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Major Music Labels Watching DRM-free Music Closely
Sunday, May 6th, 2007 at 4:00 PM - by John Martellaro
In April agreed to sell DRM-free music from EMI via the Apple iTunes store. The rest of the music industry has been watching closely to see how that works out, and now that contract renewals with Apple are coming up, more changes may be on the way, according to SmartMoney on Sunday.
Apple, iTunes and the iPod have breathed new life into music, and that has put Apple in the drivers seat regarding how music is sold on-line. "At this point, no one can ignore Apple or what Apple wants, given its position in the marketplace," said Michael Gartenberg, an analyst with Jupiter Research. "The fact that they were able to do this deal with EMI puts more pressure on some of the other labels to follow suit."
However, the deals that have been struck between Apple and the labels expire this spring, and new negotiations are underway.
SmartMoney reported, "For their part, at least two of the recording companies will ask Jobs to sell a wider variety of content in digital bundles of songs, videos and other multimedia, according to two recording company executives familiar with their companies plans. They spoke on condition of anonymity, citing the confidential nature of the negotiations."
Apple has been under pressure to make their FairPlay DRM more widely available so that iTunes music plays on players other than the iPod. Apples response has been, in turn, to propose DRM-free music and has alllowed the price of DRM-free music to rise in compensation.
Exactly how this all comes together, the new demands from the labels and the movement to DRM-free music remains to be seen. But as more and more companies selling music get on the DRM-free bandwagon, it could give Apple all the clout it needs in these negotiations.
David Pakman, president and CEO of eMusic.com Inc. thinks the elimination DRM on music could help his company. "We really think the market is breaking our way," Pakman said. "A noteworthy major will probably take some steps in this direction later this year."
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