One Major Label Takes On The Dominance Of iTunes

Posted by | Nov. 15, 2007 | 2,361 views

It is heartening to read the recent news that UMG is taking on the dominance of iTunes and attempting to help create a more level playing field in terms of digital retail stores and offering DRM free tracks to music consumers.

Instead of strengthening Steve Jobs and co’s hands, much as EMI did by enabling iTunes to sell DRM free tracks from its catalogue, UMG has decided to use its catalogue as leverage to pry away iTunes dominance. It has achieved this by allowing almost every digital retail store to have access to sell its DRM free tracks for the next six months as a trial.

UMG has reinforced its commitment to levelling the playing field within digital retail space for music by also keeping the price for both DRM and DRM free tracks the same. This pricing difference in comparison to the iTunes model is a key USP of UMGs move and it will be interesting to see which way iTunes moves in reaction to this price competition in the DRM free tracks space.

In any other industry where one player had over 80% market share, whether that be in America or the EU regulators would insist it was in breach of competition regulation and ensure dominance was broken up to allow more competition as more competition is good for the consumer. As such I ask this question of both the American and EU competition regulators; when are you going to insist on iTunes opening up its DRM? As it is this, which protects the dominance of iTunes and creates the monopoly that they currently have within the marketplace.

I would go even further to state that it is the hardware interoperability issues which drive piracy more than simple label DRM (which is generally only used for payment tracking to ensure both label and its artists are paid correctly). UMG has made the first move by leveraging ownership of its music catalogues, so it will be interesting see what direction both WMG and SonyBMG will move in the DRM free track space? One can only hope they too will follow the UMG move on both levels; price and anyone but iTunes model?

Finally do not get me wrong, I use apple products (although not iTunes or an iPod) yet I do think it is time that labels use the true leverage power of ownership of music and state to iTunes that we will only give you the right to sell DRM free tracks if you open up the iTunes DRM so all consumers no mater what digital music player they own can play tracks purchased from the iTunes store. I’m very confident such a move would also be in the long-term interests of both the music industry and consumers as a whole.

Other readers also read:

App Store Piracy Numbers: Implausible or cause for concern?

Apple Moves Toward Music As Service

Sony Online Service: The Next iTunes Killer?

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Posted by on Nov 15 2007. Filed under Business Models, Digital, Gadget & Services, Labels. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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