Universal to Sell DRM-free Music

Since its inception, DRM (Digital Rights Management) quickly became point of contention with consumers. While complaints have been around pretty much since DRM was first implemented, the Sony rootkit fiasco has merely inflamed criticism.

Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes

For a while, it seemed that nothing would change music industry’s position on DRM – until EMI allowed the sale of DRM-free music on iTunes and other music stores. Some say that it would put pressure on other record labels to go DRM-free. Now, it seems, the pressure has forced Universal to go DRM-free – at least, DRM-free for some vendors.

Last month, Universal squared off with Apple. The record label refused to renew its contract with the major online music store. This opened the door for the possibility of Universal pulling their entire catalog out of Apple’s music store. This fueled a good amount of speculation as to what this move meant for the record label’s future. Some speculated it was designed to threaten Apple’s tight control of the music market.

Apple’s music store, which is designed to work seamlessly with the iPod, has a lot of control over the digital music business. Some wondered if Apple owned a monopoly. Whether or not it did constitute a monopoly is quickly becoming a separate matter. What many have also speculated is that Apple has tight control over pricing, thereby transferring the market power from the record labels right to Steve Jobs. Not a bad deal for Apple, but the deal allows little, if any, wiggle room for the major record labels.

Despite the controversy with Universal, EMI chose to stick with Apple’s iTunes. Not only have they chosen to stick with them, they also announced that they would begin selling DRM-free music. Since then, the DRM-free campaign moved on to other stores like Amazon.com. This clearly put pressure on the other major record labels to follow suit.

Whatever Universal’s reason is for resisting Apple, reports have surfaced that suggests that Universal is following suit with selling DRM-free music. The DRM-free music will be sold on services like RealNetworks, Wal-Mart, Amazon.com, Google, and “some artists’ web sites”. The move is said to be a trial move, testing to see how the market reacts when a major record labels stop selling DRM encoded music files.

With half of the major record labels adopting DRM-free solutions at this point, it may have a very negative effect on DRM vendors. Will a DRM vendors business model be thrown into question as a result? At this point, only time will tell.

Drew Wilson on Twitter: @icecube85 and Google+.

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