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July 20, 2006

Yahoo! Sells Popular MP3 Without DRM

Yahoo is performing an experiment in online music sales that has some interesting implications.  A major impediment to online sales has been consumer acceptance to multiple and incompatible DRM schemes.  As the market exists, Apple has the majority of sales because their approach has a lighter touch with DRM and the iPod has a cool factor beyond its functionality.  The 99 cents price per song tends to define the market price for tracks.  Apple essentially dictates this price since it supplies the majority of sales.  Labels are intensely aware of this as they look for ways to implement a sliding price scale but are stymied until they can break free from Apple.  That's not going to happen until there are easy alternatives to the iTunes store.

This is where Yahoo's interesting experiment comes in.  They are selling a digital audio track (A Public Affair) by Jessica Simpson for $1.99 in MP3 format and without any DRM.    Consumers would love this as the track can be played on any player or device and burned to CD.  That's total portability at a higher price.  This may be the market tactic that labels may use to try to break Apple's hold on pricing, assuming the experiment works, that is, sells a bazillion copies of the MP3.  The question is whether the public will go for higher prices in return for more flexibility than even Apple provides.

Beyond that the sale is gimmick-ed up to draw attention to it.  The song can be personalized by including different first names.  The sale site (you can get a link to it from the Yahoo Music Blog) offers hundreds of names organized by gender and alphabetically.  Common names are there of course, but there are names that challenge spell-checkers such as Buttahman, Kimball, Yomi, and Jordi as part of the mix.  The site touts the download as personalized just for you, (and the millions of other Bob's out there) and if your name isn't there, well, check back later.  Conspicuously missing is that of another Simpson, Bart.  That wouldn't be the first time.  In one episode of the Simpsons, Bart was in a gift shop at Itchy and Scratchy Land and couldn't find his name on a vanity license plate.  He did find Bort, though,  Jessica hasn't used that one yet.

We may see two or three trends here, sliding pricing, less paranoia on the part of content providers, and new marketing techniques for music.  You can't sell picture discs, multi-colored vinyl sets, and box sets of mostly old material to collectors in cyberspace.  Labels exploited the ability to provide different physical editions to sell the same music over and over again.  This may be the start of the virtual version of this practice.  Collector take note.

July 20, 2006 | Permalink


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