Top UMG acts go DRM-free

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Denver — Universal Music Group, which has the largest market share of all the major labels with an estimated 26% of the global market, unveiled a plan Thursday to test the sales of digital music without digital rights management on a massive scale.

From now until January, UMG will begin selling "thousands" of albums and individual tracks without DRM via such digital outlets as Rhapsody, the Rhapsody-powered Best Buy store, Wal-Mart, PureTracks and Transworld as well as the Amazon.com service once it goes live.

While UMG might have dabbled with DRM-free tracks in the past, this test represents a major escalation. Instead of dipping its toes in the DRM-free waters with relatively obscure or emerging acts, UMG is committing some of its biggest sellers and front-line releases to the effort.

This includes such acts as Fall Out Boy, Amy Winehouse, 50 Cent, the Black Eyed Peas, Daddy Yankee and Common, whose new release, "Finding Forever," reigns as the No. 1 album in the country this week.

The test also will include sales conducted from all participating artist and label-branded Web sites. Additionally, UMG will use Google's AdWords search-based advertising program to drive digital music purchases through a social commerce site called gBox.

Noticeably missing from the test is Apple's iTunes.

In most cases, the DRM-free tracks will sell for the same cost as their protected counterparts, though in a variety of file sizes depending on the retailer.

UMG said the test is designed to measure such factors as consumer demand, price sensitivity and piracy effects of selling unprotected files versus those locked by DRM.

One of the most challenging aspects of selling music in digital form is the matter of interoperability. The iPod is the dominant digital music device in the market today, but tracks purchased anywhere other than Apple's iTunes Store can't be played on the iPod. As such, those competing services — and the digital download market in general — has suffered.

EMI Music Group was the first to embrace DRM-free digital sales, eliminating the restriction from its entire catalog. Starting with iTunes, EMI spent the summer rapidly striking deals with various digital outlets to sell DRM-free tracks, at a higher bit-rate, for 30 cents more per track than lower-quality DRM-protected files.

While not exactly jumping on the anti-DRM bandwagon, UMG's test shows that the label is at least running closely behind it.

"Universal Music Group is committed to exploring new ways to expand the availability of our artists' music online while offering consumers the most choice in how and where they purchase and enjoy our music," UMG chairman and CEO Doug Morris said in announcing the move. "This test, which is a continuation of a series of tests that UMG began conducting earlier in the year, will provide valuable insights into the implications of selling our music in an open format."

The gBox/AdWords element is perhaps the most interesting element of the trial. Fans using Google to conduct Web searches for participating artists will see a link to buy that act's music via a sponsored link in the results page. The gBox service is a sort of music widget developed by Navio Systems that lets music fans sell music by their favorite artists on their blogs, Web sites and other sources, adding a viral nature to the effort.

Antony Bruno is a contributor to Billboard.
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