EMI To Sell DRM-Free Music
EMI, the world’s third largest record company, announced yesterday that it will sell its music without DRM (copy protection) on Apple’s iTunes Music Store. Songs will be available in two formats: the original DRMed format for the original $0.99 price, or a higher-fidelity DRM-free format for $1.29.
This is a huge step forward for EMI and the industry. Given the consumer demand for DRM-free music, and the inability of DRM to stop infringement, it was only a matter of time before the industry made this move. But there was considerable reluctance to take the first step, partly because a generation of industry executives had backed DRM-based strategies. The industry orthodoxy has been that DRM (a) reduces infringement a lot, and (b) doesn’t lower customer demand much. But EMI must disbelieve at least one of these two propositions; if not, its new strategy is irrational. (If removing DRM increases piracy a lot but doesn’t create many new customers, then it will cost EMI money.) Now that EMI has broken the ice, the migration to DRM-free music can proceed, to the ultimate benefit of record companies and law-abiding customers alike.
Still, it’s interesting how EMI and Apple decided to do this. The simple step would have been to sell only DRM-free music, at the familiar $0.99 price point, or perhaps at a higher price point. Instead, the companies chose to offer two versions, and to bundle DRM-freedom with higher fidelity, with a differentiated price 30% above the still-available original.
Why bundle higher fidelity with DRM-freedom? It seems unlikely that the customers who want higher fidelity are the same ones who want DRM-freedom. (Cory Doctorow argues that customers who want one are probably less likely to want the other.) Given the importance of [...]
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