

“The world of digital music started making a bit more sense this morning, when Apple and EMI announced that the major label's music will be sold through the iTunes store without digital rights management. Apple will sell songs from EMI's catalog for $1.29 a pop in the 256 Kbps AAC format -- not quite the high-def downloads I'd envisioned, but definitely a step in the right direction in terms of both sound quality and compatibility.”

San Francisco Cronicle’s Ellen Lee:

“For years, the music labels have been wrestling with online music sharing, as consumers go online and download songs for free on peer-to-peer sites such as LimeWire. The Recording Industry Association of America, for instance, has renewed its campaign against college students downloading free, pirated music from the Web. But the deal between EMI and Apple could be a sign that the tide could be changing. EMI experimented several months ago with offering a Norah Jones track without digital rights management -- or DRM -- through Yahoo.”

Guardian’s Bobbie Johnson:

“Personally, I think we have to see this initially as a story about record labels rather than Apple. It's certainly something that EMI, keen to portray itself as an innovative, was happy to take the initiative on. Jobs, as we saw with his "thoughts on music", is under pressure to act (even if he claims its not Apple's duty to enforce this stuff), but at the same time Apple isn't quite going the whole hog - it's continuing to sell EMI's tracks as 79p downloads with DRM and lower audio quality, as well as the premium product.

And that point is certainly a backtrack from previous positions struck by Apple, where we'd heard them blast record labels for being "greedy" by wanting different pricing structures. This time around Jobs said this was a great chance for everyone to get what they wanted (more money for corporates, better product for fans).

But Jobs was certainly bullish about the way the industry would fall behind EMI, suggesting that half of all iTunes 5 million-song library would be offered in this manner by the end of 2007. That's more than just EMI, and we'll most likely see plenty of people get behind the move in the near future. Still, a few questions linger. Is this a Trojan horse for a price hike? What will sales be like? And why bother with two versions?”

Joakim Baage

Picture by EMI and WireImage.com

Related Links:
EMI Press Release
EMI to Sell Higher-Quality, Unprotected Songs on iTunes for $1.29 (DMW)

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Comments

The Day DRM Died - no -The Day the Labels Died

Submitted by anonymous (not verified) on April 3, 2007 - 7:46am.

Mark this day in your calendar - The Day the Labels Died. They have given up on protecting their revenues. The revenue from digital is a fraction of physical sales. Soon the BoD of EMI will wonder how they can afford all the people including Nicoli. Labels will not be able to support the discovery, development and promotion of talent. The Indies won't need them to aid in distribution. They will be no better than Indies with a more substantial old catalog - long tail - the value of which will more rapidly disappear. The only person that made out is Jobs. The slap in the face was Rip Mix Burn. The lunge was the iPod. The parry was his February call to kill DRM. This is the killing blow. He has turned the Microsoft strategy on its head. MS commoditized the hardware and put the value in the software. Jobs is commoditizing the software (content) in favour of the hardware.