Manage updates with the Download AppMay 31, 2007 4:00 AM PDT
Will music industry dance again to Apple's tune?
- Related Stories
-
iTunes goes DRM-free with EMI
May 30, 2007 -
Apple, Amazon may hold future of DRM-free music
May 17, 2007 -
Microsoft sees DRM-free music in Zune's future
April 4, 2007
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."
See more CNET content tagged:
EMI Group Plc., music industry, digital-rights management, Apple Computer, digital music
46 comments
Join the conversation! Add your comment
I suppose it didn't count when THEY did it, because it wasn't coming from the RIAA.
Perfect example: <a class="jive-link-external" href="http://werkshop.com" target="_newWindow">http://werkshop.com</a> (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.
purchased from iTunes. And you're never "forced" to upgrade at all.
Sorry, but your FUD won't cut it here, Bill.
complete FUD. Anyone who is concerned can check it out for
themselves.
That's not how it works at all. The iTunes music store has a
record of your purchases and will let you upgrade those songs
you have purchased that are now available in the DRM-free,
higher-bitrate versions. IT DOES NOT SCAN YOUR LIBRARY!
Stop lying.
I've ripped hundreds of CDs into iTunes, but there is only one
song I bought from the iTMS that is now available DRM-free, and
that is the only one that iTunes tries to upgrade.
My only complaint with the upgrade option is that it is all-or-
nothing, where I can imagine wanting to upgrade only certain
songs. Still, I understand why they do it this way, since credit
card transaction fees would be a huge proportion of a bunch of
single upgrades.
"...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."
<br>
<a href="http://arstechnica.com/news.ars/post/20070530-apple-hides-account-info-in-drm-free-music-too.html">http://arstechnica.com/news.ars/post/20070530-apple-hides-account-info-in-drm-free-music-too.html</a><br>
<br>
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!!
Is it ethical for someone who doesn't own any right to the music to be able to send out copies to anyone savvy enough to download a Torrent software and file? In the days of bootlegging hand-made goods, a pirate was marked when caught in the illegal act of bootlegging, why shouldn't the same happen to people dumb enough to post something they registered for? Now, if someone registered for it and someone else took it without their consent and posted it, I can see it as unfair. This once again shines light on how wrong it is for someone to STEAL anything. You not only hurt yourself (with karma or what you will) but you involve a person who went through the legalities and HAD TO PAY FOR IT.
I believe we pay for possessions not because we like it but because the money compensates a good percentage of the people involved in making our goods.
You wouldn't go into a furniture store and ask the maker to TORRENT the goods he makes. I can see how a world of this would run, you'd have couches built half-heartedly with no matching parts, beds ridden with viruses and broken parts.
You're paying to insure quality and a future for commercial enterprise. Every company started as one casual group that struggled to make profit. Don't begrudge the monsters we all created and continue to create. Man is creator and consumer.
discussions from day one so that you know who made the initial
move. Let us do give credit where credit is due. Both companies
took a bold step here. Apple for taking a stance that music
should be DRM free and EMI for deciding that it was worth a try.
Now if people will actually take advantage of this and actually
purchase DRM free music instead of pirating it EMI just might
find the deal to be very profitable. If they do then the rest of the
industry will have to follow suit.
free. They deserve credit, no doubt.
To be clear on the history, however, one need only go back to
the press conference where the deal was annonced. There, EMI's
CEO was asked a question about the origins of the decision:
"Q: It's a pretty radical step, Eric. How did you reach the decision
to do it? Was it Steve Jobs' letter that convinced you? Was it the
internal surveys you've done? What was the moment in which
you said, 'Damn it, we're gonna go DRM-free?' And will the extra
sales be enough to compensate for the declining physical sales?
"A: We've always known Steve's view on the subject, long before
his open letter. "
Jobs, as it has been reported elsewhere, has long pushed the big
labels to go DRM-free. He told them from the very beginning
that DRM systems would always be broken.
The full transcript of the interview can be read here:
<a class="jive-link-external" href="http://www.appleinsider.com/articles/07/04/02/" target="_newWindow">http://www.appleinsider.com/articles/07/04/02/</a>
jobs_talks_new_itunes_functions_drm_and_video_ipod_storage_t
ranscript.html
Robert
<a class="jive-link-external" href="http://www.buzzdash.com/?page=buzzbite&BB_id=19196" target="_newWindow">http://www.buzzdash.com/?page=buzzbite&BB_id=19196</a>
<a class="jive-link-external" href="http://ad-supported-music.blogspot.com/" target="_newWindow">http://ad-supported-music.blogspot.com/</a>
If it's not worth more to you, you still have a choice!
Personally, I'd pay $2, or even more, for a non-DRM song! Usually, I buy the whole freekin' CD! I've never downloaded anything from iTunes, mainly because of the DRM.
It's not clear that Apple is making more money of these... We don't know how much more EMI is charging Apple. Hopefully EMI and Apple will make tons of money on this experiment, and the other labels will be forced to join in!
The new product (256 w/o DRM) is available for 30 cents more.
Or you can buy the new product as an entire album for the same price as the old product.
I have a feeling keeping it in AAC and not offering MP3 will hinder sales.
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!
Further, the music business is broken. Bands on indie labels are just about the only ones creating quality music. The major label do nothing but put out prefabricated crap.
This will not kill them off, even though they deserve it. What Apple should do is start promoting quality music and spotlight it.
70's standards were vinyl disk and power amps, with big speakers.
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.
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.
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.