Record label holdouts pushed to offer DRM-free songs in MP3

With EMI and Universal seeing success in offering its catalogs in MP3, remaining holdouts Sony BMG and Warner Music Group are facing pressure to do the same.

Sources are telling Billboard magazine that several factors are coming together to force the labels' hands. First, Pepsi is planning an MP3 music giveaway for next year. In addition, Wal-Mart is now telling labels to start offering DRM-less tracks or risk delisting from their online store.

The reasoning for this seems rather simple. With music retailers unable so far to crack into the iPod and iTunes, the only remaining way to take on Apple is through offering MP3. This way, those consumers can still use non-Apple music services.

EMI and Universal's forays into the world of DRM-free music have so far done well. Universal's test of offering its catalog in MP3 has done well, and sources say it is likely to end up officially offering it soon. EMI has been selling DRM free music since May of this year, beginning through iTunes.

Now with a promotion on the way for next year from Pepsi, the pressure is on. Instead of its typical partner iTunes, the soda company has decided to go with Amazon as its partner. As part of this deal, up to 1 billion MP3 tracks are expected to be given away.

In order for it to work sans iTunes, it is imperative that these songs be given away without DRM. While negotiations are said to be ongoing with Sony, it is not clear whether or not any deal is close to being reached.

Wal-Mart is adding to the pressure, and has been rumored to have issued an ultimatum to both companies over DRM. Unless the two labels offer MP3 soon, the retailer has apparently threatened to pull their catalogs from the store sometime within the next two months.

The company has so far refused to comment on the speculation. It holds a 2% market share in digital music, according to Billboard.