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Business - Written by on Thursday, May 17, 2007 8:07 - 3 Comments

Denis Hancock
Can Amazon and EMI bring an end to DRM?

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Amazon’s new music-download service was announced yesterday, and it’s quite possible that it could amount to a whole lot of nothing. The reason is because the store will only sell music without DRM protection, which is hardly a new offer – eMusic has been doing the same for years. Amazon’s problem, like eMusic’s problem, is the same old problem that’s been plaguing the industry for years – most of the labels won’t sell DRM free music. Since they control most of the popular artists, most people will find the music selection available on Amazon quite poor indeed.

For example, the article notes that what will be missing from Amazon includes the top-10 selling albums from last week. So as long as most of the people that go onto the site don’t want to buy the music that they actually like, things might work out just fine.

But there is potential here, and it is because it’s just most of the labels don’t offer their music DRM free. EMI Group PLC, which is the third largest music company by sales, has decided to change teams and offer up their catalog DRM free, both on Amazon and iTunes. In turn, we’re headed for a very interesting test – will EMI’s artists start outselling artists from other labels? And if so, will the other big music companies come around? Even better, will some artists demand their labels do the same, and/or choose EMI if given a chance?

Maybe, maybe not. As the article notes, iTunes is still in control of 90% of the digital music market – and while most of these songs will continue to be sold with the Apple’s DRM protecting them, most people know by now that this protection is weak at best and might not really care in the short term. But Amazon’s new store combining with EMI’s jump into the “darkside” – you know, the side where companies try to please their customers – offers the best chance yet for sanity to be brought to the DRM mess that’s been going on for almost a decade.

The final step might require another device emerging that competes with the iPod in terms of popularity, with music over mobile phones being the best bet. If people keep buying music, and more and more things to play them on, and can’t get music from device A to device B, something will have to give.



3 Comments

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Ariel Diaz
May 21, 2007 16:53

Interesting concept, but you missed a lot of key points.

It was Apple, not Amazon, that pushed the music industry to this, with their announcement over a month and a half ago. Amazon is merely an additional outlet, NOT the one innovating and pushing the music industry.
http://www.apple.com/pr/library/2007/04/02itunes.html

Further more, I believe the quip against Apple and iTunes is misplaced, especially considering that Steve Jobs has stated publicly that he expects half of all the music sold on iTunes to be DRM-free by 2008.

Also, let’s not forget that it’s Apple fighting for the consumer here. If Microsoft ran a music store with 80% market share, we’d be seeing a very different music industry right now, more in line with the anti-customer, prop-up-our-antiquated-business-plan actions of the RIAA.

The concept is good, but this post should have been written to go with the Apple-EMI announcement. Amazon-EMI was not news.

Mike Dover
May 21, 2007 19:30

Amazon stock is up $5 on Monday…highest since 2000.

Denis Hancock
May 22, 2007 8:46

Ariel – good points. If you go back through the earlier posts, you’ll find some other discussion about the role Apple plays in all of this.

While I agree with you that Apple is “pushing” the music industry a bit, at the same time they are in a unique position where delays (etc.) to DRM free music doesn’t hurt them at all – since they dominate the market.

In turn, my feeling is that Apple is often playing both sides of the fence on this issue, and they employ a few “antiquated-business-plan actions” of their own.

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