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Universal Goes DRM-free Without Apple

Universal Music Group has joined EMI in experimenting with DRM-free music downloads, but unlike EMI, will be going without Apple and the iTunes Store. Instead, the label will offer its copy protection free tracks through other online music services, according to the New York Times.

DRM-laden tracks from Universal are still available at the iTunes Store, but the copy protection free versions will appear at other sites including RealNetworks, Wal-Mart, and Amazon. The decision to snub the iTunes Store may be an attempt by Universal to strip away some of the control Apple has over the music download industry.

Apple is seen as the market leader for legit music downloads with over 70 percent of the market in its pocket. The company has imposed tight controls over song pricing despite recording industry efforts to raise song prices and force Apple to switch to a music subscription model.

Music distributers have been trying to find new ways to increase revenue ever since CD sales began to drop a few years ago. Labels have been pressuring for higher per-track pricing and subscription schemes, even though consumers don't seem interested in higher song prices and what amounts to music rentals.

When EMI announced that it would offer DRM-free tracks through the iTunes Store, Apple agreed to raise prices for those songs from US$0.99 to $1.29 -- but the EMI tracks are also encoded to offer higher quality sound, too. While Apple has said that it is willing to offer the same deal to other labels, Universal does not appear to be interested, and has even gone so far as to refuse to renew its annual contract with Apple in favor of a month-to-month agreement.

Should Universal's experiment with DRM-free songs not pan out, the company has a built-in escape plan. It has already stated that the test program will only run through January 2008.

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jimothy said:

member since 04 Jun 2004 with 612 posts, unranked, send him a message or view his profile

I suspect if this is a modest success, we'll see Universal DRM-free songs on iTunes. If it's a failure, Universal will incorrectly assume that selling DRM-free songs is not viable (where the more likely reason it wasn't successful was because iPod owners, in majority, want to purchase from iTunes). If it were a raging success, Universal would not sell DRM-free songs on iTunes, and maybe even pull their catalog entirely, because they wouldn't need iTunes to sell music online. However, I find that scenario extremely unlikely.

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A guest said: (hide)

What format is Universal using? MP3? WMA? AAC? Are the DRM-free tracks from Uni done at a higher bitrate? What price are they going to charge? I'm surprised at the lack of details being released (not TMO's fault, you're just agregating from NYT)

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brett_x said:

member since 24 Jan 2006 with 322 posts, unranked, send him a message or view his profile

2 thoughts:

1) how many people buy music online at Walmart, RealNetworks and Amazon compared to iTunes? Doesn't everyone already have an iPod (and therefore iTunes installed on their computer)? Apple has made it so easy to buy the music in the first place. That's why they have been so successful. I doubt this will go very far.

2) Will the buyer's info be encoded into the songs like Apple does (even with the DRM-free tracks)? If not, I'm sure we'll see this stuff hit the P2P networks as soon as it's sold. I actually like that Apple left the info in the tracks. Overall, I think it will make it less likely that someone will share it with the world. I think casual sharing is not so bad. Remember copying CD's to tape? Or better yet- tape-to-tape "dubbing" as it was called? (I bet some of you don't.) It didn't bring down the music industry. But sharing music with everyone on the 'net is just plain wrong.

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A guest said: (hide)

brett_x wrote:
2 thoughts:

1) how many people buy music online at Walmart, RealNetworks and Amazon compared to iTunes? Doesn't everyone already have an iPod (and therefore iTunes installed on their computer)?

Yeah, but everybody also already has a web browser. Do you need anything more to purchase from these other stores?

Are you saying you want to buy non-DRM music from Apple, but you won't buy the same product anywhere else? That's just dumb.

And to the other poster: 99 cent .mp3 files, according to Wired.

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Bosco said:

member since 03 Jun 2002 with 1002 posts, unranked, send him a message or view his profile

Of course, this was the huge gamble in Jobs' DRM elimination gambit. Nobody saw it at the time, and apparently, Apple didn't game this scenario or didn't think it was terribly risky. What Universal is going to try here is to act as power broker to make the other stores more popular. The problems for Universal are that (a) DRM'd music is still selling well as evidenced by Apple's consistent march toward 200 trillion song, and (b) at $1 or $10, buying experience comes into play for most consumers and you flat out cannot beat iTunes and iTunes Store. Or if you try, you end up terribly niched with a second class playback device.

Whether you like how the music industry treats customers -- I happen to think they are fair players in a tough game -- you have to admit that they are beyond stupid when it comes to embracing real channels (as opposed to old Napster). iTunes Store is a growing channel tossed right in their lap, and they're rebelling by trying to seed other stores in their image. When you talk to old guard music execs (as I have since I know a couple), they are still in 2007 fearful of the Internet and the iPod. Yeah, they're a "threat", but they're the market people. These guys were fearful of the CD in 1990 no doubt.

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A guest said: (hide)

Bosco wrote:
(b) at $1 or $10, buying experience comes into play for most consumers and you flat out cannot beat iTunes and iTunes Store. Or if you try, you end up terribly niched with a second class playback device.

Most people have experience buying products online from places other than iTMS, so going to another website and clicking buttons shouldn't be too difficult. Actually, since all you need is a login and a web browser, the buying experience might be much more flexible than iTunes can offer since it requires that you install an application on the machine. With mp3 files, users are not limited to, but can use iTunes if they think that is the best playback that they can use. Most people I know prefer to avoid using iTunes and consider it one of the biggest drawbacks of the iPod and iPhone. Players such as Winamp, Media Monkey and Foobar2000 tend to be the ones that people I know prefer (though for the life of me, I can't figure out why foobar is popular).

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Bosco said:

member since 03 Jun 2002 with 1002 posts, unranked, send him a message or view his profile

Guest, I was talking about paying customers, not your Dungeons and Dragons club.

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deasys said:

member since 08 Apr 2003 with 296 posts, unranked, send him a message or view his profile

Quote:
Players such as Winamp, Media Monkey and Foobar2000 tend to be the ones that people I know prefer (though for the life of me, I can't figure out why foobar is popular).

I figure it's poopular because it's true to its name. "Winamp" and "Media Monkey" are FUBAR too. But, what the heck, we wouldn't stoop to using iTunes now, would we? I mean, it being so awful and all...

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tuscmat said:

member since 06 May 2004 with 35 posts, unranked, send him a message or view his profile

Universal's scheme is clear. These other services a subscription based service where the consumer is renting the music. When the customer leaves, they can't play the song anymore unless it's re-ripped somehow. Besides, Universal wants a tier pricing structure where the newest and most popular music goes for the higher price. That's what they want and that's why they don't want to deal with Jobs. They may succeed if they apply enough pressure to the other labels.

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Mikuro said:

member since 15 Jun 2002 with 457 posts, unranked, send him a message or view his profile

You can't possibly have a subscription service without DRM. As soon as those non-protected mp3s are downloaded, they're yours, forever. There's nothing they can do to make them stop working after a certain period of time. Not without DRM.

As for people not liking iTunes, non-protected AACs should play fine in any program and many portable devices. You still need to use iTunes to buy them, of course. For someone who doesn't use iTunes to play music, using iTunes to buy music is not as natural as using using a web browser. Does any of this really matter? *shrug*

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