The financial times this morning (no link, I read it on real paper) reports that though singles from EMI on iTunes will cost 30% more, whole albumms will cost exactly the same for non-DRM, high bit rate songs. This is quite clever from EMI. One of the big issues for all the record companies is that even when someone never pirates a thing, they buy less music because the buy just the songs they want and not the whole album. This is essentially a 30% discount on buying the full album in high quality. So if you were planning to buy a few songs, suddenly it might make sense to buy the whole album.
Even with volumes of digital sales rising, it’s not a like for like substitute. I’d guess that each single sold makes more money for the record company than an indentical product at the same price sold through retail – there has to be some 30-40% of margin and other costs in the retail chain. However when you’re only selling 2 songs where you would have sold a $15 album, you still loose. This is a smart move by EMI in so many ways. If they can convince Apple to stick with them on an exclusive basis for any period of time this will pay off handsomely.
Meanwhile in other news, Microsoft have annouced that the Zune will support the same DRM free music once EMI gets round to letting them. I tried to get some updated news on the Zune but the latest article I can find is dated last year – how is this player relevant even in the tiny alternative market? Does anyone even know a guy who knows a guy who owns one?

EMI and Apple have annouced that they will be selling DRM free music but it’s not that simple. The music will be vvery high quality (256bits instead of 128bit AAC) and cost 30% more ($1.29 – I’ve not seen UK pricing at this point).
Weirdly this is exactly what the DRM proponents have been saying DRM will bring up – greater choice in the way we’ll be able to buy music and video. There was supposed to be a $2.00 copy of ‘Mission Impossible’ that you could only watch on your television on weekends while the $20.00 copy allowed you to copy it to your iPod but not to your PSP.
Now the removal of DRM gives us these options. Very strange.
I’m very glad this happened but it does muddy the water somewhat – how are we supposed to compare DRM vs. non-DRM sales when they products are different and at different price points?
My thinking is that many people will just buy the restricted iPod versions anyway – I’m completely unable to tell the difference between songs at these quality levels and I own so much Apple hardware it’s irrelevant that I’m locked in – but audiophiles and a large percentage of regular people will buy the more expensive free version. I predict a 20% of people will find the extra value worth it.

A few months ago Steve Jobs wrote an open letter stating that Apple would be happy to sell DRM free tracks if the record labels would let them. Watching Channel 4 news now it seems EMI has folded. They’re expected to annouce that they will release their catalogue DRM free on iTunes. This is an incredible thing. I’ve always felt that underneath it all the record companies must have understood the subtleties of the arguments against DRM. Their war against consumers seemed doomed to fail but they continued nonetheless. Either they were incredibly stupid or there was something else going on. I find it difficult to believe that someone who runs a multi-billion dollar company is an idiot – even more difficult to think that all 4 leaders (and everyone who works for them) of 4 separate companies are idiots. Clearly they’re not.

This is a watershed in electronic rights. There is no way that the other record companies can continue to push DRM. EMI must show their shareholders that this did not hit sales. The other companies will not be able to continue an argument in the face of this kind of proof (of course I could be wrong and EMI sales tank but I’m confident they won’t).