EMI to offer DRM-free music, but for a price

EMI Group will sell digital music without DRM , and at a higher quality than existing downloads. Apple's iTunes store will be the first to offer the new format.

EMI Group has announced a plan to sell its music online without copy protection technologies, a significant step that will give consumers greater freedom in the way they can listen to music purchased online.

The music without DRM (digital rights management) technology will also have a higher audio quality, offering a sound close to that of the original recordings, according to EMI. But it will also come at a higher price, with each DRM-free song costing about 20 percent more than current downloads.

The announcement was made at EMI's headquarters in London on Monday by EMI Group Chairman Eric Nicoli. He was joined by Steve Jobs, chief executive officer of Apple, whose iTunes music store will become the first online retailer to offer the DRM-free music.

"EMI's entire digital music catalogue will be available DRM-free on iTunes in May," Jobs said at the press event, which was also broadcast on the Web.

Jobs called EMI's move "the next big step forward in the digital music revolution," and said it will enable consumers to play songs from iTunes on any digital music player that supports the open AAC (Advanced Audio Coding) audio format.

Jobs said he will now try to negotiate similar deals with the other three big music labels, and predicted that half of the 5 million songs available through iTunes will be available DRM-free by the end of the year.

Apple will continue to offer EMI's music with the DRM technology and at its current audio quality, for customers who don't want to pay extra, Jobs said. And EMI expects to sign similar deals with other online retailers, Nicoli said.

Opposition has been mounting steadily to the industry's use of DRM, which prevents consumers from copying music illegally, but also creates what many see as unfair restrictions on the way they can listen to songs they have legally purchased.

Most notably, Apple's DRM system prevents songs bought from iTunes from being played easily on any music player other than Apple iPods. That restriction has attracted criticism, particularly from European regulators who say it unfairly limits customer choice.

That will now cease to be the case, Jobs said Monday, although consumers will have to pay extra for the added freedom.

EMI's DRM-free music will be priced on iTunes at US$1.29, Euro 1.29 or £0.99 for each song, compared to the current price of US$0.99, Euro 0.99 or 0.79. The DRM-free music will be available at 256K bps (bits per second) AAC, compared to today's quality of 128K bps AAC, Jobs said.

"Our research tells us that consumers would pay a higher price for a digital music file which they could use on any player," EMI's Nicoli said.

If consumers buy whole albums, rather than individual songs, the price for the DRM-free version, including the improved audio quality, will be the same as that of the DRM version, Jobs said. The music industry has been encouraging more album sales, which have been declining alongside the rise of digital music.

Customers will be able to "upgrade" their existing music collection to the new format by paying the difference in price for each song. For a library of 1,000 songs that should be about US$300 in the U.S.; Euro 300 in Europe and £200 in the U.K.

The catalogue will be made available in Australia in May. Local pricing is yet to be confirmed.

Jobs called for an end to the use of DRM in February, in a letter posted on Apple's Web site. Jobs' open letter argued that consumers would benefit because any player would be able to play music from any online retailer.

Reaction from the major music labels was mixed. Warner Music CEO Edgar Bronfman said the idea of DRM-free music was "without logic or merit." EMI appeared more receptive to Jobs' call, however. The company had already experimented with DRM-free music a couple of months earlier, when it offered MP3 files from Norah Jones and Relient K through Yahoo's music store.

"We've always argued that the best way to combat illegal traffic is to make legal content available at decent value and conveniently," Nicoli said on Monday.

Other EMI artists include Pink Floyd, Janet Jackson, Depeche Mode, Iron Maiden, Moby, Queen and The Beatles. Some speculated that EMI would announce Monday The Beatles' music would be on iTunes, but the group's music remains unavailable online, Nicoli said Monday. "We are working on that and we hope it happens soon," he said.

Jobs called Monday's deal "an opportunity for everybody to win."

"They customers win because they get what they want," he said. "They get higher quality audio and the safety net of knowing they can take this track and, without having to burn it to a CD, they can have it be interoperable. And music companies make a little more money in return for offering more value."

A switch to DRM-free music will be good news for consumers, said Bryan Wang, an analyst with InStat in Singapore. Speaking ahead of the announcement Monday, he said that consumers don't necessarily understand DRM and just want to be able to play purchased music on all their devices.

Removing the DRM won't necessarily mean an increase in piracy, he said. The illegal sharing of music tends to drop off as consumers enter adulthood and begin working, so sharing content among people over about 20 is not that common. "We don't expect the illegal transfer of music will be that common," he said.

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