NMB: Dropping DRM

This is the second in a series of article about The New Music Business.

EMII’ve been a bit out of pocket this week as I’m on vacation, but even so I noticed the news concerning EMI’s decision to license DRM free tracks to Apple for sale in the iTunes Music Store.

DRM, for those that don’t know, stands for Digital Rights Management. Basically DRM is copy protection. It’s purpose is to prevent consumers who purchased the music as a digital download from coping that track at will. In the case of iTunes, some coping has always been allowed. You can burn discs containing the tracks you downloaded and you can copy them to a limited number of computers. The large disadvantage for consumers has been the lack of freedom this brings. If you buy DRM enabled tracks from iTunes you can only play them on an Apple iPod, not another mp3 player of your choice. The new DRM free tracks give you that freedom, but at a price…for everyone.

The DRM free tracks will be sold in the iTunes music store, right alongside the standard DRM enabled tracks, but at an increased price. If you want the flexibility of DRM free, the track will cost you $0.30 more at $1.29 each. And iTunes still won’t sync with another device so you’ll have to take those tracks outside the nicely organized iTunes environment to load them onto something other than an iPod. The tracks also come at a higher resolution than the standard tracks, jumping from a bit rate of 128 kbps to 256 kbps.

The consensus of analysis seems to be that increased bit rates are good for everyone, but that’s about it. DRM free is nice, but increased price isn’t. Add to that the increased confusion of the consumer experience when trying to purchase tracks, and many people feel this isn’t that good a thing for the iTunes store. I think the real test will be to see if the other major labels follow EMI’s lead. If they do, I would guess Apple will drop the DRM tracks altogether, even if it means an increased track price in the store. You’d be back to a single track price standard, with higher bit rates and no DRM.

Will any of this matter to consumers? Will they buy more tracks rather downloading them illegally? You tell me…