Amazon to Sell Full EMI Digital Catalog Without DRM

By Richard Menta 5/16/07

The days of Digital Rights Management on paid music files took one step closer to becoming a footnote in record industry history with the announcement by EMI this morning that it signed a deal with Amazon to offer its entire digital catalog DRM-free. Also notable, when Amazon launches its digital music store later this year it will only offer tracks in the MP3 format. "Our MP3-only strategy means all the music that customers buy on Amazon is always DRM-free and plays on any device", said Amazon CEO Jeff Bezos.

The announcement follows April's deal between Apple and EMI to sell DRM-free tracks on iTunes. iTunes will sell tracks in the AAC format, a codec played by all iPods, but one that is not universal to all digital audio portables.

Richard Menta

By choosing to go with the MP3 codec, Amazon will be the only service to offer a full body of major label content in the only format playable on all digital players. This gives their service a genuine competitive edge over iTunes, a critical point because to date competitors have struggled to gain market traction against the popular service. Most hampering them is the fact that none yet sell major label music in a format that can be played on an iPod. The EMI deal signals a change that should soon see all services offering iPod-friendly music.

Apple's decision to use the AAC codec is understandable. AAC is a more modern codec, capable of higher quality sound from files with lower bit rates than MP3 files. It is also read by all iPods where most DAPs don't read that format. This reduces the number of iPod competitors with access to iTunes, at least in the short run. But, MP3 files are still pretty good and in its press release EMI stated that the tracks will be available "in a variety of bit rates up to CD quality". In these days of high broadband penetration large file sizes are less of a concern.

EMI is the smallest of the major labels and the one that is in the most fiscal difficulty. Recently, their board of directors rebuffed a buyout offer from Warner Music Group, an offer that was significantly lower than the bid EMI rejected from Warners last year. As CD sales continue to drop precipitously, while digital sales increase slowly, EMI no doubt felt they needed to jump start the growth of digital sales. This is a major reason why the company decided to break away from the pack with a digital strategy that embraced the removal of DRM. Customer frustration with the limitations imposed by digital rights management is a top complaint against the paid download market. If the Amazon deal grows legs and the new service gains a solid market share it will pressure the other labels to open their catalogs sans DRM. Amazon won't sell it otherwise.

Amazon and EMI did not announce how much tracks will retail for, but it is assumed prices will match the $1.29 premium iTunes charges for DRM-free music. It might be noted that another top complaint against paid digital music are what many feel are high track prices, arguably the biggest complaint. With file sharing bigger than ever, low prices offer the most compelling reason to buy rather than trade.

Other MP3 stories:
iPod Killers for Summer 2007
- 38 new portable players
iPod Killer Graveyard: Failures Equal NIB Bargains


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