By Richard Menta 9/14/06
Death Metal is not exactly my preferred genre of pop music, but I have to appreciate Open Grave records decision to sell its music in the unencumbered MP3 format. Recently, a number of conference attending record label execs said that there is no way that they will ever consider releasing their music without digital rights management (DRM) technology. Unfortunately for them, not only are all the participants in this field refusing to commit to the same crippled formats, many consumers are starting to reject DRM-laden music of any kind.
Meanwhile, the savvy independent are grabbing a competitive advantage by selling their music in the only codec that can be played on all devices, which is the MP3 codec. iTunes may be the number one music service with a healthy percentage of the market, but next in the market are two sites that sell music in formats without DRM.
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Embattled Russian service AllofMP3.com is second in the marketplace. It sells music in several formats and compresion rates and it's traffic exceeds that of the well known Napster. Napster is not third in the marketplace, though, despite selling major label music. That honor goes to EMusic who sells the music of independents, again in the MP3 format. If Emusic can outsell Napster with independent artists that alone gives insight to the savviness of the online digital download shopper. It also illuminates this fact; independent labels can compete very well against the major labels online.
Former record company exec and now digital music consultant Ted Cohen openly doubted whether independents were gaining critical ground by using the open MP3 format. The simple fact that MP3 files don't have interoperability issues is certainly becoming a major plus as EMusic's success suggests. The iPod will remain the market leader for years, but with all the competition their two-thirds plus of the market is unsustainable. When it drops below 50%, then the sores of interoperability will become more apparent to the average consumer.
At that point the independents that chose to sell MP3 tracks will be in prime position.
Other MP3 stories:
Zune Unveiling Today
iPod: Handicapping the 6th Generation