One Down: EMI Teams Up With Apple, Becomes First Major To Drop DRM
According to the Wall Street Journal, tomorrow’s EMI-Apple announcement will have nothing to do with the Beatles. Instead, it will center on EMI’s dropping digital-rights management from most of its online offerings:
In a major reversal of the music industry’s longstanding antipiracy strategy, EMI Group PLC is set to announce Monday that it plans to sell significant amounts of its catalog without anticopying software, according to people familiar with the matter.
The London-based music company is to make its announcement in a press conference that will feature Apple Inc. Chief Executive Steve Jobs. EMI is to sell songs without the software — known as digital rights management, or DRM — through Apple’s iTunes Store and possibly through other online outlets, too.
DRM has been a contentious issue in the world of online music sales. Record companies have so far insisted that digital retailers employ the software to prevent rampant copying. But because the DRM used by Apple is proprietary and does not work with services or devices made by competitors, it has had the unintended consequence of locking owners of its popular iPod music players into buying the most popular mainstream music from the iTunes store, and not its competitors. Record companies have blamed this lock-in for limiting digital-music sales, which account for around 15% of all recorded music sales in the U.S.
EMI’s move comes after months of private discussions and public advocacy by Internet and technology industry executives, including Mr. Jobs, aimed at encouraging the music industry to change its approach to licensing music for sale online.
This is pretty surprising news, and not only because it involves a major label making a smart decision about online distribution for the first time in, well, forever. (Although if we were going to bet which major would drop DRM first, it would have been EMI; they’re no strangers to the idea of loosening restrictions on even their biggest artists.) If we could make it to London in time for the 8 a.m. ET press conference, we’d ask a few questions: First: How will Apple open iTunes to these DRM-free downloads, and will labels that have been distributing their wares without DRM–like all of those on the MP3 subscription service eMusic–be able to follow in EMI’s path? Second, will EMI make a play to put its DRM-free catalog on that service, which has traditionally been the land of indie labels? And third, how will this move affect the beleaguered label’s prospects for eventually being bought? Warner Music, which was chief among EMI’s suitors, has a CEO who’s pretty stridently pro-DRM; does this mean their dalliances are officially dead? (It’s far-fetched to think that Apple eventually swoop in and save EMI’s day–or is it?)