Apple to EMI: You first! EMI to Apple: Ok.

by Jeremiah Foster

Steve Jobs says its the Major's fault that music, including music from iTunes, has DRM on it. The Majors say it is Apple's FairPlay that is the problem. Now we may be able to find out.

Jobs has been forced out of his protected forcefield and publicly stated that Apple will "embrace wholeheartedly" DRM-less downloads. EMI, for their part, is planning on releasing their entire catalog without DRM to the highest bidder according to the Wall Street Journal, link via Chicago Sun-Times. Now we get to see who is telling the truth.

We should look for a couple of things;

1. Will digital downloads take-off if they are not limited to playing on specific players?
2. Will piracy significantly change?
3. Will another music download site threaten iTunes dominance?
4. Is this viral? Will DRM-less movies be next?


Chris M
2007-02-09 08:43:30
I'm not so sure Apple's interested in being the highest bidder. I could be wrong, but I'd bet on Apple keeping DRM rather than paying extra. And they'll spin it by saying that paying extra to EMI would mean EMI albums would need to be more than $9.99 on iTunes, and they wouldn't want to force an inconsistent pricing model on their customers.

Of course... that's just my guess. I could be completely wrong.

2007-02-09 09:01:52
I second that. I don't think Apple would pay more for the privilege of killing DRM. And lets be honest, the music companies already get 60-70 cents per song. If EMI wanted more to remove DRM then Apple would have to raise prices. It wouldn't just be marketing hype.
2007-02-09 09:24:47
We also should look for

- is the unrestricted music then actually offered competitively?

For example, if the offering turns out to be 64kBit/s MP3s at $5 apiece, it certainly won't gain much popularity.

2007-02-09 09:24:58
Apple is not into buying music if apple wanted to do that they bought the music already and they where always able to sell without drm what they own themselves so it looks to me like emi is talking nonsense
jeremiah foster
2007-02-09 09:59:59
I agree with everyone that Apple will not bite on EMI's offer. According to the article however, EMI is already in talks with several potential vendors and they hope to compete directly with iTunes, so it is unlikely that Apple is even offered the opportunity to bid.
2007-02-09 10:03:19
Apple is under pressure regarding FairPlay in a number of countries. The DRM issue is not far behind. If both went away it would resolve those problems and also allow easier use of devices such as Apple TV. Sales without DRM would be subjected to competitive forces, but there is a tremendous advantage to Apple's well established brand name and leadership position.

Yes, if overpriced, downloads will not do well.

Aviad Ben Dov
2007-02-09 10:15:37
Regarding #4, my opinion is that we wouldn't be seeing DRM-less movies, from the reason that in that field at least, the industry is trying to back away from the DRM-less devices (VHS etc) and almost-no-security devices (DVDs), and into a new era of highly protected devices (Blu-Ray and HD-DVD with their AACS mechanism).

That said, we might see a consistent DRM mechanism (AACS) operating in all OSes, which is also a good thing for the consumer.

2007-02-09 10:53:32
To the highest bidder is the key there right? if that price is stupid, and jobs doesn't bite, it doesn't mean anything
Russ Miller
2007-02-09 16:26:17
This is decidedly not what Jobs said in his open letter. You try, try, and try to warp things to match your reality, Jeremiah, but it just doesn't work. What a sad state the MacDevCenter Blog has de-evolved to.
2007-02-09 16:53:09
Do you really think DRM is the problem with online sales?

I've bought some iTunes. They don't sound bad, but they don't sound as good as a CD do they? The CD comes with actual (and all of the) artwork and liner notes. Not so iTunes (or Rhapsody, Zune, Music Match, or whatever). Real CD's have a larger catalog than any of the online stores. Do a little bargain bin shopping and you can get your favorite CD's for close to online prices with all of the goodies just mentioned; better sound, better artwork, and liner notes.

I've bought iTunes. I've burned 'em to CD and played the CD in my car, in my annoying Windows computer at work, in my daughters boom box (Halloween Mix) while handing out Halloween candy. They worked fine ... no real DRM hang ups. Personally, I think this whole DRM brouhaha is whining started by a bunch of tight wad techno geeks who like their music like they like their software - free and open source! Then media/bloggers looking for ratings/hits rolled this "terrible" injustice into a big deal.

If DRM was such a big, fat, hairy deal Apple's iTunes store would not be the decent sized hit it has become. If the digital download offered a more comparable package to the CD it would probably be an even bigger hit. I like my liner notes: Who is the sax player on that track? Is that Michael McDonald doing background vocals on yet another album? What are the lyrics on that song?

Trust me, it is the value equation. Saving only about five bucks on an digital album (especially when there are not the manufacturing, packaging, or transportation costs for the music labels when distributing online) in exchange for audio quality, nice & complete artwork, and liner notes is the reason downloads haven't completely destroyed the CD - not DRM.

jeremiah foster
2007-02-10 05:56:05
Shane wrote; "Do you really think DRM is the problem with online sales?"

To be honest, it is hard to say. But both Apple and the Major record labels seem to think so. I think it will certainly help sales once it is gone but you have an excellent point when you say that an mp3's biggest competition is a CD. A CD brings with it liner notes and artwork, plus a resale value, which an mp3 will most likely never have.

However I think you are wrong when you say DRM does not matter, it does matter quite a bit. The internet and digitalization of copyrighted material has fundamentally changed business models and so-called intellectual property. DRM is part of a new definition of rights the public has and what rights private entities have over non-tangible goods and services. This has implications for many areas of society, for example; the patenting of public ideas, the right to privacy, and fair use. DRM is a non-effective attempt to stop piracy which infringes upon fair use doctrines and as such it plays a role in limiting the rights of individuals in the digital age. How we tackle this issue has implications not just for digital downloads of music, but for how our personal information is used, how the government tracks us when we are in cyberspace, and what exactly we are allowed to do with our computers.

2007-02-13 00:58:39
Apple and Major record companies say so, do they? You really believe everything you read and are told?

DRM - and all the "protective" good it does - was born out of the likes of Napster costing the Majors billions in revenue because it allowed copying of high quality music free of charge.

Now that we all know it is illegal to do that, and some have paid the price, we want the ease of Internet music but also the safety. DRM delivers. Apple hit the wave at the right time and dleivered a bang-on solution at the right time.

DRM is good for Apple, of course, but it is even better for the Majors. None of them want it to go. Why can't other in the MP3 player market just license it and we all go down the VHS road again.

Saint Fnordius
2007-02-13 05:47:02
Craig, I seriously question your claim that the original Napster cost the studios billions in lost revenues. There has been no evidence that each downloaded song meant a sale that was lost or otherwise might have happened. Some have even dared to posit that Napster actually helped boost CD sales, claiming it functioned as a way to discover new music.

There is evidence nowadays that legal, DRM-free MP3's as distributed by artists themselves actually can boost CD and concert ticket sales and get a band recognition. People will also pay for trust, something the P2P networks lack due to slipshod compression or even false positives that the studios themselves distribute.

I agree with the others: if it wasn't for the price tag, this would be interesting. As it stands now I doubt that this is a sincere offer from EMI, more like trolling for sympathy.