Wired: Thank Apple for Amazon’s DRM-Free MP3 music store (and watch out for those watermarks)

“Amazon’s Tuesday launch of a DRM-free music store with some 2 million tracks represents the music industry’s clearest repudiation yet of the elaborate copy-protection schemes it once staked its future on. And though it may not be obvious at first, it’s Apple we have to thank,” David Kravets writes for Wired.

“Edgar Bronfman, Jr., the Warner Music Group chairman, told Goldman Sachs investors in New York last week he was considering removing DRM from Warner’s music downloads — this just months after suggesting Warner would never abandon DRM. He blamed Apple for the apparent change of heart. ‘We need some online competition’ for Apple’s iTunes Music Store, Bronfman said. He conceded the iPod is ‘the default device’ and iTunes the ‘download model,'” Kravets reports.

MacDailyNews Take: Steve Jobs toys with the Bronfman’s of the world like a cat with a mouse. Watching these fools play right into Jobs’ hands is entertaining.

Kravets continues, “The self-created headache for the industry is that the highly popular iPod and new iPhone only play music protected by Apple’s proprietary FairPlay DRM solution or music that isn’t protected at all. And Apple chairman Steve Jobs has repeatedly balked at licensing FairPlay for use on competing download services or devices. That meant music companies had to choose between using iTunes or going DRM-free. The industry stood by and allowed most of its music-download sales to come from Apple. Recognizing opportunities lost to Apple’s dominance, the music industry is moving toward throwing DRM overboard in a bid to open up new retail markets and promotional opportunities.”

“Even if DRM’s days are numbered, that doesn’t mean the music industry is abandoning technological weapons in combating piracy. Amazon confirmed Tuesday that some of its music downloads contain digital watermarks [which] allows companies to silently brand music files with identifying information, such as customer- and vendor-identification numbers, digitally woven into the fabric of the song. Those hidden patterns allow music companies to track the origins of music that show up on peer-to-peer sharing sites… watermarks can raise privacy and liability concerns, because a person could be charged for copyright violations if the music appears on file-sharing networks, even if the consumer did not put it there,” Kravets reports. “Of the two major labels participating in Amazon’s music-download service, Universal Music Group uses watermarks, and EMI — for now — doesn’t.”

Full article with more about what Steve Jobs has allowed Middlebronfman to think today here.

[Thanks to MacDailyNews Readers “RadDoc” and “Michael” for the heads up.]

MacDailyNews Take: As we wrote this morning, approximately 3.5 hours before this Wired article appeared online, “Users who like this Amazon store can thank Steve Jobs; it’s due to his call for DRM-free music that this even exists. It’s past time that the other music labels who are still clinging to DRM (cough, Middlebronfman, cough) face the music.”

And, as we just finished writing, “Amazon’s store was created by Steve Jobs. Because he wants more stores to sell iPod-compatible content (as long as Microsoft and their DRM is not involved), so he can sell more iPods. He did not want the responsibility of licensing FairPlay to a broad range of licensees, and upholding the integrity of the DRM as called for in contracts with the music cartles, so he did even better by calling for and precipitating the end of DRM itself… Steve Jobs doesn’t much care if you buy tunes at Amazon or iTunes, as long as you don’t buy something encoded with Microsoft DRM and as long as you play it on Apple hardware. It’d be nice if you used iTunes Store, but it’s not essential to Apple’s success.”

47 Comments

  1. I don’t get this at all. If memory serves me right, it was iTunes that introduced the world to DRM free music with its limited selection of EMI music. This was done at a price of US $1.29 per individual track. The next thing you know, Universal is pitching a fit about iTunes domination, their indecent contract with Universal, and how Steve Jobs and iTunes have too much control over the nascent music download market. One of Universal’s biggest gripes was Apples refusal to bow to differential pricing. Now they (and other labels) have pretty much released all their music in a DRM free format at US$0.89 – $0.99 per track. Is it just me, or did the labels blow a golden opportunity to sell their music at a higher price through iTunes if they had agreed to sell DRM free for US $1.29. By establishing the defacto price of DRM free music at a higher price than the DRM crap, the labels could have still sold all the DRM free music they wanted through any download outlet for more money than they are getting now. Of course, they’re likely lowballing Apple to break it’s market share. I still think they had no vision, however.

