EMI to ditch DRM, offer improved sound on iTunes

IDG News Service - EMI Group PLC's announcement today that it intends to drop digital rights management (DRM) restrictions on the tracks it offers through Apple Inc.'s iTunes makes the recording giant the first of the four big music labels to ditch DRM.

At a joint press conference, EMI Group CEO Eric Nicoli stated that the company had engaged in testing and consumer polling in the months before the announcement, concluding that there was an overwhelming amount of support for DRM-free tracks with higher sound quality. The announced price of the non-DRM tracks with be $1.29, or 30 cents higher than the current per-track prices.

DRM technology is applied to many downloads to prevent illegal copying or sharing of the content, but it also prevents legal copying and can tie users into a certain product or technology. For example, Apple's iPod won't play DRM-protected songs purchased from anything but the iTunes Music Store, while owners of Creative Technology Ltd.'s devices aren't able to use the iTunes store because those downloads are incompatible.

Apple CEO Steve Jobs called for an end to the use of DRM on music files in a blog-like posting on the Apple home page in February. In it, he argued that consumers would benefit because any player would be able to play music from any online music store and not be restricted as it is currently.

"This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat," he wrote.

Reaction from the big four music labels was mixed, with perhaps the strongest response coming from Warner Music Group Corp. CEO Edgar Bronfman, who said the idea of DRM-free music or movies was "without logic or merit."

EMI, on the other hand, appeared the most receptive to Jobs' call. The company had already experimented with offering DRM-free music a couple of months earlier when it offered MP3 files by Norah Jones and Relient K through Yahoo Inc.'s music store.

A switch to DRM-free music will certainly be good news for consumers, said Bryan Wang, an analyst at In-Stat in Singapore. Speaking ahead of the announcement, he said that consumers don't necessarily understand DRM and just want to be able to play purchased music on all their devices.

Taking restrictions off sharing music won't necessarily mean a big jump in piracy either, he said. While music sharing exists, it falls off as consumers enter adulthood and begin working, so that sharing of content among people over about 20 years of age is not that common, even for illegally downloaded music that has no DRM. "We don't expect the illegal transfer of music will be that common," he said.