The era of DRM fades further with Sony BMG's switch

By Ed Oswald, BetaNews

January 4, 2008, 12:10 PM

The lone holdout of the big four music labels caved to pressure from the rest of the industry and will begin to sell tracks free of the restrictive technology.

EMI and Universal Music Group had announced their plans to drop DRM earlier in 2007, and Warner Music Group announced its plans in December. With Sony BMG's announcement, a majority of the top acts in music today will now be available in MP3 format.

The first tracks are likely to appear in the first quarter of this year, sources told The New York Times. With all four major labels now supporting DRM-free playback, it is likely only a matter of time before any smaller holdouts follow suit.

It also makes good business sense. Selling tracks without DRM means that iPod users can break free of iTunes and download songs from anywhere to play on their devices. Fairplay, Apple's proprietary DRM, kept those users locked into Apple's own service.

The first service to benefit from Sony BMG's new business model will be Amazon's MP3 music store, which is expected to feature Sony artists such as Justin Timberlake when it launches a promotion with Pepsi during this year's Super Bowl to give away 1 billion free songs.

Further plans are not yet known, as the Japanese electronics maker has declined to comment on the MP3 deal.

In any case, Amazon stands to benefit the most, and could end up becoming the first true competitor to iTunes, even for iPod users. With MP3 tracks from all four major labels, the service could market itself broadly as the first service to offer major acts for any player.

DRM may not be completely dead however, argues JupiterResearch analyst Mark Mulligan. "With DRM poised to disappear from premium download stores it can play a strong differentiation role for ad-supported and subsidized services," he said.

He continued to say that the next step would be DRM-free subscription services, which could effectively be considered licensed P2P. Some supporters of peer-to-peer technology have already been arguing for that point for a considerable amount of time.