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Universal snubs iTunes for DRM free downloads

Written by Rich Fiscus (Google+) @ 11 Aug 2007 6:58 User comments (6)

Universal snubs iTunes for DRM free downloads Universal Music Group's plans for DRM free downloads apparently don't include iTunes. The downloads will be offered through Rhapsody as well as digital download stores run by Wal-Mart, Best Buy, and, as well as directly from artist websites.
UMG's test also includes a partnership with Google, which will run an AdWords campaign pointing users searching for DRM-free music to the download site gBox, which rewards music buyers with points toward earning gifts.

Although Universal says the decision not to include the industry dominating service from Apple is intended to use it as a control group, it's more noteable because of their very public complaints about iTunes' control over pricing.

Industry analyst, and vice president of Gartner, Mike McGuire, speculated that UMG may feel it can help level the playing Field in the digital music space with this move.

"iTunes sells 5 million songs a day," McGuire noted. "Nothing else comes close yet. Labels would prefer a more competitive marketplace."

Although it surely isn't UMG's intention, this would appear to be a move that tends to favor consumers as well. While companies like Universal would no doubt prefer a model where prices, and therefore their cut, could be increased as well as decreased, a truly competitive marketplace would almost have to result in reduced prices in the long run.

Investors clearly felt the move could help RealNetworks, with the company's stock surging higher by more than 7 percent Friday to $6.05. The move is also helps Amazon, which has said that its digital music store will only sell DRM-free tunes.


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6 user comments

111.8.2007 14:07

well while it could be a 'snub' at iTunes it could also be that they decided to use mp3 format as stated in the first article talking about this... and we all know that Jobs doesn't 'support' mp3 on iTunes because it doesn't tie the music to his device.

212.8.2007 08:47

Based on past history I tend to subscribe to the theory that it's an intentional snub of iTunes. I also happen to think it's a good thing.

Many people get too caught up in corporations that have the appearance of "the underdog." While I appreciate Apple competing with Microsoft, AMD competing with Intel, and numerous other instances where it looks like David is taking on Goliath, David is still a large corporation and they're not in it to be your friend. They're still in it to make money. If they can control prices to keep the profits high they will.

I hope music labels have spectacular success promoting services besides iTunes, and Apple is forced to price competitively as a result. A single company dominating the market, no matter what company that is, is eventually bad for consumers. Apple's iTunes pricing that doesn't reflect competition is no different than Microsoft keeping the price of Windows XP the same from the beginning to the end of its life cycle. If there were serious competition it wouldn't happen.

313.8.2007 10:58

For UMG, this is DRM-free thing is just a temporary experiment.

If it is successful, they won't be able to shut-out iTunes. That's like saying "We won't allow Wal-Mart to sell our CDs". They will only be hurting their own sales.

Of course, they don't want to sell DRM-free music at all! But, apparently BMG is having enough success with it that UMG can no longer ingnore the potential increase in sales.

This message has been edited since its posting. Latest edit was made on 13 Aug 2007 @ 11:16

413.8.2007 11:14

...and we all know that Jobs doesn't 'support' mp3 on iTunes because it doesn't tie the music to his device.
Apple is not stupid. If consumers start buying MP3s from other music services, iTunes will offer them too. If DRM suddenly goes-away (and hopefully it will), I'd bet Apple will be selling MP3s the next day.

Companies make money by giving consumers what they want... Well, not just what they "want", but what the are willing to pay for.

513.8.2007 21:28

Companies make money by giving consumers what they want... Well, not just what they "want", but what the are willing to pay for.
Then why don't they sell what the consumer wants? They sell what they want people to have, and all of the sheeple flock to it.

617.8.2007 18:25

Well if they do not go with iTunes their revenue maybe lower than what they would like it is really their choice at the end.

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