Thank Jobs: Lone major holdout Sony BMG to finally sell DRM-free music

“In a move that would mark the end of a digital music era, Sony BMG Music Entertainment is finalizing plans to sell songs without the copyright protection software that has long restricted the use of music downloaded from the Internet, BusinessWeek.com has learned. Sony BMG, a joint venture of Sony (SNE) and Bertelsmann, will make at least part of its collection available without so-called digital rights management, or DRM, software some time in the first quarter, according to people familiar with the matter,” Catherine Holahan reports for BusinessWeek.

“Sony BMG would become the last of the top four music labels to drop DRM, following Warner Music Group, which in late December said it would sell DRM-free songs through Amazon.com’s digital music store. EMI and Vivendi’s Universal Music Group announced their plans for DRM-free downloads earlier in 2007,” Holahan reports.

“In a Feb. 6, 2007, letter titled ‘Thoughts on Music,’ [Apple CEO Steve Jobs] pointed the finger at the labels for supporting DRM, silently suggesting the wrath of consumers and antitrust authorities should lie with them. Within two months, EMI, one of the smaller of the big four labels, offered to sell higher-quality, DRM-free tracks through iTunes,” Holahan reports.

“Rather than following EMI’s lead, other labels are hoping to create another Apple competitor in Amazon, which is willing to give the recording industry greater pricing flexibility. ‘That was a big part of it—countering Apple’s control in a positive way by creating more able competitors,’ says Mike McGuire, a vice-president for research at Gartner,” Holahan reports. “Narrowing Apple’s lead won’t be easy. Just ask Microsoft, which has made meager headway with its Zune music player and online music store.”

Full article here.

29 Comments

  1. “… other labels are hoping to create another Apple competitor in Amazon, which is willing to give the recording industry greater pricing flexibility.”
    There IS no flexibility in pricing. There are four basic tiers, except when something is “on sale”: supermarket remix, generic “name”, specialty, and “super-star”. Within these “markets”, prices are fairly stable across the industry. Or is this – four prices (plus “sale”) – what they mean by “flexibility”?
    Dave

  2. “Just ask Microsoft, which has made meager headway with its Zune music player and online music store.”

    You could but I suspect that Ballmer spends most of his days with his fingers in his ears while yelling, “LALALALALA . .I . .CAN’T HEAR YOU.” Not that there’s anything wrong with that.

  3. “In a move that would mark the end of a digital music era… “
    I think they got this wrong.
    Isn’t this the event that marks the *beginning* of the digital music era??

    The end of one era is the beginning of the next. That is what we are seeing.

  4. The major labels still don’t realize that at this point it doesn’t really matter what they do: Apple wins. The iPod / iTunes combo is doing bang-up business. Looking at the latest statistics, demand in the MP3 player market – which Apple still dominates after 6+ years – is leveling off as more people listen to music on their cell phones. The only MP3 player that didn’t see a leveling off or drop was the iPod. That means that even if Amazon took a substantial chunk of the iTS business, it’s sales will still go to mostly iPod users. Not to mention the number of non-iPod owners who buy protected and non protected tracks from the iTS.

    Now with the ability to buy tracks directly to the iPhone and the iPod Touch, and the rumored ability to buy directly via Apple TV coming soon, the notion that the labels are somehow hurting Apple by giving tracks to Amazon first just got that much more silly.

  5. I really do not care less where I buy my music- Amazon or Apple. If Amazon can deliver a non-DRM AAC (not mp3) file at a decent sample rate, I’ll buy it.

    Apple sells music to support the iPod- not so much to make money selling music. The RIAA/MPAA still seem to be clueless about this. Nothing but their own greed is preventing them from selling non-DRM content that can be used on iTunes/iPod/iPhone/Apple TV.

  6. And every DRM-free MP3 track sold on Amazon can be loaded into iTunes and transferred onto an iPod, Touch, or iPhone. This would have been Apple’s fondest wish 5 years ago. They couldn’t get it then because the record companies demanded DRM, thus iTunes was born. The only reason to keep itunes around now is to keep the pressure on and keep every body else honest.

  7. Just wonderin’–if music labels are going to sell DRM-free music then why even bother with amazon, apple, etc? It doesn’t make a whole hell of a lot of sense–if you don’t need a “store” to apply DRM coating to your tracks, why deal with a store at all?

    Why not sell your tracks directly to consumers, and pocket the vig the store is getting?

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