Finally - EMI and Itunes to offer non-DRM sales

EMI, Apple Announce DRM-Free Digital Sales Plan

EMI and Apple will now sell DRM-free catalog on the iTunes Store, according to a joint announcement issued today. The move is groundbreaking, and shatters a previously ironclad commitment to digital protections by the major labels. The decision means that well-known tracks from artists like the Rolling Stones, Norah Jones, Lily Allen, and Janet Jackson can now be downloaded in a protection-free format, an approach that eliminates usage and sharing restrictions. The company pointed to a refreshed product line that will feature "a much higher sound quality than existing downloads," and one that will be "free of digital rights management (DRM) restrictions". Specifically, the label will offer its catalog to digital music stores in a range of higher bitrates, including CD-quality fidelities. According to Steve Jobs, the DRM-free offering will be exclusively unveiled by iTunes in May. Other stores will offer the DRM-free catalog at dates thereafter.

The move represents a major shift, though several asterisks are dangling. The tracks themselves are being branded as "premium downloads," and will carry an elevated price tag above "standard," DRM-protected tracks. Instead of a standard, 99 cent, 79 pence, or 99 euro price tag, the premium tracks will be priced at $1.29, 0.99 pence, or €1.29. Both premium and standard tracks will sit alongside one another, and consumers will have the ability to upgrade their standard versions by simply paying the difference. That approach breaks an iTunes commitment to uniform pricing and format, and conflicts with earlier philosophies expressed by Jobs. But during the unveiling, Jobs noted that the offering means greater choice, and a more fine-tuned offering. "We think our customers are really going to appreciate this," Steve Jobs said. "iTunes will continue to offer its current catalog at the same price, alongside the DRM-free, higher quality versions." Jobs also disclosed that the iTunes Store has now sold more than 2.5 billion tracks.

The solution to the music industry is simple: Fix the product!

...could not have said it better myself!

Forget DRM, It’s the Music
Excerpted from CNET News Report by Charles Cooper

Pushing my vacuum cleaner around the living room last week, I suddenly did a double take. Chockablock with records, cassettes, and CDs, the wall unit across from me contained my 35-year-old history as a music consumer.

Truth be told, I did download a few digital-music files here and there during Napster’s heyday in the late 1990s. (Personal note to the RIAA: They’ve all since been deleted. I swear on my pet rock.) But I paid for most of the rest of my collection, down to the last penny. I bet you can say the same for the majority of the music-listening public.

So it was with a mix of amusement and disappointment that I read about the recent get-together for music industry executives, where the folks invited as talking heads took turns bashing Apple CEO Steve Jobs and offering pale prescriptions about how to fix what ails their business.

I don’t want to get into an argument about which generation created the best music. Personally, I’m partial to jazz and classical, though I can’t deny that I dig a lot of hip-hop. But is it possible – or even likely – that the falloff in music sales has more to do with the quality of contemporary music than with digital infringement? We obviously have an enormous appetite for schlock, but there are limits.

With all due respect to the high-quality bands working for a living, the studios have always chosen the easy out by shoving numbingly formulaic, bad music down the public’s throat. For most of the postwar era, that was the way things worked. Then came the Internet, which ushered in the revenge of the music buyer.

The studios shouldn’t be surprised at what happened. Throughout their history, they routinely targeted Top 40 titles at teenagers and early twenty-somethings. The irony is that these folks make up the demographic most likely to infringe music copyrights.

Instead of threatening to sue their own (potential) customers, why don’t they do more to monetize the growing demand for oldies and indie music? Fans clearly are willing to pay it. What’s so hard about finding a way to make that work? With a little creativity, the studios could find ways to better promote musicians who cater to these – and other – demographic categories, in which digital infringement isn’t the fashion. All the consumer wants in return is a fair value.

Instead, the industry’s best and brightest continue to look elsewhere.

For instance, they insist on clinging to DRM as if it were a lifeboat. Pardon the cliché, but that ship has sailed. The endless wrangling over Jobs’ call to get rid of DRM is so irrelevant. Same goes for their tired refrains, blaming the likes of you and me for their plight.

To wit: Ted Cohen, who directs music consulting for Tag Strategic, says the solution is “to get money flowing from consumers and get them used to paying for music again.”

Really? It’s not as if we haven’t been paying all along. With all the high-powered MBAs in their employ, it’s hard to fathom why the music industry can’t move beyond finger-pointing and develop a more creative approach. I can understand the angst expressed by Cohen and his music industry cohorts about the future, but squeezing music fans for a few more shekels isn’t the answer.

These folks are still shell-shocked from the Napsterization of their business, which has suffered a 23 percent decline in worldwide sales the last six years. Blaming P2P technology has become the convenient undertaking of our times. But it’s useful to recall that people didn’t stop buying books or maps when the Xerox machine hit.

Customers will pay for worthwhile products, even if they can get free lower-quality copies. There’s a better reason to explain what’s gone wrong. It’s the product, stupid. Then again, maybe I’m simply showing my age.

EMI puts non-DRM talks on hold - demand large advance payments

After so much anticipation on this, the talks seem to have ended, reports Bloomberg. The story says talks aimed at removing copyright protection from songs didn’t go anywhere because they couldn’t agree on the size of an advance payment.
EMI demanded an upfront payment to compensate for its risk in releasing the music sans DRM, but the retailers countered with a lower offer, which EMI rejected, and negotiations with the likes of Microsoft, Apple, RealNetworks, Yahoo and Amazon.com are now on hold. The upfront demanded by EMI would come on top of the per-song charge that retailers pay...the new fee would make it less profitable for retailers unless they raise prices, these companies argued.

Apple wasn’t initially involved in the talks with EMI and was added after the famous Jobs letter... again goes to prove the power of blogs!

Jobs command, and EMI obey?

From TimesOnline:

EMI may end digital copy protection

EMI is considering whether to abandon copy protection for digital music, in a move that would set the British company dramatically apart from three principal rivals.

The British group behind Norah Jones and Robbie Williams has sounded out online music retailers about switching to the MP3 format, abandoning the proprietary digital rights management technology developed by Apple.

However, industry insiders believed that EMI was getting cold feet, because the plan could lead to a precipitate drop in its already flagging revenues. The decision would leave its entire catalogue without any protection in the digital era.

This week, Steve Jobs, the chief executive of Apple, to the music industry, in which he suggested that the majors drop their demand for copy protection, to ensure that songs sold from iTunes can be copied on to any digital music player.

However, EMI’s thinking is at odds with its competitors, who believe that Apple should instead try to license its copy protection software to permit interoperability with other digital music players — a stance that Mr Jobs rejects, arguing that the security technology may leak.

Edgar Bronfman, Warner Music’s chief executive, hit out at Jobs on Thursday, saying that abandoning copy protection was “without logic or merit” in words that found private support at market leader Universal. They hope to maintain the pressure on Apple, at a time when the hardware company is coming under increasing pressure from European governments.

All the music majors have tried to release some MP3 downloads, with EMI releasing songs from Lily Allen and Norah Jones, which it said “went down well with fans”. However, it is not clear that many people opted to pay for the songs, and other music groups question whether there is a viable business at this stage.

It is not certain that Apple will be able to open up its Fair-play digital rights management technology, as there is speculation that the company does not have all the patent rights to the software. In 2004, Microsoft paid InterTrust, a digital rights management software company, $440 million (£255 million) to license its technology. It is possible that if Apple made clear what technology it was using, a similar issue would arise.