Will music industry dance again to Apple's tune?

A correction was made to this story. Read below for details.

news analysis Apple has plunged into uncharted waters by stripping security software off some of its music.

Never before has Apple sold songs without attaching antipiracy software--the digital rights management systems that prevent file sharing and are hated by many music fans. If successful, Apple's bold gamble to do away with digital rights management, or DRM, could act as a whirlpool that sucks the rest of the music industry into DRM-free music, say analysts.

Apple on Wednesday began selling unprotected songs from record label EMI. Shoppers have the option to purchase either a 256kbps AAC-encoded DRM-free song for $1.29 via iTunes Plus, or the usual 128kbps AAC-encoded DRM version for 99 cents.

The move is important on many levels. For the first time, consumers can play music from Apple's iTunes on digital players other than the iPod. For Apple, offering DRM-free songs could hand the company some credibility in dealings with European regulators, who want the company to open up iTunes to third-party hardware makers.

For the record industry, it once again may find itself being herded into a direction of Apple's choosing. In this situation, the record companies can only benefit, said Greg Scholl, president and CEO of The Orchard, a New York-based music distribution and marketing company.

"The only way we're going to discover the right way to grow the market is by experimenting," Scholl said. "I think the price Apple is charging is still too high and will probably inhibit (sales). But right now there isn't enough data to know what the right pricing is or how to market digital music. At least Apple is trying something new."

It's important to note that the music being offered without copy protection by Apple and EMI represents only a fraction of the most popular music.

The majority of Apple's 5 million songs still feature Apple's FairPlay DRM scheme. EMI is the only one of the four top record labels to release unprotected music. The other four account for 70 percent of the world's music. While Apple said it expects half of its music to be available on the site without DRM, most of it likely would be the millions of songs iTunes offers from independent labels.

A low-key launch
Curiously, Apple didn't exactly ballyhoo the new service. The company on Wednesday placed an advertisement on iTunes' front door amid a handful of other promotions. Customers must also first upgrade to the latest edition of iTunes in order to obtain EMI's unprotected songs.

That DRM-free music wasn't promoted heavily worried Scholl.

"I would think that if you're a major label and you don't want something to work, the best plan would be to hide it," Scholl said.

Even the staunchest DRM proponent must recognize that copy-protection software is losing some momentum. Two weeks ago, Amazon.com--the fourth largest distributor of music online--announced that a new digital music store due to open soon would also feature unprotected music. Industry insiders told CNET News.com that they expected other top e-tailers to soon try out DRM-free music.

Even Microsoft is following Apple's lead. Immediately after CEO Steve Jobs issued his February letter calling for an end to DRM, Microsoft said the total abolition of such protections would be irresponsible since they are needed for subscription music and other new business models. But the company reversed itself in April and announced plans to offer DRM-free music from EMI and others.

What Apple has succeeded in doing is to raise questions about how the music industry is pursing its digital music strategy, said Susan Kevorkian, an IDC analyst.

Chief among the questions is why the record labels place copy protection on digital songs but not on CDs.

"CD specifications never included native content protection," Kevorkian said. "New CDs purchased today aren't protected either so there's been this inconsistency in the music industry's strategy. When you have an unprotected CD, you can rip songs to MP3s and do with them what you want. We think that by pursuing a more consistent digital strategy the potential is there to reach more consumers."

The record industry has said in the past that placing copy protections on CDs is expensive. The format was developed long before the digital age or the "consumer-oriented Internet" emerged, said one record executive who asked for anonymity because she was not authorized to speak for her company.

Regardless, Apple's DRM-free offering shows how easily the company can put the record industry on the defensive. What happens if DRM-free music on Apple becomes popular?

Kevorkian suggests the music industry start worrying less about fighting piracy and more about profiting from downloads.

"They can try new strategies around prices and marketing, particular to older buyers," Kevorkian said. "There are different paths to go down to drive music sales and those paths are better than what we've seen to date."

