Analyst Gartenberg: iTunes Store’s DRM-free music ‘a great win for Apple’

Apple StoreApple today announced that EMI Music’s entire digital catalog of music will be available for purchase DRM-free (without digital rights management) from the iTunes Store worldwide in May. DRM-free tracks from EMI will be offered at higher quality 256 kbps AAC encoding, resulting in audio quality indistinguishable from the original recording, for just $1.29 per song. In addition, iTunes customers will be able to easily upgrade their entire library of all previously purchased EMI content to the higher quality DRM-free versions for just 30 cents a song.

“Apple has dominated the market for digital music players not through lock-in but through product offerings that have resonated with consumers. As Apple itself has pointed out, there’s relatively little iTunes music on each iPod so this offering is not likely to tip the scales in the favor of any other player. iPods have driven customers to the iTunes store, it’s never been the other way around and it’s still the music player itself that drives sales,” Michael Gartenberg blogs for Jupiter Research.

“So what’s the net? This is a great PR win for Apple and Steve Jobs. Apple was seen as the company delivering DRM free music to consumers, a move that will only increase their overall mindshare and of course, mindshare has a funny way of becoming more marketshare. It also goes a long way to address regulators in Europe complaining about the iPod’s lack of interoperability,” Gartenberg writes.

“For other vendors in the hardware space, it will eventually remove the issue of iTunes lock in but if their sales don’t take off, it will be clear that it wasn’t lock in to the iPod economy that prevented their success. For other music sellers, the news isn’t as important. It’s not likely that subscription services will be able to allow those customers to download music without DRM and that’s the core differentiation against iTunes at the moment,” Gartenberg writes.

Gartenberg writes, “It is a good step forward for consumers but more importantly, it showed Apple at the forefront of acting as ‘champion’ for consumer interests. After all, it wasn’t Rob Glaser or Bill Gates up there with EMI.”

Full article here.

Apple iTunes

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Apple: Higher quality 256 kbps AAC DRM-free music on iTunes Store coming in May – April 02, 2007
EMI rejects Warner Music buyout bid – March 04, 2007
EMI halts talks about selling DRM-free music – February 26, 2007
Warner Music approaches EMI in possible takeover bid – February 20, 2007
Macrovision posts pro-DRM open letter to Steve Jobs and digital entertainment industry – February 16, 2007
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Monster Cable announces full support of Apple CEO Steve Jobs’ call for DRM-free music – February 13, 2007
BBC columnist doesn’t believe Steve Jobs’ Apple would stop using DRM if music labels would allow it – February 12, 2007
EMI may sell entire music catalog DRM-free – February 09, 2007
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Warner’s Middlebronfman: Jobs’ DRM-free music call ‘without logic and merit, we’ll not abandon DRM’ – February 08, 2007
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32 Comments

  1. An interesting point. AAC is an open format. So, these un-DRM’d tracks can be moved to any player that works with AAC. (Many do) This could free Apple from future issues from Europe about opening up iTunes.

  2. Well I’ll be dammed

    Now of course comes the question “Will Apple allow other music players to work with iTunes?”

    Because if this DRM free/higher quality trend continues (oh yea baby) that’s the next move.

    Then of course comes the shutout by other online music stores. “Our MP3 player doesn’t work with iTunes”

    And then Apple’s monopoly falls.

    Do you think?

  3. @WiseGuy

    The individual MP3 players may not be compatable with iTunes, but that software should be their own problem. The music files are stored on the computer and can be dragged out of iTunes easily.

  4. 256 is a bit big for my liking, I prefer to keep my music at 160 for personal use because it gives a good compromise between sound and size when stored on smaller iPods. I know I could re-encode them down to 160 but it won’t be the same. Lossless would have been nice. Or 160 for DRM’ed files.

  5. Hey, the higher bit rate thing is even better than the DRM free (though that’s nice too). I’ll DEFINITELY be updating all my purchased EMI songs to the higher bit rate. I hope the iTunes store can make me a list of EMI songs I’ve purchased as I never pay attention to labels when I buy…

  6. @WiseGuy
    What are you babbling about? These songs will be unprotected AAC, so you’ll be able to import any iTunes bought song in that format into any music player that can handle it. Since unprotected AAC is a standard, non-proprietary format (like mp3), many other music players can handle it. And any company dumb enough to sell players that can’t handle it can remedy that fairly easily. This will all be true immediately in May, not “eventualy”–and I predict Apple’s marketshare in the music biz will actually go UP, not DOWN, proving “lock in” had nothing to do with Apple’s success.
    MW: “moved”–Jobs just moved the entire music industry in a very positive direction.

  7. “So what’s the net?”

    The net, also known as the inter-web, consists of millions of tubes leading into and away from calculating machines, some in people’s homes. These calculating machines are popularly known as “computers” because they can compute numbers, much like an adding machine does. (And like an adding machine, “computers” also can subtract, multiply and divide.) These tubes allow such calculating machines to “talk” to each other.

    Though the term “talk,” as an analogy, helps explain the phenomenon, it is more akin to transferring of content. Each calculator can send to another calculator its contents, and each calculator can receive these contents from another calculator.

    Some calculator contents, however, can plug up the tubes. This can be avoided if the calculator’s owner pays a bit more for wider tubes that help prevent this. As well, wider tubes transfer contents more quickly. This, of course, also means the subscription prices for wider tubes are more expensive than the subscription prices for narrow tubes.

  8. yeah wiseguy, cause it is iTunes that is the lock in. most people are buying iPods and then going to the iTunes store because they love iTunes so much. if only that worked with other players then Apple would fall!

    oops, sorry , forgot to close my sarcasm tag…. </sarcasm>

    it is always nice to know that reality doesn’t interfere with a bad argument.

  9. I think not. Apple is not a monopoly. It’s not forcing people to but into the itunes/ipod system. It’s popular by the overwhelming choice of people. At any moment the
    majority can switch to a WMP and use a Rio.

    Anyone is free to use Creative or Zune and import their CD’s into the alternative player.

    There is no consumer friendly alternative to Windows. It’s locked in because MS will not let you use an alternative program to open Office programs. Why aren’t people as angry at the MS monopoly. What’s mom and pop supposed to do?

  10. MXNT41: Yeah, and it would be nice if Apple could send over Natalie Portman to blow you at the particular time and location of your choice, with a cup of hot chocolate for when you’re done. Heated to exactly 151 degrees. Life is a constant struggle.

    Investor: You don’t think the Europe iTunes lock-in bitching, EMI “discussing” going DRM free, and Apple calling for DRM music all around the same time a couple of months ago was a coincidence do you?

    Wiseguy: On an iPod music files are stored under iTunes-generated file names and directory structure in a hidden directory. On the computer, though, the files are not hidden, are assigned with whatever name the user has given the files, and are stored in an obvious and transparent directory structure. For non-DRM files other players don’t need to work with iTunes–whatever software they package with their player can access iTunes’s file structure directly. Same with other music stores–the downloaded music on my iPod and in my iTunes library isn’t from iTMS–it is from emusic.

  11. Just for those questioning Apple and their iTunes with other players,

    iTunes already works with other players. Go ahead and try it if you have a creative player. You can put any drm-free music on it with no hassle at all from iTunes.

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