Monday, April 09, 2007

Marketing: The EMI 'DRM' Announcement

What does the EMI announcement - that they are prepared to drop DRM albeit in return for an increase in price - mean for labels, artistes, brands, retailers and consumers?

  • For labels, it will make little difference unless this move leads to a significant increase in the market value as a whole. The vast majority of Indies already supply in MP3, and those who don’t may now be convinced. The remaining three Majors are already under pressure to drop DRM and if EMI's sales rise, are likely to follow. This will be due to their marketing and sales departments finally gaining the upper hand against the restrictive instincts of their Legal and IT departments who currently control Digital policy.
  • For artistes on EMI labels, this move means they can sell MP3 tracks from their website or supply music via Bluetooth at gigs. It is currently very difficult to incorporate DRM into small scale solutions, and this obstacle is now dropped. Music must still be licensed from EMI but there are many more distribution opportunities.
  • Advertising brands can supply EMI music in far more campaigns and consumer-friendly promotions. For example, “Music giveaways”, where tracks are bought in advance, can be implemented without the need for complex DRM solutions. By giving away music in MP3 brands can be assured of the hitting the widest market.
  • Retailers will naturally be clamouring for the new format from EMI. The major players, iTunes, Napster, Musicnet etc, will rapidly adopt the new format and variable pricing models. Perhaps more exciting however, is that ‘niche’ retailers like Bleep, DJ Download and can now begin to sell dance, jazz or classical content in MP3, dramatically increasing the quality of their catalogue.
  • Consumers will be able to buy music from a wide range of stores and play it on their digital player. Although the announcement was made with Apple, it may be iTunes that suffers most since they continue to supply tracks, not in MP3 but in un-protected AAC. This means music bought at iTunes works in far fewer players than an MP3 track bought at, say, HMV or Napster.

Million has long campaigned for labels to drop DRM in it’s current restrictive form. We therefore welcome this move, although are disappointed EMI felt it necessary to increase the price. Ironically, Million feel an increase in price is justified for tracks with more DRM not less, the crucial difference being it must be a new form of DRM that protects the consumer, not restricts them.

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