 

Correction: This story misidentified the DRM-free format Apple is selling. The songs are on AAC.

[DraconumPB]

Apple trying something new?

What about all the artists, labels, and distribution sites that have never distributed their music with DRM in the first place?

I suppose it didn't count when THEY did it, because it wasn't coming from the RIAA.

Perfect example: http://werkshop.com (Nettwerk's online store). You can buy $0.88 MP3's without any sort of DRM, from pretty much any Nettwerk release. And they're technically outside the RIAA, but not as indie as some other labels out there - they have many hit commercial artists (Delerium, Sarah McLachlan, Barenaked Ladies, etc.)

They've even made a mission statement out of NOT suing their fans.

They are a model for the industry, if you ask me... screw EMI, and Apple. It's all a PR stunt if you ask me.

[mikebegert]

Here's the catch, of course...

If you have mp3's in your itunes library that you acquired in other ways, apple flags those for upgrade also, forcing you to re-purchase the non-DRM music that you already have if they have new, non-DRM copies. I knew they would try that, nice rip-off job, Jobs...

[JosephSukhbir]

iTunes Plus also includes Music Videos

I just purchased a music video that had a + next to it and lo and behold, it has no protection. I even managed to transfer it to my phone.

[laxmanchip]

Easy audit point for RIAA!

Quote from link below regarding Apple's DRM-less files:

"...songs sold without DRM still have a user's full name and account e-mail embedded in them, which means that dropping that new DRM-free song on your favorite P2P network could come back to bite you."


http://arstechnica.com/news.ars/post/20070530-apple-hides-account-info-in-drm-free-music-too.html



The RIAA will have a field-day simply scanning P2P networks and Torrent sites for DRM-less AAC files now and coming back and nailing the fool who uploaded it there! I'm sure Apple would quickly hand-over any other "confidential" account information when the RIAA knocks on their door!!

[wcuthber]

DRM-free AACs are still AACs

Perhaps once the DRM issue has gone by the wayside, we can talk about what an aurally sub-par codec AAC is - even with the net 256-kbps bit rate, the DRM-free AAC files sound muted and flat.

[Pixelslave]

Get the fact straight, it's EMI's bold move, not Apple

It's amazed how people distort this piece of news. It's a bold move of EMI, not Apple. EMI approached Apple to offer DRM-free files, not the other way around!

[Heebee Jeebies]

Go Apple!!!

Go Apple force those greedy suckers to do what's right. DRM Free!!!!

Robert

[anywhereman]

Should consumers pay premium DRM-free?

This feels like an issue for the industry to work out rather than putting it on consumers. A price premium to regain the flexibility we once had is a bit annoying, and it looks like I'm not alone...

http://www.buzzdash.com/?page=buzzbite&BB_id=19196

[Marc Cohen]

Its all about raising price

The movement away from DRM is really all about raising the price of a track. Notice that now iTunes makes the higher price, DRM track the default selection when there is a choice. Check out the Ad-Supported Music Central blog:
http://ad-supported-music.blogspot.com/

[Joeyp770]

DRM Free Music

Apple is profiting by not protecting music. Itunes should just remove the DRM off all of the music. I bet they would have more buisness if they did. Microsoft should wipe the floor with Apple and come out with a music service that does not have DRM.

[bobby_brady]

But I can only play DRM free on Ipod? Won't work on Zune?

Unless I convert the AAC to mp3. I could have done that by burning it to CD.

I have a feeling keeping it in AAC and not offering MP3 will hinder sales.

[lkrupp]

Always the critics...

The iTunes Music Store has sold literally billions of individual
songs and albums yet is a complete failure in the opinion of the
pseudo-audiophiles and pseudo-marketing experts who claim
to know how it SHOULD be done.

I'm laughing my arse off reading the drivel contained in this
story thread. I especially chuckle at the ones who solemnly
swear not to buy anything unless and until the world conforms
to their wishes.

Keep it up. This really funny stuff!

