Why Wal-Mart’s DRM-Free Tunes Will Change the Way You Buy Music

21 Aug

DRM-Free Music from Wal-Mart Great news was announced today for music fans, and from an unusual source: Wal-Mart. A time when we can purchase our music online and do what we like with it (share it, copy it, play it on whatever device we like) is finally about to become a reality. From Reuters:

Wal-Mart, the world’s largest retailer, said its new MP3 music catalog included thousands of albums and songs from major record labels like Vivendi’s Universal Music Group and EMI Group without copy-protection software, known as digital rights management.

Wal-Mart said it would sell the “DRM-free” MP3 downloads of music by artists like the Rolling Stones, Amy Winehouse and Maroon 5 for 94 cents per track or $9.22 per album. It said the new format let customers play music on almost any device, including iPods, iPhones and Microsoft Corp’s Zune portable media player.

The news from Wal-Mart is going to mean a big change for the industry, and for two important reasons:

  • Wal-Mart is such a powerful competitor, it virtually guarantees that other music retailers (e.g. iTunes) will have to follow suit and reduce their prices on DRM-free music in order to keep customers
  • Wal-Mart drives such sales volume, Sony BMG and Warner Music will soon realize that they are missing out on a large number of potential sales by not offering their music in DRM-free format as well, putting pressure on them and their artists to come to an agreement to join Universal and EMI

Until recently, the buyer of digital music was given fewer rights for the use of his or her music than the buyer of a traditional CD. Recording companies required that digital music be protected in Digital Rights Management (DRM) software, in an effort to combat the online piracy of music. This created the frustrating situation wherein music bought on Apple’s iTunes store [by far the largest with 80% market share in the US] could only be played on one type of MP3 player: the iPod. Apple justified this by saying that its DRM software would be compromised if it was shared with other hardware manufacturers.

The first major progress toward giving music buyers back their rights came several months ago when Steve Jobs and Apple advocated that music should be available to consumers in a DRM-free format, resulting a few weeks later in the advent of “premium” iTunes downloads without DRM for an extra $.20 per song. It was a move in the right direction, but many songs remain unavailable without DRM, and paying more for the identical song just to get the same rights you had if you had bought the CD seemed unfair.

Soon we will quickly see both a drop in the price of DRM-free music and the unlocking of music from more recording labels. Thanks Wal-Mart.

Read More:

[And thanks Engadget for the graphic!]

One Response to “Why Wal-Mart’s DRM-Free Tunes Will Change the Way You Buy Music”

  1. Tony August 21, 2007 at 9:42 pm #

    Was this Tony-bait? I think so…

    Have you ever used Wal-Mart’s music download service? Known anyone who has? Their brick-and-mortar dominance will always make waves, but their online offerings rarely make any kind of impact at all. It’s good they can use their top-CD-seller status to get a better deal out of labels than Apple (or others), but isn’t going to make anyone switch to their service, I can’t imagine.

    Good point though – hopefully a step in th right direction.

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