UMG CONTINUES DRM-FREE TESTING

If you can’t beat ‘em, join ‘em.

UMG continues trying to find a reasonable online alternative to iTunes.

The world’s leading music group will continue testing digital sales of tracks and albums DRM-free by making thousands of its albums and tracks available from its digital repertoire in MP3 form for a limited time.

Commented Chairman/CEO Doug Morris: "Universal Music Group is committed to exploring new ways to expand the availability of our artists' music online, while offering consumers the most choice in how and where they purchase and enjoy our music. This test, which is a continuation of a series of tests that UMG began conducting earlier in the year, will provide valuable insights into the implications of selling our music in an open format. See, you can have your Apple and eat it, too."

The test will run from August to January and analyze such factors as consumer demand, price sensitivity and piracy in regards to the availability of open MP3s.

MP3s can be played on a full range of devices including dedicated MP3 players, mobile phones and the iPod. Regardless of the outcome of these tests, UMG will continue to support innovative digital models such as subscription and ad-supported services which rely on DRM as an enabling technology.

Albums and tracks that will be available during this test run the gamut from artists such as Amy Winehouse, Fall Out Boy, 50 Cent, Black Eyed Peas, Daddy Yankee, Mika, The Pussycat Dolls, Gwen Stefani, Maroon 5, Dr. Dre, Sting, Sugarland, Diana Krall, Paulina Rubio, Shania Twain, Nelly and Prince, to catalog acts such as Bing Crosby, Elvis Costello, Reba McEntire, Count Basie, Dizzy Gillespie, Stevie Wonder, Johnny Cash and Patsy Cline, among many others.

Participants including Google, Wal-Mart, Best Buy Digital Music Store, Rhapsody, Transworld, Passalong Networks, Amazon.com and Puretracks, will offer downloads to consumers in the DRM-free audio format of their choice in a variety of bit rates. For the most part, the DRM-free downloads will be offered at standard wholesale prices.

As part of this test, Universal will also be driving traffic to DRM-free downloads using Google's AdWords advertising program. Google ads will connect consumers directly to digital retailer gBox, Inc. (www.gbox.com) download store making the search and buying process as simple as possible. Because many consumers are searching for music and music related news and information online, Google is a powerful way to drive consumers to this test.

In addition, DRM-free downloads will also be available through artist and label-branded websites, including will.i.am.com, sum41.com, evefans.com, www.common-music.com, ryan-adams.com, blaqkaudio.com, dianakrall.com, sectionquartet.com, as well as defjam.com, islandrecords.com and classicsandjazz.co.uk, among many others.

UMG now joins EMI as the second major music group to sell protection-free downloads. 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. UMG will not offer the same arrangement with Apple.