Monday, April 02, 2007

EMI Ends Copy Restrictions on Songs -- First Major Label to Do So

As anticipated several weeks ago, EMI and Apple are expected to announce today that EMI will immediately license its songs to Apple without requiring copy restrictions (or "DRM", digital rights management). This means that consumers will be able to buy/download songs on iTunes from EMI artists -- such as Coldplay, Norah Jones and the Rolling Stones -- in the popular and flexible MP3 format. Accordingly, for the first time, consumers will be able to easily transfer those songs to non-iPod devices (such as cell phones) and will be able to burn those songs onto discs without restriction.

With this move, EMI -- the world's fourth-largest record label -- becomes the first major label to agree to license its catalog for online distribution without copy restrictions/protections. And, in the wake of recent reports of continuing sharp sales declines in the music industry, this puts pressure on the other major labels to follow suit in order to reverse this troubling trend. Make no mistake -- this move by EMI represents a sea-change for the music industry. It also represents a sea-change for Apple and iTunes, since Apple critics have long argued that Apple's use of its own DRM (called "FairPlay") -- which permitted customers to play back their iTunes purchased tracks only on iPod devices -- enabled Apple to command roughly 80% market share in the digital music space.