Universal Music Will Sell Songs Without Copy Protection

NYT
August 10, 2007
Universal Music Will Sell Songs Without Copy Protection
By JEFF LEEDS

Signaling another departure from the music industry’s longtime antipiracy strategy, the Universal Music Group will sell a significant portion of its catalog without the customary copy protection software for at least the next few months, the company announced yesterday.

Universal, the world’s biggest music conglomerate, said it would offer albums and songs without the software, known as digital rights management, through existing digital music retail services like RealNetworks and Wal-Mart, nascent services from Amazon.com and Google, and some artists’ Web sites.

But the music will not be offered D.R.M.-free through Apple’s iTunes, the leading music service. The use of copy protection software has become a major bone of contention in the digital music business, where iTunes accounts for the vast majority of download sales. The record labels generally have required that retailers place electronic locks to limit copying of music files.

But Apple’s proprietary D.R.M. does not work with most rivals’ devices or software — meaning that music sold by competing services cannot play on Apple’s popular iPod. Some record executives say they believe that the stalemate has capped the growth of digital music sales, which the industry is relying on more heavily as sales of plastic CDs slide.

The offer of Universal’s music under the new terms is being framed as a test, to run into January, allowing executives to study consumer demand and any effect on online piracy. A Universal decision to adopt the practice permanently would put pressure on other record companies to follow suit. That could stoke a wider debate about how to treat intellectual property in the digital era. Universal’s artists include the Black Eyed Peas and 50 Cent.

The effort is likely to be seen as part of the industry’s wider push to increase competition to iTunes and shift leverage away from Apple, which wields enormous influence over prices and other terms in digital music. A month ago, Universal notified Apple that it would not agree to a new long-term contract to sell music through iTunes.

Steven P. Jobs, Apple’s chief executive, made his position on copy protection software clear in February, when he posted a statement on the company’s Web site calling on the record companies’ to abandon their insistence on D.R.M., which he argued had largely failed to resolve the industry’s piracy woes.

So far, only one of the four major music companies, the EMI Group, embraced a wholesale shift away from the usual approach. EMI, which releases music by artists like Norah Jones and Coldplay, first struck a deal with iTunes in which songs without copy protection (and with better audio quality) would be sold at a higher price — $1.29 instead of the usual 99 cents for the restricted songs.

EMI has said the results so far have been promising. Under Universal’s arrangements with digital retailers, at least some of its new music will be sold in unprotected form for 99 cents, company executives said.