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Sony Drops DRM

Sony BMG Music Entertainment has announced that it will now offer its songs without electronic copyright protection or digital rights management (DRM).

Sony BMG, the second largest music company in the world, is the last of the ‘big four’ music companies to drop DRM. EMI, Vivendi and the world’s largest music company, Universal Music Group have already eliminated DRM from its downloadable music.

Online retailer, Amazon.com will be the first to offer customers DRM-free songs in MP3 format from all four major music companies - and around 33,000 independent labels - through its digital music store, Amazon MP3. Launched in September 2007, the Amazon MP3 store now has over 3.1 million songs from over 270,000 artists.

Sony BMG, jointly owned by Sony Corp and German media group Bertelsmann AG, will make music from artists such as Britney Spears and Beyonce available in MP3 - a format that can be played across the widest range of digital music players. DRM was originally introduced to prevent customers from making multiple copies or sharing songs for free.

According to online market research company, eMarketer, the move will ultimately mean more choice for the consumer and growth in the music download market.

In their report, Music DRM’s Final Days, eMarketer highlights the extent to which DRM is one of the main issues preventing consumers from purchasing digital music. DRM prevents the consumer from being able to import music files from one format to another - such as loading music on to the computer or on a CD. Indeed, music download sites that use Windows Media Player DRM protection, unplayable on the Apple iPod, such as Rhapsody, Napster and MSN Music, are currently struggling with low market shares.

Despite this, digital track sales still grew by 45 per cent in 2007 according to Nielsen SoundScan’s "2007 Year-End Music Industry Report" in contrast to actual album sales, which dropped 15 per cent as fans bought fewer CDs.

The move by Amazon.com is seen as a huge step in breaking Apple’s dominance of the US market for single track downloads whose iTunes store currently has a 70 per cent control of the market. According to Paul Verna, senior analyst at eMarketer, Amazon’s strength lies in its expertise and experience in the online retail space and Sony’s decision to drop DRM would level the playing field for the digital music industry.

"In 2008 and beyond, the winners and losers will be decided not by technological restrictions but by how they price and market digital music, and how successfully they build online communities around music," he said.