[pete anderson]

destroying whats left/pete anderson/littledog records

just another step in deconstructing the music bz. when this is left up 2 the amateurs...u think music is bad now just wait....they should never have allowed subscribers....if u have a library card & can give away anything u like 2 whom ever u choose what is left ....they just keep carving into the retail sales dominion....apple has enough $...& emi has already done enough damage 2 the bz. w/the music they sign & promote...if u don't allow people 2 subscribe & they have 2 purchase from urr site only..while only hearing 30 seconds of a few tunes....then u can control the price point.(supply & demand)..the only people posting or trading urr material r people who have stolen from u...these peolpe r morons & should b not allowed near the arts...

[beefygoblin]

What they still don't seem to comprehend - 16 bit sucks

ONE DOLLAR FOR A LOSSY FORMAT???? Not only that, but its low quality all around, under 300 kbs, and with severe morphing of high range sounds as well as lows. You can download free concerts in 24 bit flac file (sometimes monky audio) from archive.org already, and you want to charge me what for a degraded copy of some pop studio recording... where do you get your weed man. Atleast give us 16bit apple lossless files, cd quality or bust. Oh and incase your having trouble playing those 24 bit files on your computer, just stop trying to use that new version of winamp and get yourself a foobar player, then go under options and tell it to keep lossless files at orriginal depth. Don't buy anything untill they raise the quality of product to atleast 70's standards.DRM killed the sacd, it killed the dvda and its going to kill bluray and hddvd. Don't bother spending anything on these products, its like investing in betamax.

[osxxp]

DRM Removed But "Watermark" Added

Per story in same issue of c|net news. The supposedly DRM free
new service places your name in the music file. So instead of DRM
hassles Apple/EMI have a way to see who "shared" the music. Hope
your song doesn't get away from you since your ID in the music
could be spread to thousands of people if it gets used on a P2P
website.

[reggy6654]

Industy wants is fighting to keep the Green Card whip

Industy wants to keep control of the Green Card.

Industry has come out against the current immigration bill, because this bill takes away the Green Card whip that industry has wielded, for decades,like a sword of damacles on their immigrant employees.

Currently an employer must start and complete the Green Card application for an employee wanting to stay in the United States. If the employee changed jobs before completion, the employee would risk losing the green card.

The Immigration reform bill would put control of the Green Card application in the hands of the people, and award green cards on the basis of merit (not employer loyalty). Merit such as learning English, learning a skill... things that almost all U.S. citizens agree an immigrant should possess.

Industry is very afraid of the current bill, this bill would remove the whip that industry has wielded for years against an employee changing jobs. That inability to strike, walk-off-the-job, change-jobs, look for a better job, is what makes foreign labor so attractive to industry in the United States.

I urge everyone to write their senators and tell them NOT allow any amendment that puts the shackles back on people immigrating to this country. People should be free to choose their employer, and not be indentured to their employer in order to become citizens. There are ammendments being proposed by a group of SPECIAL-INTEREST only senators, that would keep the shackles on.

I urge you to write you Senator (or future senator if you are working on become a citizen) and tell them that you oppose any such ammendment. Keep control of your future here, and help others to keep control over theirs.

[GreenSmudge]

Great

I think this would be great - however I realize this comes with responsibility on the part of the consumer. Do I get my music and give it to my friends? Heck no. I like the freedom of moving my music around. Just recently the wife had me move 350 of her music CDs onto our house server so she could listen to her music anywhere in the home - from her laptop, iPod, or from the xbox 360 media center - now with the addition of this DRM free music - I can move those tracks onto our house network. I love it! I give thanks to the music industry for opening up a little. I realize they are entitled to their money - but as a consumer - I am entitled to play it anywhere.

Now if I can do the same with my movies, I would be thrilled. I could care less if they embed my name in it, my email address, and my whatever else they can think of - I want it for myself - watch movies on my own laptop, it would be nice to turn on the TV and scroll my movie library and play a movie I OWN that I put onto my home network. People who rip off the music / movie industry should be ashamed.