In a move that Hypebot (and in a poll 35% of Hypebot readers) predicted for months, EMI announced that it will begin offering its entire catalog free of DRM (Digital Rights Management) restrictions. iTunes will have the tracks first selling at $1.29 each in a DRM free version of is proprietary AAC format. Other retailers will be rolled out in the coming weeks with options for DRM free WMA and MP3 sales as well.
All tracks are promised at higher bit rates and with better sound quality than current downloads. In a move that other retailers are sure to mimic, iTunes will offer full album downloads for the current $9.99 price and 20-30 cent song "upgrades" to DRM free for those who have bought tracks previously. Tracks with DRM will continued to be sold on iTunes at the current 99 cent pricing. All EMI videos will also be offered DRM free on iTunes with no price change.
“Our goal is to give consumers the best possible digital music experience. By providing DRM-free downloads, we aim to address the lack of interoperability which is frustrating for many music fans. We believe that 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,” Nicoli said,
This is a seismic shift for the major labels all of whom until now have held on to the notion that tracks must be protected by DRM. But with CD sales tumbling another 20% so far this year and digital revenues not rising to meet demand, a beleaguered EMI decided to be the first major to take the plunge. EMI's move along with the many indie labels who have been offering DRM free tracks for months may have finally opened the digital floodgates.
Interestingly Apple and iTunes are attempting to hold onto their supremacy by eliminating DRM from their proprietary AAC format and not embracing more open formats like MP3 or WMA. Thus tracks bought on iTunes may not play easily or at all on devices other than Apple's own iPod line. But as other retailers begin selling DRM free MP3 tracks, full track interoperability between devices including the iPod finally becomes a reality.
CLARIFICATION - AAC is an open format and not the property of Apple. iPod and Zune players play AAC tracks, but many others do not. And only iPods will connect directly to the ITunes store thus making purchasing the new DRM tracks at least a two step process for many consumers.
EMI's bold move is sure to have ripple effects throughout the industry. For example, what major label will be next to drop DRM? Universal has been quietly suggesting that it is ready to drop DRM on some of its catalog starting with its classical line. WMG on the other hand has been adamant that it has no intention of giving up copy protection.
Which online retailers will be able to retool first to offer duel formats? Some like the UK's 7Digital who already offer multiple formats should see at least temporary traffic increases. 7Digital announced this morning that it is the first to offer EMI tracks in the mp3 format.
And then there's Amazon who seemed on the verge of opening an mp3 only store and is rumored to be close to buying mp3 subscription service eMusic - the second largest download site after iTunes? On the one hand it broadens its offerings immensely and on the other it opens up a world of competition. Or does the combination of the world's largest DRM free subscription service (eMusic) with the most respected online retailer of music and books (Amazon) selling fully open tracks in the MP3 format playable on any device create the first real competition to the iTunes/iPod monopoly?
Click here for EMI and ApPle press releases and audio of the press conference.
Read some great comments and trackbacks after the jump.
This story was prepared with help from Erin Smith of Skyline Innovations.