Posted By Paul Kafasis on April 2nd, 2007

This morning, Apple and EMI made a surprise announcement regarding the iTunes store. This announcement could signal big changes ahead for the world of downloadable audio and possibly video as well. Let’s do a little Q & A:

What happened?

EMI, one of the world’s Big Four major record labels¹, has agreed to sell their entire digital catalog on the iTunes Store with no Digital Rights Management (DRM) protection. In doing so, they’ll become the first major label to offer audio on the iTunes Store without protection.

What is DRM?

Briefly, DRM is any technology which attempts to prevent unauthorized use of digital media. Because it’s possible to make an infinite number of copies of a digital file, content owners have used DRM in an attempt to prevent piracy.

As it applies to downloadable audio files, DRM generally restricts the ways in which a purchased file may be used. These limitations often include a restriction on the number of computers on which a file can be played, as well as if and how many times it may be burned to an audio CD.

If it prevents piracy, why get rid DRM?

In short, for consumers. Many believe that DRM is hindering consumers’ adoption of digital music. When purchasing files with DRM, a user may bump up against restrictions that would not occur had he purchased a physical copy and created his own digital file. For example, a purchased file containing DRM may not play on all audio players a purchaser owns, while an audio file pulled from a physical CD would have no restrictions. DRMed online purchases and physical purchases are not providing the same value despite similar costs.

As well, there is great doubt as to the efficacy of DRM in preventing piracy. All audio available online can still be purchased on physical CDs, which can then be turned into a digital file free of DRM². As such, pirating music is still quite simple, meaning the DRM prevents legitimate use of the audio by the purchaser while not slowing piracy.

What will this cost?

The price for these DRM-free singles will be $1.29, compared to $0.99 for the DRMed versions alongside which they’ll be sold. The price for albums will remain the same, regardless of the format.

30 cents more per song, just to remove DRM?

Don’t downplay the removal of DRM. While this is just a start, DRM-free files will play anywhere, anytime, with no restrictions, something never before possible with iTunes purchases. You’ll be able to edit these files, turn them into ringtones, and anything else you like. This sort of freedom has great value.

As well, the DRM-free files will also be 256 kbps AAC files, which is twice the quality of current iTunes Store audio files. Apple states that this is “audio quality indistinguishable from the original recording”, and all but the most intense audiophiles will agree.

What about all the music I already purchased?

You will be able to upgrade any songs purchased in DRMed 128 kbps AAC to the DRM-free 256 kbps AAC files for the difference in cost, $0.30 per song.

Can I upgrade albums for free?

At this time, this isn’t known. It would make sense that you could, as the album prices are identical, but the $0.30 per song upgrade fee may apply.

When does this start?

This change will occur some time in May.

What happens next?

At least three things are likely to occur:

1) The other major labels (Sony BMG, Universal and Warner) may sign on for the same deal before it goes live. Failing that, they’re certain to watch public reaction as well as sales of DRM-free vs. DRM audio to determine their next move. If successful in drawing more consumers and sales, this move may start a domino effect and lead to the abolition of DRM across all audio files.

2) By providing higher quality files with no restrictions, thereby improving the online music-buying experience, this change should lead to an increase in online sales of audio through the iTunes Store, widening Apple’s lead in the digital marketplace. Other audio stores will likely be forced to try and get DRM-free audio as well.

3) More hardware audio players will begin to support the AAC audio format. The iPod and the Zune already do, but looking at the top 15 on the audio device bestsellers list on Amazon, the Sansa e260 (#3), Sansa M230 (#8), Creative Zen Vision: M (#13), and Sansa M250 (#14) all do not support AAC. Of the other 11 in the top 15, 8 are iPods, 1 is a Zune (the 30 GB model at #10), and two are unrelated to audio playback.

Until these players support AAC, they’ll be unable to play the DRM-free files from the iTunes Store. Adding AAC support is a relatively trivial fix, particularly in future devices.

What does this mean for Rogue Amoeba?

We’ll have to see exactly how this all shakes out, but I believe this is a good thing, both as a consumer of audio and a businessman.

Currently, our audio recorder Audio Hijack Pro can be used to strip DRM from audio, by re-recording a clean copy as the source audio played. This is clunky (requiring a fair bit of setup) and slow (it can only be done in real-time), as well as inelegant (quality loss occurs when recording to another compressed format). We didn’t promote Audio Hijack Pro this way and if we lose a few sales as the world gains a better experience with online audio, that’s well worth it.

Meanwhile, our audio editor Fission supports editing AAC files losslessly. This means we’ll be able to edit these DRM-free files, allowing you to use them in mixes and videos, turn them in to ringtones, and much more.

Footnotes
1. Formerly the Big Five, the group is now down to four after Sony and BMG merged. Together, the Big Four held over 80% market share in 2005. EMI is the smallest of the four, but still has almost 10% of the worldwide music market share. (Source) ↩

2. A few clumsy attempts at preventing unprotected audio files from being made from CDs were tried. All failed outright. ↩