UMG testing sale of unrestricted tracks
By ALEX VEIGA,
AP Business Writer
Universal Music Group said Thursday it will sell digital music from artists such as Sting, 50 Cent and Stevie Wonder without the customary copy-protection technology for a limited time.
Tracks from thousands of albums will be available for purchase on the recording artists' Web sites and through several established online music retailers, although Universal is excluding Apple Inc.'s iTunes store, the No. 1 online music retailer.
The songs, however, will play on Apple's market-leading iPods, as well as the slew of other devices compatible with the MP3 format.
Although many independent music labels have for years sold their tunes without copy restrictions, the major recording companies have insisted on so-called digital-rights management, or DRM, technology in hopes of curbing online piracy.
Earlier this year, Britain's EMI Group PLC became the first of the major labels to embrace DRM-free tunes, letting Apple sell versions of songs with higher audio quality and without any built-in copying hurdles.
The test by Vivendi SA's Universal Music Group, while only encompassing a portion of its catalog, is significant because Universal is the world's largest recording company. That raises the prospect that other major labels could follow.
"Clearly the handwriting is on the wall for DRM-protected content," said Michael Gartenberg, an analyst with Jupiter Research. "We are seeing more of the players fall as they recognize that it's just a hassle for the consumer and doesn't really help the piracy problem."
DRM technology is designed to block or set limits on copying and CD burning.
Although DRM can help stem illegal copying, it can also frustrate consumers by limiting the type of device or number of computers on which they can listen. Copy-protected songs sold through iTunes generally won't play on devices other than the iPod, and iPods won't play DRM-enabled songs bought at rival music stores.
By excluding iTunes from its test, Universal is looking to undermine Apple's hold on the online music market, Gartenberg said.
"There's no doubt these guys are poking a stick at Apple," he said.
Universal Music spokesman Peter LoFrumento said, however, that the company isn't selling DRM-free tracks on iTunes for now so it could use the Apple store as a control group for measuring the impact on pricing, piracy and sales.
In a statement, Universal Music Chairman and CEO Doug Morris said the test is one of many the company is conducting this year and "will provide valuable insights into the implications of selling our music in an open format."
"Universal Music Group is committed to exploring new ways to expand the availability of our artists' music online, while offering consumers the most choice in how and where they purchase and enjoy our music," Morris said.
Apple spokesman Tom Neumayr said the company had no comment.
Universal Music will make DRM-free songs available Aug. 21 to Jan. 31.
Regardless of whether it ultimately decides to continue selling DRM-free tracks beyond that, Universal said it plans to support online music subscription services and ad-supported download sites that rely on copy-protection technology.
Among the online retailers that will be selling the tracks are Amazon.com Inc., Google Inc., Wal-Mart Stores Inc., Best Buy Co., RealNetworks Inc.'s Rhapsody, Transworld, PassAlong Networks and Puretracks Inc., according to Universal.
The retailers are expected to sell the tracks for 99 cents and in a variety of bit rates. Universal will be offering the tracks in the MP3 format, but the retailers will be free to sell the tracks in any DRM-free format they choose.
Best Buy plans to sell the songs in the MP3 format for 99 cents each, said Mehrdad Akbar, an executive in the retailer's music division.
"This is pretty exiting for us and it's something we feel consumers have been asking for," Akbar said. "We're hoping that this will set the path for everyone to move toward the MP3 format."
Earlier this summer, Universal Music broke ranks with other major labels and declined to renew a one-year music licensing deal to sell its recordings on iTunes. The record company opted instead to enter into month-by-month arrangements similar to deals it has with other major online music retailers.
On the Net:
Universal Music Group: http://new.umusic.com
Apple Inc.: http://www.apple.com
Copyright ¬© 2007 The Associated Press.