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When Will Major Labels Forego DRM?

Billboard writes of Insound's new download service.  It is notable in that it will only sell full albums in MP3 format.  eMusic has built a good business selling 'iPod-compatible' music (ie in MP3), but allows you to purchase singles as well.  But what really jumped out from the article is the CEO's comment on the readiness of major labels to license their repertoire in non-DRM/MP3 format.  To quote from the article:

And whether he's overly optimistic or prophetic, Wishnow is confident that major labels will be onboard before too long -- he says there are "two major labels" that he's "pretty far along in discussions with."

"Two of the majors have indicated to us that they'd be interested and willing (to do) a deal for MP3s in the near future," Wishnow says. "The other two have not given us that indication. But I think once one company does it, the others will fall quickly. I definitely believe within six months that we will have two majors onboard."

That is quite a prediction and, funnily enough, I don't think it unrealistic.  The major labels have evolved quite a bit in their embrace of all things digital -- witness how 3 of the 4 have done deals with YouTube (EMI has not yet done so).  Indeed someone at one of the majors told me that the topic of licensing non-DRM formats comes up in nearly all of their internal meetings.  Without the weight of legacy revenue streams and operations, it's easy for outsiders to take the majors to task for not having done this sooner.  It is no doubt a tough decision to make.  But there's no need to take the plunge all at once.  Perhaps find a way to test the concept by licensing some back catalogue with consistent sales to eMusic and seeing if and how it moves the needle. 

So time will tell if and when the majors forego DRM requirements in their licensing and while I don't know about Matt Wishnow's prediction, I do know one thing:  if the majors continue to insist on DRM, the clamor for the opposite is only going to grow louder.

 
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Bloggers
Ray Beckerman, Ray Beckerman, P.C.
Steve Gordon, Steve Gordon Law
Rags Gupta, Brightcove
Chris Castle, Christian L. Castle, Attorneys
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