Friday, January 11, 2008

Amazon Convinces Sony To Go DRM-Free

The image “” cannot be displayed, because it contains errors. on Thursday announced a new deal with Sony BMG to sell its digital music without copy protection. Sony is the last of the major record labels to jump on the Digital Rights Management-free bandwagon.

Amazon's DRM-free MP3 digital music store will now feature music from all four major labels -- Sony, Universal Music Group, Warner Music Group and EMI -- as well as more than 33,000 independent labels. The MP3 songs are playable on virtually any digital music-capable device, including PCs, Macs, iPods, Zunes, Zens, iPhones, RAZRs and BlackBerrys. Sony's music will debut on later this month.

"We are excited to be working with Amazon as they continue to build new markets for digital music," Thomas Hesse, president of Sony BMG Music Entertainment's Global Digital Business & U.S. Sales, said in a statement. "We are constantly exploring new ways of making our music available to consumers in the physical space, over the Internet and through mobile phones, and this initiative is the newest element of our ongoing campaign to bring our music to fans wherever they happen to be."

Moving In on iTunes

Launched in September 2007, Amazon MP3 offers the largest selection of a la carte DRM-free MP3 music downloads, which now includes over 3.1 million songs from more than 270,000 artists. Every song and album in the Amazon MP3 music download store is encoded at 256 Kbps to deliver high audio quality.'s pricing scheme is slightly lower than iTunes in many cases. iTunes offers a standard 99-cent price tag on its singles. Most songs available on Amazon MP3 are priced from 89 cents to 99 cents, with more than 1 million of the over 3.1 million songs priced at 89 cents. Most of the top 100 best-selling songs are 89 cents; most albums are priced from $5.99 to $9.99; and most of the top 100 best-selling albums are $8.99 or less.

Amazon makes digital music downloads available through its 1-Click shopping feature and offers an Amazon MP3 Downloader that streamlines downloads to PCs or digital devices.

Path to Redemption?

With a rapidly changing record industry, Sony seemingly had little choice about its move to DRM-free digital music downloads. According to music industry news site, total album sales last year dropped nearly 15 percent. Rap album sales suffered dramatically with a 30 percent sales drop.

Earlier this week, Sony debuted MusicPass, a $12.99 gift card sold at retail stores that entitles the buyer to download a DRM-free album of MP3s online. MusicPass and the deal are both moves to help Sony compete with other labels and services that have already begun selling DRM-free MP3s on Amazon and elsewhere.

"Sony had issues with trying to balance the protection of its intellectual property with being consumer friendly. Sony is realizing that it's just not working," said Tim Deal, an analyst at Pike & Fischer. "Sony still needs to come a long way to be more pro-consumer and less guarded about its content."

Sony should have been on the forefront of the digital music revolution, Deal noted, but has failed on a number of levels, including poor marketing, mismanaged product introductions and coming late to the table with digital downloads. "Sony's concern for Digital Rights Management was so all-consuming that it put a bad taste in consumers' mouths," Deal said. "Perhaps offering DRM-free music is part of their path to redemption."