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April 2, 2007

EMI Abandons DRM, But No Beatles For Sale

So, the big announcement was the removal of DRM from EMI tracks on sale at online stores, including Apple's iTunes store.  The price per track goes up to $1.29 per track.  For that 30 cents the consumer gets convenience and a higher quality download.  The bit rate for files will be doubled to 256 KB, which is CD quality or close to it.   Consumers will be able to upgrade their existing music collections for the incremental cost. 

High quality albums will still cost only $9.99, the same price as the low quality protected version.  Offering a bulk discount for a higher quality album set is another marketing attempt to preserve the format.  EMI and Apple would like to sell full albums and are willing to eat the price difference to do this.

This deal has done something no other arrangement has ever done before, to get Steve Jobs to vary the prices of songs at the iTunes store.  This was a point of bitterness at the last contract negotiations between Apple and the labels.  They wanted to sell newer tracks at a higher price and older tracks at a lower price.  Jobs called them greedy and held the line at 99 cents.  That position got something from the labels to justify a higher price.  The deal also means that EMI tracks coming from the iTunes store could play (with a little help) on players other than the iPod. 

The EMI decision abandoning DRM may not stem the tide of piracy, but it will likely incur more sales of EMI tracks.  Consumers love convenience and are willing to pay for it.  EMI also said that this move will not change their position on filing suits against infringers. 

What was not present at the announcement was any mention of the Beatles' recordings coming out in any legitimate digital download.  Jobs will have to keep chasing that one.  And the rest of us will have to wistfully wait for that press conference and that announcement. 

Read the press releases from EMI and Apple.

April 2, 2007 | Permalink

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