Apple and EMI announced this morning their decision to sell digital music downloads without digital rights management via Apple’s iTunes store. Apple will sell higher quality songs (256 kbps) for $1.29 a song without DRM though consumers are free to choose lower priced DRM tracks. Album prices remain unchanged.
This is a strategic move that puts Apple’s rivals – rival services such as Napster, Microsoft, and other major record labels on a weak footing – giving Jobs the upper hand in this high-stakes game of poker.
The announcement, follows up on Steve Jobs’ open letter published back on February 6, 2007. The legal problems in Europe and constant criticism of its DRM policies (including not licensing it to others) prompted the unusual move – the open letter. In his letter, he outlined that the problem was not Apple, but the record labels who wanted their music wrapped up in DRM.
Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat. If the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM-free music on our iTunes store. [Steve Jobs]
Well, EMI bought into this vision, and in many ways Jobs called the record industry’s bluff. Basically, now the other labels – Sony, BMG and Universal – have to embrace DRM free music or else have their hypocrisy exposed. If the other majors follow EMI’s lead, then Apple might have turned on the heat on some of its rivals say, Napster or Rhapsody, who would have to follow suit or else become monthly subscription services.
Hypebot, an excellent blog that tracks the digital music business says it best, “EMI’s move along with the many indie labels who have been offering DRM free tracks for months may have finally opened the digital floodgates.”