The Apple/EMI deal - Now it's up to the consumer to decide

Summary:When the world changes, even a little bit, it takes a little time to get used to it. Yesterday's announcement by EMI that it was to offer DRM-free music through iTunes was one of those changes that took a little time to get used to. But who's going to benefit from this new era of DRM-free music? My guess is that Apple and EMI will benefit far more from this than the consumer will.

When the world changes, even a little bit, it takes a little time to get used to it.  Yesterday's announcement by EMI that it was to offer DRM-free music through iTunes was one of those changes that took a little time to get used to.  But who's going to benefit from this new era of DRM-free music?  My guess is that Apple and EMI will benefit far more from this than the consumer will.

The main catch in this deal is that DRM-free music will cost more than the DRMed stuff.  Between 25 and 30 per cent more (25% if you live in the UK, 30% if you live in the US).  Why?  I'm not really sure.  I think that "DRM-free music" is somehow being touted as a value-added benefit, and since the bitrate is higher, it's pretty easy to justify jacking up the price. 

Note: This means that $25 buys you 19 DRM-free tunes (leaving you with 49 cents change), while the same cash will buy you 25 DRMed tunes (and leave you with 25 cents).

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Personally though, I feel that this increase in price is:

  • A "piracy tax" where consumers buying the DRM-free content are being charged extra because a few of these people will abuse the system and make the tracks they buy available for illegal download by others.
  • A sneaky way to raise the cost of tunes.
  • Or, a bit of both.

The clever part to this deal is that Apple and EMI can't lose.  For them, success or failure is a win-win situation.  Why?  Here are just a few of the reasons:

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  • First off, they get a ton of publicity, which is always a good thing. 
  • Second, it silences DRM critics. 
  • The move also silences Apple critics who claim that iTunes is monopolistic and locks out other devices.  Apple is finally unlocking part of the iTunes store to non-Apple devices.
  • This move also takes the DRM argument and puts it firmly in the lap of the consumer.  Do consumers really care about DRM or was the whole debate being fueled by anti-DRM lobby groups?  We'll now get a chance to find out.  If the public do want DRM-free music, they can get it, and have the pleasure of paying extra for it.  If they don't, Apple and EMI can say that they offered it but it wasn't what the public wanted (any future press release along these lines will gloss over the fact that the DRM-free audio costs more).
  • Apple and EMI also get to test whether claims made by the anti-DRM lobby that DRM doesn't curb piracy.  If piracy increases (something that's going to be hard to measure, but I'm suspicious enough to think that these DRM-free tunes could still be tagged in some way to make them easier to spot when they get in the wild) then DRM is needed (or the price of DRM-free content will need to rise further), if it doesn't, well, EMI and Apple have given the public what they wanted.
  • This also puts Apple and EMI's competitors on the back foot.  While this deal isn't exclusively between Apple and EMI and EMI wants to distribute free range content elsewhere, I'm pretty sure that there's going to be scrabbling for deals going on. 

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The real issues now are whether the paying public will pay extra for DRM-free content (free-range content if you like), and if they do, will they start rampantly file-sharing (in other words, DRM-free content turns good kids bad)?  Hmmm ... If this is going to work the consumer is going to have to put their money where their mouth is and make it work.  They're also going to have to behave themselves when they get their hands on the content.

Also, keep an eye on iPod sales over the next 12 months.  What kind of effect will disconnecting a part of iTunes (specifically the EMI catalog) from the iPod ecosystem have on sales?  Will this boost iPod sales or send them into decline?  Will Apple see  more iTunes sales or will that also decline?  Stay tuned!

This is an interesting experiment for sure, but I'm not so sure that this is the end of the line for DRM.  Apple or EMI could pull the plug on this at any point and go back to enthusiastically embracing DRM again.  If DRM-free tunes don't sell or if piracy starts to increase (even just a little), then the experiment could (and probably will) come to an end.

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The future of DRM is down to the consumer.  If you don't want it, get ready to pay for the privilege.

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Topics: Apple

About

Adrian Kingsley-Hughes is an internationally published technology author who has devoted over a decade to helping users get the most from technology -- whether that be by learning to program, building a PC from a pile of parts, or helping them get the most from their new MP3 player or digital camera.Adrian has authored/co-authored technic... Full Bio

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