EMI, Apple partner on DRM-free premium music

update EMI Group will soon sell digital music with better sound quality and no digital rights management restrictions through Apple's iTunes Store.

EMI's entire digital music catalog will be available in premium DRM-free form via iTunes in May, the music label said Monday at a press conference in London. Beatles tunes under EMI's control, however, are not part of the plan.

Higher-quality music files, which will play on any computer and any digital-audio player, will not replace the copy-protected EMI music currently sold through iTunes. Rather, they will complement the standard 99-cent iTunes downloads and will be sold at a premium: $1.29 per song.

Consumers who have already purchased EMI tracks containing Apple's FairPlay copy protection will be able to upgrade them to the premium version for 30 cents, EMI said. Full albums in DRM-free form can be bought at the same price as standard iTunes albums.

"We are committed to embracing change, and to developing products and services that consumers really want to buy," said Eric Nicoli, chief executive of EMI. Nicoli cited internal EMI tests in which higher-quality, DRM-free songs outsold its lower-quality, copy-protected counterparts 10-to-1.

The higher sound quality of EMI's premium tracks is produced by increasing their bit rate, which translates to larger files with reduced compression.

After initially selling the premium DRM-free music through Apple, EMI plans to expand the program to other music outlets. Retailers partnering with EMI, which also plans to remove DRM from its video downloads, will be able to choose from a variety of levels of sound quality. Retailers will also be able to choose whether to sell files in the MP3, WMA or AAC format.

In iTunes, music will be sold in a 256 kilobit-per-second AAC format.

The packed press conference at EMI's London headquarters featured a performance by EMI recording artist The Good, The Bad and The Queen, as well as a guest appearance by Apple CEO Steve Jobs.

Jobs, who stressed the need for higher-quality music with the rise of high-fidelity home speaker systems, called EMI's move "the next big step forward in the digital-music revolution--the movement to completely interoperable DRM-free music." He added that "Apple will reach out to all the major and independent labels to give them the same opportunity."

Jobs expressed confidence in Apple's plan to offer the premium DRM-free tracks alongside standard ones. "What we're adding is a choice--a new choice," Jobs said regarding Apple's decision to make available two levels of sound quality and of DRM restriction. He suggested that half of iTunes' music tracks will be available in both DRM-loaded and DRM-free form by the end of 2007.

"EMI is pioneering something that I think is going to become very popular," Jobs said when asked if other music labels would likely add DRM-free music to their iTunes catalog.

But James McQuivey, an analyst at Forrester Research, said he believes that other labels may approach the prospect of DRM-free music sales with trepidation.

"The timing of when they sign on is going to be what's interesting to watch," McQuivey said. "They will eventually, but eventually could mean a year from now. Now that a major label has done it, they're all going to want to wait and see the proof that it worked."

In February, Jobs released an open letter to record companies, encouraging them to abandon DRM restrictions and claiming that Apple had only implemented the controversial system because the four major record labels would not have otherwise signed up with iTunes.

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In the recent past, EMI has put forth some initiatives in digital-music distribution that could be considered somewhat experimental, most notably offering its music catalog to peer-to-peer services like Mashboxx and iMesh. But until this point, DRM-free music had been largely the domain of services like eMusic, with songs limited to those from independent labels.

"This is something that Apple wants, but it's something that EMI needs," McQuivey said.

"Together with the RIAA, (EMI) was one of the loudest voices among the labels sponsoring the aggressive lawsuits against people who were file-sharing music," McQuivey said of the Recording Industry Association of America's persistent legal battles against music pirates using peer-to-peer networks. "It's not to say that you can't aggressively pursue file sharers and develop a digital strategy, but they didn't. They chose to focus on the lawsuits, hoping to keep the CD business alive."

Last year, iTunes rival Yahoo Music tested the DRM-free waters by offering a Jesse McCartney album and a Jessica Simpson single for sale with no copy protection.

EMI announced the press conference on Sunday, leading to much speculation of whether it was a prank--"We are acutely aware that the invitations were issued on April Fools' Day," Nicoli observed--and whether the event might have been held to unveil the availability of songs by The Beatles on iTunes.

Music from the Fab Four has been released by EMI since 1962 and is currently unavailable for legal digital download anywhere on the Internet. When a reporter asked Jobs whether a Beatles deal with EMI was upcoming, Jobs replied, "I want to know that, too." Nicoli stressed that "we're working on it."

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