PrintApril 2, 2007
Music industry awakens from digital slumber
Apple and EMI announced today that they will begin offering their entire catalog via Apple's iTunes in May. Apple CEO Steve Jobs and EMI CEO Eric Nicoli made their joint announcement today in London. EMI is the first of the big four music labels to embrace Apple's wildly successful iTunes music distribution channel. This marks a major industry shift in web distribution of music and video.
Apparently, EMI has not reached a distribution agreement with the owners of the Beatles catalog as this is not covered under this announcement. Aside from the Beatles, EMI owns the rights to artists such as Pink Floyd and Britney Spears and many others.
EMI and Apple also announceed that the music will be made available "Digital Rights Management" free (DRM). This can only be described as a radical step by an industry that up till now has been desperately protecting their franchise rather than migrating to the inexorable reality of web distribution.
There is little doubt that the EMI/Apple alliance will have huge repercussions on content access and pricing across the web. Content owners and providers have been struggling with these questions as the web has evolved into a content distribution dynamo. Nicoli suggested that digital music distribution is still in its infancy.
A blog dedicated to Apple sums up the strategic business judgment of Apple and EMI entering into this alliance:
"A deal between Apple (AAPL) and EMI solves two problems for Apple: how to satisfy critics of its FairPlay anti-piracy system while appeasing those music publishers who still demand some kind of protection of their intellectual property."The solution: sell higher quality downloads, free of digital rights management (DRM) copy protection, for a higher price. It serves Apple, because anything that moves more titles through its music store and onto iPods feeds its bottom line and solidifies it's [sic] position as the dominant purveyor of digital music. It also puts Steve Jobs squarely in the anti-DRM camp while answering critics -- especially in Europe -- of a closed system that prevented songs bought from Apple from playing on rival MP3 players."
The music labels have had a very difficult time adapting to the rapid shift from from physical retail stores to web distribution. The recording industry has always been very conservative and stubbornly resistant to change. EMI was compelled to do this only when it became exceedingly obvious that their business evaporating into thin air right in front of their eyes.
