Apple’s DRM-free EMI deal ‘a master stroke that should cement Apple’s dominance’

Apple Store“Apple’s deal to put the EMI music catalog on its iTunes store without antipiracy software is a master stroke that should cement Apple’s dominance — and could lead the change in how most consumers get their music,” Priya Ganapati reports for TheStreet.com.

Ganapati reports, “The lack of restrictions and the higher-quality sound could potentially make iTunes the clear choice for music distribution, as users get rid of the intermediary step of buying CDs from retailers and ‘ripping’ tunes onto their iPod.”

MacDailyNews Take: Users were already eschewing the practice of buying CDs and ripping them via iTunes and the iTunes Store was already the clear choice for legal online music distribution before yesterday. Apple’s DRM-free, higher quality deal with EMI (and the others sure to follow) will only accelerate what was already taking place.

Ganapati continues, “By opening up the iTunes system, Apple has turned itself into the most important link in the music distribution business and has turned up the heat on subscription-based digital music rivals… Apple expects about half of the 5 million songs currently on iTunes to be offered DRM-free by the end of the year.”

MacDailyNews Take: Like Apple needed to turn up the heat. The subscription outfits were already baking to a crisp in a blast furnace simply because they are trying (and failing) to offer something designed mainly to extract recurring revenue, not to fulfill consumer’s desires. People want to own music, not rent it.

Ganapati continues, “For Apple, this move could signal the next evolutionary change in the iPod/iTunes empire.”

Full article here.

[Thanks to MacDailyNews Reader “LinuxGuy and Mac Prodigal Son” for the heads up.]

Related articles:
In Apple’s DRM-free EMI music deal, the big loser may be Microsoft – April 03, 2007
Apple’s DRM-free iTunes play trumps Microsoft’s huge bet on DRM – April 02, 2007
Norwegian Consumer Council senior advisor applauds Apple’s iTunes Store DRM-free music – April 02, 2007
CNBC video: Apple CEO Steve Jobs and EMI Group CEO Eric Nicoli – April 02, 2007
EMI’s Nicoli on DRM-free iTunes: ‘We have to trust our consumers,’ Apple’s Jobs: ‘right thing to do’ – April 02, 2007
Kudos to Steve Jobs and Apple for having courage to call for end of DRM and making it happen – April 02, 2007
Analyst Gartenberg: iTunes Store’s DRM-free music ‘a great win for Apple’ – April 02, 2007
Apple CEO Steve Jobs to appear live on CNBC within the hour – April 02, 2007
Apple: Higher quality 256 kbps AAC DRM-free music on iTunes Store coming in May – April 02, 2007
Warner’s DRM-loving Middlebronfman warns wireless industry it may lose music market to Apple iPhone – February 14, 2007
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
Recording Industry Association of America wants their DRM, calls for Apple to license FairPlay – February 08, 2007
Warner’s Middlebronfman: Jobs’ DRM-free music call ‘without logic and merit, we’ll not abandon DRM’ – February 08, 2007
Technology Review editor gets a lot wrong in his article about Apple CEO Jobs’ push to end DRM – February 07, 2007
Apple’s Jobs jolts music industry; Zune exec calls Jobs’ call for DRM-free music ‘irresponsible’ – February 07, 2007
Apple CEO Steve Jobs’ posts rare open letter: ‘Thoughts on Music’ – calls for DRM-free music – February 06, 2007

27 Comments

  1. Give me a choice.

    I want to own my music. But sometimes I want to rent music too.

    Songs I love I want to own. But if I could rent music too, then I would discover new music I never knew exsisted.

    Sometimes I go through different phases of music I want to listen to. I will admit there are times I like rap. There I said it. But I don’t want to buy a lot of crap. I don’t know enough about the genre to make good buying decisions. So I would like to rent a whole bunch of unlimited rap for a month and learn who I like and what I like. Then I would make purchases from what I liked.

    I don’t see what is so wrong about offering both purchase and rental options.

  2. It is a master stroke. Here’s the timeline: the increased price point will all go to the label. This is more in line with album prices (1.30 x 10 = 13.00) and this will entice the other labels to follow suit as it increases their profits by 30 percent. It also gives Apple leverage with the EU, being able to say that they’ve taken every pro-active step they can, and its now up to the other record labels to join in.

  3. renting music is stoopid, this move could also help apple in getting people to use itunes to catalogue there music even if they own a different mp3 player, so when they update, they have more of an incentive to get an ipod, or even an apple tv, as the infrastructure is already there

  4. Brilliant! Just think how it will look in iTunes when a bunch of songs have two quality choices while others only have the lower quality. It will make those artists look bad for not offering the higher quality.

  5. The reason the Labels demanded DRM for iTMS is to carefully control the amount of online sales as not to disrupt the cd sales.

    DRM has absolutely no other purpose because we can already rip cds or strip off the DRM.

    So now that we got to the root of the problem, and online music sales have proven themselves, it’s time the rest of the Labels open up their music and sell them DRM free just like they do cds.

    The ‘brick and mortar’ shops will sell the same amount of cd’s regardless to non-computer using folks.

    It’s time that online folks get the same quality experience as cd’s and not be discriminated against.

  6. Agree with you, MegaMe

    I just ponied up $10/mo to support a local Jazz station (their annoying fundraising drive ended just last week). Somehow, $15/mo for a huge selection of songs doens’t seem like such a bad deal.

    All our “owned” music was just rented anyways, in the sense that technology always made it obsolete and you had to re-purchase it in the new format (Wax cylinders, LPs, 8-tracks, Cassettes, CDs).

  7. Above all the shouting yesterday I came away with a couple of things that i have not seen refuted. First, this is not an exclusive iTunes deal. I’ve seen nothing that mentions any exclusivity. I believe EMI said it was going to shop their catalog everywhere. Second, AAC is simply the encoding method Apple chose, EMI couldn’t care less what method or bit rate is used. If Wal-Mart wants to pick this up and encode them as unprotected 320K WMA files I’ve seen nothing in yesterday’s press releases or statements by Apple/EMI that would prevent this.

  8. Tom,

    You are correct and this is to the benefit of the consumer as well.

    Theoretically, there is now nothing to stop a smaller “boutique” operation opening to deliver 256kbit AAC files or 256 MP3 of a smaller catalog, but potentially using a better AAC encoder (I know of one or two myself) that it has either developed itself or bought in from the outside.

    This could mean that a company like Sonos or Hifidelio, whose hardware operations probably run at similar levels of profitability to Apple, could create competitive on-line music stores focussing on jazz, classical, opera or whatever and effectively ship the music out to their customers at very low margins of profitability.

    I can see audiophile stores opening as well as stores which offer the same audio fidelity as Apple’s 256 offering at lower bitrates, thus increasing their suitability for iPod users.

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