Universal Music tests sale of DRM-free music; excludes Apple’s iTunes Store

“Universal Music Group said Thursday it will sell digital music… without the customary copy-protection technology [DRM] for a limited time,” Alex Veiga reports for The Associated Press.

Tracks from thousands of albums will be available for purchase on the recording artists’ Web sites and through several established online music retailers, although Universal is excluding Apple Inc.’s iTunes store, the No. 1 online music retailer,” Veiga reports. “The songs, however, will play on Apple’s market-leading iPods, as well as the slew of other devices compatible with the MP3 format.”

“The test by Vivendi SA’s Universal Music Group, while only encompassing a portion of its catalog, is significant because Universal is the world’s largest recording company. That raises the prospect that other major labels could follow,” Veiga reports.

“Universal Music spokesman Peter LoFrumento said… that the company isn’t selling DRM-free tracks on iTunes for now so it could use the Apple store as a control group for measuring the impact on pricing, piracy and sales,” Veiga reports.

“Universal Music will make DRM-free songs available Aug. 21 to Jan. 31,” Veiga reports. “Among the online retailers that will be selling the tracks are Amazon.com Inc., Google Inc., Wal-Mart Stores Inc., Best Buy Co., RealNetworks Inc.’s Rhapsody, Transworld, PassAlong Networks and Puretracks Inc., according to Universal. The retailers are expected to sell the tracks for 99 cents and in a variety of bit rates. Universal will be offering the tracks in the MP3 format, but the retailers will be free to sell the tracks in any DRM-free format they choose.”

More in the full article here.

Jeff Leeds reports for The New York Times, “The effort is likely to be seen as part of the industry’s wider push to increase competition to iTunes and shift leverage away from Apple, which wields enormous influence over prices and other terms in digital music. A month ago, Universal notified Apple that it would not agree to a new long-term contract to sell music through iTunes.”

“So far, only one of the four major music companies, the EMI Group, embraced a wholesale shift away from the usual approach. EMI, which releases music by artists like Norah Jones and Coldplay, first struck a deal with iTunes in which songs without copy protection (and with better audio quality) would be sold at a higher price — $1.29 instead of the usual 99 cents for the restricted songs,” Leeds reports.

Full article here.

Jupiter Research analyst Michael Gartenberg blogs, “The handwriting for DRM is on the wall. Universal is using this to clearly poke Apple with a sharp stick… The question is will Apple customers go through a little more effort to get their content in DRM free format and start dealing with other music vendors. DRM meant that music players would drive customers to the music store that works with it, DRM free content that everyone EXCEPT Apple has can potentially change that dynamic for the first time.”

Full article here.

[Thanks to MacDailyNews Readers “Edgy” and “Ken” for the heads up.]
Make no mistake, this is Universal’s attempt — a rather weak one at that — to artificially prop up also-ran online music outfits that could not compete on a level playing field against Apple’s iTunes Store. So, Universal will try to tilt the field a little. Universal — and most of the rest of the music industry — fears Apple’s rapidly intensifying power. The fact is, Apple’s iTunes Store was responsible for close to 15% of Warner Music’s revenue last quarter (see related article below).

Universal is treating their iTunes customers like lab rats in an experiment. They want to see what, if anything, they can squeeze out of Apple CEO Steve Jobs (remember, they dream the impossible dream of iPod royalties every night).

By the way, this “control group” nonsense is just that: nonsense. If you want to test out how DRM-free music sells in relation to your DRM tracks, just do as EMI did and sell them via Apple’s iTunes Plus. Sell DRM’ed and non-DRM tracks side-by-side. That’ll tell you all you need to know. The “control group” is just B.S. cover for Universal. They want their DRM-free music sales to fail.

So, what do you think, will Universal be able to dent Apple iTunes Store’s dominance with this little stunt? Will Apple do anything to retaliate?

We’d love to see Apple begin to eliminate the Middlebronfman.

73 Comments

  1. The thing about EMI’s deal with iTunes is that you know what you’ll be getting: high quality DRM-free tracks that have been mastered and optimized using the AAC codec.

    It sounds as if Universal is just turning their music over to these also-rans and letting them put it in any format (and bit rate?) they want. How can you be guaranteed quality if these tracks aren’t mastered from trustworthy sources?

    And even if that weren’t an issue, I really don’t feel like going through the trouble of turning all of my credit card and identity information over to another online music store. I want to buy my tracks from iTunes because I trust Apple and we’ve had a good thing going for a long time now.

  2. One question – so how do you go find and keep track of all of these also ran online music stores, band websites, and other places here and far on the web?

    I know… google, but who wants to? And as stated above, give them all your credit info? no way – too many crazies as it is out on the net.

  3. I’m more interested in Apple’s response, as I am 100% certain this stunt by Universal will have absolutely no impact whatsoever on iTS.

    It would be like a fabric softener brand offering cheaper prices at the corner liquor store to try to stick it to WalMart.

    Good luck with that Universal.

  4. “…the company isn’t selling DRM-free tracks on iTunes for now so it could use the Apple store as a control group…

    “…Among the online retailers that will be selling the tracks are Amazon.com Inc. (AMZN), Google Inc., Wal-Mart Stores Inc., Best Buy Co., RealNetworks Inc.’s Rhapsody, Transworld, PassAlong Networks and Puretracks Inc…”

    Control group MY ASS!!! Sounds like bullshit leveraging to me!

    I can’t wait to upgrade my low quality iTMS DRMed for high quality music to play on my upgraded stereo system.

    Finally with DRM free music in high quality I’ll be able to adjust the gain and other things on my compilations without having to resort to lossy burn/rip MP3 bullshit.

    It’s annoying to hear one sound low in gain adn then the next one blasts your eardrums to butter.

  5. The only people who will go to the trouble (or have the knowledge) to get tracks somewhere else, then put them in to iTunes are the people who pirate music in the first place. If they can get it for free somewhere else, why pay for it?

    MW: “former” as in Universal is the former largest music label. Its hey day was during the era of the compact disc.

  6. Well, Universal.drop dead. I won’t be able to buy music from the iTunes Store?

    Then, my choice is I’m going to look for Universal music on used CDs. That way, not only do I get my music cheaper, you bums don’t get a penny of it!

    You screw ITMS to spite Apple? SCREW U(niversal)!

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