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Warner goes DRM-free

Warner Music Group --home of Lupe Fiasco,  Faith Hill and a bunch of acts in between -- announced today that it would sell MP3 versions of its artists' songs on Amazon. Now, Sony BMG stands as the only major label still insisting on wrapping its downloads in DRM. WMG chief Edgar Bronfman Jr. said the deal with Amazon was the first of many to come in the weeks and months ahead, and he dropped an intriguing hint at a new approach to unauthorized file-sharing.

Most observers will probably credit the dramatic reversal by WMG to Apple CEO Steve Jobs and his appeal in February for record companies to abandon DRM. Bronfman's response at the time was an unequivocal no, as reported by Computerworld magazine:

"The notion that music does not deserve the same protection as software, film, video games or other intellectual property, simply because there is an unprotected legacy product in the physical world, is completely without logic or merit."

But I'm more inclined to give credit to the drumbeat pounded out by Apple's competitors, including eMusic, Yahoo and RealNetworks, who have lobbied the major labels for more than a year to support MP3. The problem these competitors underlined was compatibility: the different flavors of DRM in the downloadable music market were confounding consumers, frustrating music fans and stunting growth.

WMG held out hope that consumer-electronics and software companies could find a solution to the compatibility problem, as the mobile-phone industry has done. But in the months after Job issued his manifesto, it's only become more clear to WMG that waiting for DRM interoperability is like waiting for Godot.

In an e-mail to WMG staffers today, Bronfman laid out his thinking (download it here). Echoing recent comments that the company was wrong to fight consumers over new technology, Bronfman's memo focuses on the opportunities that will open now that WMG isn't insisting on DRM for its permanent downloads.   

Many things will change.  Most immediately, vastly improved opportunities for the current group of online retailers will spring up.  And, over time, we believe there will be a significant proliferation of new online stores.  This environment will promote yet another change, one that benefits consumers, artists and music companies alike:  healthy competition among retailers.

As always, competition will accelerate innovation.  As we activate new digital retail partnerships, we plan to play a very energetic role in driving that innovation.  We’ll develop more feature-rich, music-based digital products.  And dramatically superior delivery platforms will do many things:  transform the relationship between and among consumers, labels and artists; take advantage of all the platforms and devices on which people experience music; reward registered purchasers with follow-up delivery of special and unique content; and provide new opportunities to enhance the connection between artists and their fans.

By providing an immediate interoperable solution to retail partners who are committed to working with us to deliver these new and more robust music-based experiences, we'll encourage more consumption of existing products while introducing consumers to new and better ones.

He adds, "there are also opportunities for us to monetize the unauthorized flow of our artists’ audio content on the Internet, both as a company and as an industry.  You can expect more developments on this front next year, and you can also expect us to demonstrate leadership in creating new business models and forming new partnerships that will enable us to generate revenue from the flow of this content." All righty then. I can't wait to see that that might look like.

It should be noted that WMG isn't giving up DRM completely; it will still use the technology to segment the market into sales and subscriptions, for example. That strikes me as reasonable -- electronic locks let services such as Rhapsody give people access to a virtual jukebox for a much smaller monthly fee than they would have to charge if their customers could make permanent copies of those songs -- but I acknowledge that some thoughtful people disagree with me.

It will be interesting to see how long Sony BMG remains the only major not on Amazon's MP3 site. My guess is that its holdout will end early next year, when Pepsi is reportedly set to launch a year-long MP3 promotion with Amazon.


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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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