Amazon, Warner Music Make a Play for iTunes Market, Leave DRM Protection in the Past
4 January 2008Amazon.com is making a large push against the iTunes-held online music market by signing Warner Music Group to its download service. Warner Music songs became available on the Amazon MP3 service last week. The two plan to make exclusive Warner tracks and special album bundles available for download via Amazon’s MP3 download service as well.
Amazon’s service, which launched in September, went live with music from Universal Music Group and EMI as well as thousands of independent labels. The addition of Warner Music leaves Sony BMG as the only major label holdout to offering DRM-free downloads through Amazon.
Unlike iTunes, which offers all individual tracks at 99 cents each, Amazon offers almost a million songs, one-third of its library, at 89 cents. It also takes advantage of its more traditional e-tail business by offering either $5 or $15 worth of free music when consumers buy any MP3 players through Amazon. If Apple offers any similar type of deal for folks who buy an iPod, we haven’t heard of it.
Although Apple managed to make a DRM-free music deal with EMI, the other major labels have snubbed the market-leading iTunes with their own DRM-free offerings. Apple has been inflexible with pricing and package options, which, in addition to keeping the record labels from making new deals, has also driven away NBC Universal, one of iTunes’ major video providers.
“By removing a barrier to the sale and enjoyment of audio downloads, we bring an energy-sapping debate to a close,” Warner Music chief executive Edgar Bronfman said in an e-mail to Warner employees. This move comes about four months after Universal announced it would sell unrestricted songs through Amazon and others, but not through iTunes. Warner, however, is currently looking into a deal to sell unprotected tracks through iTunes.
Warner Music might be looking to make up for the large drop in CD sales, which were down in the US by 14% in November according to Nielsen Soundscan.
Back in February of 2007, Steve Jobs asked the major record labels to abandon DRM, feeling the restrictions hurt the online music industry. Bronfman said then that this was “completely without logic or merit,” citing that protections for games, movies and other content was a standard.
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