Gigs & Bytes: And Then There Was One
Like songs from Universal Music Group and EMI, WMG tracks on Amazon MP3 are encoded as MP3s and are not copy-protected, making it almost hard to believe that it was less than a year ago when all the major record companies were insisting on digital rights management technology for their online offerings.
While frustrating consumers and generating ill-will toward the labels, DRM really hasn’t protected music from being pirated. Most of the pirated tunes available via P2P networks originated from unprotected CDs. And if the past few years of technological embarrassments are any indications, it’s pretty doggone difficult to copy-protect a CD and still keep it compatible with every CD player that’s ever been sold.
But that didn’t stop the labels from trying. The most costly and embarrassing episode of CD copy-protection would have to be the 2005 Sony / BMG rootkit episode, where the label used technology resulting in CDs placing malware on users computers, often with disastrous results such as making consumers’ computers vulnerable to security breaches.
And now the DRM pendulum is swinging the other way as the labels try to realize the same profits from online sales as they once did from over-the-counter CD sales.
But what is most significant about WMG dropping DRM is that the label is only doing it for tracks sold on Amazon, leaving many industry watchers speculating that this is yet another major-label dig against iTunes.
Currently, the only major label selling unprotected tracks on iTunes is EMI. With rumblings of iTunes discontent among the majors, mainly over control and pricing, Warner’s DRM-free Amazon debut has all the markings of a major label supporting what appears to be the first serious competition for online music dollars Apple has faced since launching the iTunes Music Store in 2003.
Then there’s the whole compatibility issue, with DRM-protected tunes, playability linked to selected players, such as protected tracks purchased from iTunes playing only on iPods. Because Amazon only sells MP3 downloads, all purchases play on all players, iPods included.
So far Amazon appears to be able to undercut iTunes’ standard 99 cents-per-track policy. Many Amazon downloads are priced at 89 cents, giving iPod owners another reason to switch from the company named after a fruit to the one named after a South American river.
So far Wall Street likes what WMG is doing with Amazon. Reuters reports that Warner Music shares rose 7 cents to $6.04 this morning on the New York Stock Exchange and Amazon shares rose $1.38 to $94.23 on Nasdaq.
Who knows? It might not be very much longer before we look back and wonder why the labels were once so insistent on DRM in the first place.