  2. “Watching these fools play right into Jobs’ hands is entertaining.”

    Sure, right into Apple’s hands by eliminating Apple as a middleman in music sales, and selling music not locked to Apple’s devices.

    Getting them to create a world which doesn’t need Apple to be involved anywhere in the process is pure brilliance on Steve’s behalf.

  3. Absurd, “recognizing lost opportunities”? If your competing service isn’t way better than iTMS, why have it? They are actually competing against themselves without benefit! Giving a new startup like Amazon cheaper prices than Apple so Amazon makes the sale then transfers the song back into itunes where you coulda bought it in the first place is . . . pointless. Also, Amazon’s interface is a chore. I have found massive amounts of new media simply because iTMS streamlines music, podcasts, movies, TV shows, and movies into one cohesive interface. iTMS helps you find new media, and a growing portion of the public doesn’t listen to the radio, or watch TV, yet somehow finds the best new stuff consistently. Amazon is simply doing what they basically could have done in 2003, but in 2007, a dated attempt at digital media sales, no ‘A’ for effort.

  4. What’s going to happen is that they’ll realize that these “other” online sellers, including the labels themselves, still can’t sell but a mere fraction of what Apple does at the ITMS, even when they are selling with no DRM. So, what happens then? They allow Apple to sell their catalog with no DRM, and everyone wins.

  5. “Recognizing opportunities lost to Apple’s dominance,”

    Translation, lacking the leverage to bleed consumers dry by forcing ridiculous prices upon them through multiple outlets.

    What it should say is, they should be tahnkful they are getting any money at all considering the only alternative before was watching all of the cash go away via file sharing.

  6. “Kravets continues, ‘The self-created headache for the industry is that the highly popular iPod and new iPhone only play music protected by Apple’s proprietary FairPlay DRM solution or music that isn’t protected at all.'”

    The wording of that statement is a little snipish, don’t you think?

    You could say the same thing about zunes. Zunes only play content in the Microsoft’s proprietary format or music that isn’t protected at all. What a clown!

  7. The down side to all of this is the risk of Amazon.com and others going along with variable pricing and non-DRM. If other non-DRM stores gain significant sales, Steve Jobs loses his leverage, and labels will then feel free to pull music sales from iTunes unless Steve goes along with their variable, charge-you-more, pricing schemes.

    In the end, Steve may have no choice but to go along with the ride, but this may take 3-5 years to take place, and by that time, the growth and transition of this industry will be won and done with Redmond having zero strategy and no place to hide with their close Zune xBox DRM system – niching themselves into complete non-existence.

  8. So what’s the REAL story? Easy, lowball prices against iTunes, get rid of Apple, then jack everyone with high prices!! NO company exec would ever stand up to the music/movie industry like Steve Jobs has done on behalf of the consumer. Amazon is simply a patsy folks, you can like their downloads all you want, because like crack, the first hit is free, the rest . . .
    will cost you the world.

  9. If EMI is contributing $0.89-$0.99 songs to Amazon and wants $1.29 for songs on iTMS, doesn’t this seem to be:
    1- A sure way to get less revenue for themselves, and
    2- Undercutting Apple
    I’m pretty sure EMI is getting an earful from Apple execs right about now.

    Other than that, I think this is good news, and Apple might be able to negotiate similar deals with Universal and, gulp, Warner. Those $1.25 tracks should go down to $0.99, and the funeral of DRM will be broadcast live around the world.

  10. I’m not so “SURE”….

    1. Apple can compete with any of these offerings because it is the only one that offers the 3 integrated links: the store, the jukebox software, the device…..

    2. Apple really only cares about the “device”, the other two it gives away or operates at small or breakeven margins to enhance the experience of owning the deivce…..

    do you really think that having non-DRM’ed music content, the consumer is now actually going to chose ZUNE or anything else over the ipod?

    not a chance…..

    does Apple really care where the content comes from as long as it’s device can play it? not so much…..in the device battle and the intergrated value-add battle, Apple is way ahead and probably has already won that game…

  11. Exactly what I’d been saying… Apple wins either way. Whatever slim iTunes profit they’ll lose to Amazon will be re-captured via increased iPod sales. The real loser is Microsoft and the WMA format.

    How do the Guinness Beer guys say it?…. “Genius!”

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