EMI, Apple with no restrictions Firms to offer DRM-free music
EmptyU.K. music powerhouse EMI Group has inked a deal with technology giant Apple Inc. to sell songs online without copy-protection software, in a move that ends the music industry's united front on digital rights management, or DRM.
EMI said it hopes the agreement will further boost consumer spending on digital music as Apple has predicted will happen in a DRM-free world.
Investors on Monday bid up Apple shares only slightly even though some Wall Street observers said the arrangement is a further sign of Apple's music market power. The stock closed up 74 cents at $93.65.
EMI shares closed up 0.3% on Monday at £2.28 ($4.52).
The deal, unveiled Monday in London by EMI CEO Eric Nicoli and Apple CEO Steve Jobs, allows the Apple iTunes store to make available for download songs by the Rolling Stones, Norah Jones, Coldplay and other EMI-rostered artists without the copying restrictions once imposed by their label.
But the big exclusion is music by the Beatles, which is not part of the EMI catalog deal, the companies said. Singles and albums free from copy-protection software and with a higher sound quality will be offered as a premium product, the companies said at a much-vaunted lunchtime news conference. Jobs jetted into the British capital to support EMI's move.
Consumers will pay a higher price for the premium singles — $1.29 a track versus 99 cents — but the same price for albums either with or without the copy-protection software.
The announcement follows public calls by Jobs this year for the world's four major record companies, including EMI, to start selling songs online without copy-protection software to increase digital music sales, which have grown in recent years as CD sales have declined.
Warner Music Group CEO Edgar Bronfman Jr. has said he sees no benefit in dropping DRM. Nonetheless, WMG has said it is testing music without DRM, as Vivendi's Universal Music Group has been doing. DRM software is designed to combat piracy by preventing unauthorized copying but can make downloading music difficult for consumers.
The software used by Apple does not work with competing services or devices, meaning that consumers who download songs from iTunes can upload them to iPod music players only.
"Our goal is to give consumers the best possible digital music experience," EMI's Nicoli said. "By providing DRM-free downloads, we aim to address the lack of interoperability, which is frustrating for many music fans."
He went on to say that he believes "offering consumers the opportunity to buy higher-quality tracks and listen to them on the device or platform of their choice will boost sales of digital music."
Added Jobs: "Selling digital music DRM-free is the right step forward for the music industry. EMI has been a great partner for iTunes and is once again leading the industry as the first major music company to offer its entire digital catalog DRM-free."