DRM: what’s next ?

“Message from Jeremy: To all Tech IT Easy readers, who could obviously not necessarily remember the initial announcement, I have invited my friend Steve to help me try to provide you, dear readership, with everyday better technology insights. Steve’s mission statement is that there’s no mission statement: what matters most here is to raise the right issues on underlying market trends, bringing to light new software, Internet services and consumer electronic devices. Steve, the floor is yours…”

OK, so there’s a big deal going on right now about digital music. A few hours ago, Apple and EMI held a joint conference in London. And here’s the good news :

 Apple’s music store, iTMS, is going to sell DRM-free music within a few weeks. Basically, all of EMI’s repertoire will be available in high quality on iTMS - files will be priced slightly higher, while albums will still cost the same 9.99€.

Although it doesn’t really come as a surprise (EMI has long stood against DRMs, and previously experimented selling DRM free music), this is still a big move from one of the leading music industry player. This is the first time that DRM-free files are sent on iTMS, world’s first online music retailer. This is the first time that a major announce a full availability of its catalogue in such format.  On top of this, EMI is said to be willing to purchase another music powerhouse: Warner Music.

 So the question now is:  what’s next ? Here’s my call :

1) The other majors will have no choice but follow EMI. I predict a huge success for these “premium” music files, not only because they are encoded with a 256K bitrate (something that classical music lovers really enjoy), but also because you can now use them on any kind of MP3 device, and not just on Apple’s highly successful iPods.

• This is bad news for Apple who might also sell less iPods since the bundling of mp3 players and music store was instrumental in the success of these devices; 
• This is good news for iTMS since iPods are facing a growing competition (including the Zune from…What’s that company again ? Jeremy, help me there );
• This is excellent news for iTunes, a fantastic software that definitely appealed even to Windows users (despite its numerous bugs), but which is still unable to work with any non-Apple mp3 player for high quality files (only conventional MP3s can be transferred: no AAC, mp4, or WMA there). We could reasonably guess that iTunes “market share” – it is a free player – will soar in the forthcoming months. Apple will surely leverage this by pushing forward Quicktime, included in iTunes, and the iTMS. Remember that the store already sells videos and TV series. Apple is desperately trying to extend its catalogue. And since TV series are both highly demanded and fairly priced (in comparison with music files), the iTMS might generate in a near future far more cash than it did previously.

All in all, here’s my understanding of all this: Apple might be anticipating the slowdown of iPods sales, by a sharp increase in revenue streams from the iTunes Store. Besides, Apple would grab a better share of the promising online video market if iTunes is the default mp3 player in all PCs – and this means that Steve Jobs will try anything to get its offer more attractive for customers. Including destroying one of the pillar of online music business: DRMs.