Apple has taken a sad song — the copy restrictions on its music — and made it better by removing the Digital Rights Management (DRM) protection for its high-quality music format in a deal with record giant EMI.
The news (see “EMI, Apple partner on DRM-free premium music” by Caroline McCarthy of CNET News.com) is that Apple will sell songs in a higher-quality audio format from its iTunes online store, at a higher price ($1.29 per song), without DRM. The songs will play on any computer and any digital-audio player. Entire albums and individual songs will be available in this higher-quality, non-DRM format, but they will not replace DRM-protected songs currently sold through iTunes at the older price ($0.99 per song). That way, consumers have a choice. And for those who’ve already purchased DRM-protected EMI songs at 99 cents apiece can upgrade them to the new format for 30 cents apiece. Steve Jobs suggested that half of iTunes’ music tracks will be available in both DRM-loaded and DRM-free form by the end of 2007.
According to The New York Times (“EMI Dropping Copy Limits on Online Music” by Thomas Crampton), Steve Jobs is responding to an attack on iTunes in Europe. Mark Mulligan, a London analyst at the research firm Jupiter, was quoted: “Jobs was clearly here in Europe to send a strong message to the discontent in Norway and the French parliament.” Jobs emphasized how much the music labels have benefited from sales through iTunes. “ITunes has brought more than $1 billion in revenues to the record companies at no additional cost to them. Everybody wins here.”
Indeed, everyone wins and especially Apple as it retains its control over the online music market. As I wrote before (see “Splendid Time is Guaranteed For All“), the online music industry will change dramatically for the better when the Beatles started selling their songs online, through iTunes — which is undoubtedly the direction Apple Corps (the Beatles label) is heading (see “Apple and Apple Give Peace a Chance“). I also noted before (see “Let It Beâ€¦ Naked (Without DRM)“) that stripping DRM from songs removes the barrier to freely using the music you own on different players. The connection was not so obvious until Apple made its first non-DRM deal, with EMI, the record label that controls a vast quantity of classic rock from the Rolling Stones, Pink Floyd, and yes, the Beatles (by distributing for Apple Corps).
Conspicuous by its absence from this deal is the Beatles catalog. EMI’s digital catalog does not yet include the Beatles — the label has the rights to the group’s recordings on CD, but the Beatles’ record company, Apple Corps, has not yet granted digital rights. When this happens, I expect to see another fanfare of news stories that will add yet another boost to this DRM-less higher-quality format.
Amazingly, EMI’s research showed that higher-quality, DRM-free songs outsold its lower-quality, copy-protected counterparts 10-to-1. Apple is using a higher bit rate (256 kilobit-per-second) with the AAC format, so the files are larger — about the same size as the song files in my library from CDs, because I use the 256 kbps rate with either AAC or MP3 when I rip CDs.
Also amazing is how the record labels can still charge so much. An album of songs will cost about $13-$15 either on CD or in this new iTunes DRM-less format. However, with the CD you get a physical backup of the track at the highest quality, along with artwork, credits, and liner notes. This deal puts the profits back into music sales for EMI, if only by reducing the cost of making CDs and distributing them to stores at wholesale prices. But it may not change my buying habits — I just ordered Neil Young’s Live at Massey Hall (CD/DVD) on CD from Amazon rather than purchase it on iTunes. Classic rock is, well, classic, and I want the liner notes and the extra DVD in the package.