MOTHERS OF INVENTION:
I.B. BAD ON THE DRM DEBATE

With CD sales declining at a more alarming rate than anyone had predicted, every new idea in the book is being considered by virtually every entity in an all-out attempt to come up with viable new business models. Most now believe this pervasive sense of urgency will serve to hasten an industry-wide adoption of DRM-free music, following EMI and Apple’s lead.

At this point, pretty much every major is quietly experimenting with selling unprotected song files. For the first time, then, there appears to be a collective willingness to embrace the open-formatted, DRM-free download model in an attempt to create ubiquity, which in the new world order could encompass Yahoo, Microsoft, AOL, MySpace, Google, Amazon and other present and potential music portals selling DRM-free song files that will play on all devices, including the iPod.

As talks between the Big Four and Apple intensify, the elephant in the negotiating room is the majors’ collective desire to break the iTunes stranglehold on online retail, and to that end, the majors are looking at Amazon as a possible first step. After all, Amazon is the #1 online retail site and the #11 most-trafficked site in the U.S. overall (#19 globally), as well as one of the most trusted, with millions of consumers having set up accounts, meaning that the transition from buying CDs to downloads should be an easy segue for Amazon customers.

It’s those plusses that have caused some to say that if anyone can compete with Apple in digital music, it may well be Amazon. Naysayers counter that it’s a stretch to assume Amazon will be any more successful at coming up with an interface that rivals iTunes than any other online retail entity has to this point, noting that the user experience is one of the key factors in determining any retail site’s viability, along with pricing and product availability. The ingeniously designed iTunes application is the other half of Apple’s wildly successful software/hardware equation, along with the iPod itself.

Amazon’s challenge is to find a way to approximate the iTunes/iPod seamlessness. It’s believed Amazon will launch its platform to coincide with iTunes’ unveiling of unprotected EMI music, and that a portion of the new store will offer DRM-free MP3s. This particular part of Amazon’s initiative could prove to be the prototype for the aforementioned new world order, as the music business and its online partners begin to connect the dots.

EMI’s decision to charge an extra 30 cents for unprotected, higher-quality song files has wonderers wondering whether there will be a sufficient demand for either of these improvements to make the move pay off. While EMI and Apple claim their research has shown that a higher bit rate will translate to additional sales, history has repeatedly shown that consumers haven’t responded to improved sound, and that’s more true than ever now, when the prevailing listening mode is the portable digital device, on which the iTunes standard 128 kbps can barely be distinguished from the coming 256 kbps premium version.