Warner to offer music via Amazon without DRM

Amazon.com Inc. has added songs from Warner Music Group Corp. to the offerings it sells as MP3 files without digital rights management (DRM) technology, the companies said Friday.

The online retailer launched its music-download service in September and now offers 2.9 million songs without copy-prevention technology, including tracks from Warner, EMI Group PLC, Universal Music Group and 33,000 independent record labels. But it has still not won over Sony BMG Music Entertainment, the only one of the music majors still insisting on the use of DRM.

Warner said it also planned to offer album bundles including exclusive tracks through the Amazon service.

The move is a blow to Apple Inc.'s iTunes Store, which has persuaded only EMI and a handful of independent labels to let it offer their tracks in the DRM-free iTunes Plus format it launched in May. The rest of the songs available through iTunes come with digital limitations on where they can be played or how many times they can be burned to a CD.

Three formats dominate the market for online music sales: MP3 and AAC, both of which are open formats, and WMA, a proprietary format owned by Microsoft Corp.

MP3 files do not include provisions for DRM. Music recorded in that format will play on most digital music players, many mobile phones and in software readily available for all major operating systems, including Windows, Mac OS X and Linux. This opens up a huge potential market to Amazon and to other online music stores such as eMusic Co. that deal in unprotected MP3 files.

AAC is the format Apple chose for its iTunes Store. Most of the 6 million tracks in its catalog come wrapped in a proprietary DRM layer called FairPlay, although EMI and independents such as Sub Pop Ltd., Nettwerk Productions Ltd., the Independent Online Distribution Alliance and The Orchard Enterprises Inc. also allow Apple to offer higher-quality AAC recordings without DRM.

The DRM-encumbered tracks will play on authorized iPods, iPhones, PCs and Macs -- but won't play on digital music players from other vendors. Unprotected AAC files will also play on many mobile phones, PCs running Linux with the appropriate software, and even Microsoft's Zune digital music player.

WMA files without DRM will play on PC or Macs using Windows Media Player and on some phones and digital music players -- although typically not on the same ones that play AAC files. Microsoft has also introduced a range of DRM systems enabling online stores to sell locked WMA files -- but it later abandoned some of them. This left a certain amount of confusion and doubt about whether devices and songs branded "PlaysForSure" will really play for sure.

Industry executives said they expect that initiatives such as iTunes Plus and Amazon MP3, which remove the DRM locks placed on music downloads by an earlier generation of music services, will encourage consumers to buy more music.

Warner said on Friday that it believes giving consumers the assurance that the music they purchase can be played on any device they own will only encourage more sales of music.

It may also persuade music buyers to look at other brands of digital music players such as Microsoft's Zune, ending Apple's dominance of that market.

With the locks off the music, Apple also faces the prospect of a price war with Amazon.com, which offers 1 million of its MP3 tracks for just 89 cents, in comparison with the 99 cents that Apple charges for all its tracks. Before the launch of Amazon MP3, Apple also charged a 30-cent premium for tracks in the iTunes Plus format, which is recorded at a higher quality than the DRM-encumbered versions. Other Amazon tracks sell for 99 cents.

Copyright © 2007 IDG Communications, Inc.

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