Universal to test DRM-free downloads

 

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Posted on 10 Aug 2007 at 07:22

Universal Music is to begin testing DRM-free downloads. The record company announced that it plans to make thousands of albums and tracks available without usage restrictions for a trial period.

"The experiment will run from August to January and analyse such factors as consumer demand, price sensitivity and piracy in regards to the availability of open MP3s," Universal said in a statement.

It added that Google, which has no stated plans to open a music store, and Amazon, which is due to launch a digital service, will participate in the trial, but made no mention of Apple, whose iTunes Store is by far the market leader. However Universal recently declined to sign a new long-terms licence with Apple and hinted that not all of its artists would be available on iTunes in the future.

Universal spokesman Peter LoFrumento said that iTunes is being excluded in order to use it as a control group for measuring the impact on sales and on file sharing.

Universal has experimented with restriction-free downloads in the past, licensing around 1,000 albums to the anti-DRM service eMusic. However eMusic, which charges a lot less per track than Apple, was unable to meet the higher wholesale prices that Universal demanded in return for removing the usage limits. Nonetheless eMusic co-founder Bob Kohn said that the experiment had been "wildly successful".

Clearly Universal had a similar impression and it becomes the second of the four major record companies to embrace restriction-free downloading. Albeit in a less wholehearted way than EMI, which has made its whole catalogue available without DRM since April, though it charges around 25-30% more than its does for restricted tracks.

Whether EMI's decision has made much of a difference to its sales is not yet clear. It described initial results from sales through Apple's iTunes Plus as "good", but its latest quarterly results showed that digital sales rose by 26%, compared to 29% for Warner Music and 49% for Universal.

But EMI will have been cheered by evidence that DRM-free downloads are not making their way onto p2p file sharing networks. Research firm Big Champagne, which specialises in monitoring p2p traffic, says that the impact on sharing has been "statistically insignificant". CEO Eric Garland notes that there is little overlap between people who buy music from digital services such as iTunes, and people who upload tracks to p2p networks.

Author: Simon Aughton