EMI's DRM deal: Consumer win or parlor trick?

It's been a day since Apple and EMI's landmark announcement regarding DRM-free digital music and various Internet scribes have had the time to digest, review and pontificate. The folks at Engadget were pretty quick to declare that the announcement was not quite what it seemed. "We can't help but feel the whole thing is gestural at best, and subterfuge at worst," they wrote. The basis for their opinion is as follows: Disney and its various music and film subsidiaries are still using DRM on iTunes (despite the fact that Steve "anti-DRM" Jobs sits on their board as the majority shareholder), Apple is using higher quality files to justify what is essentially a premium price for DRM-free music and both companies are still selling DRMed music at the standard 99 cent price point. Based on this evidence, Engadget doubts Apple's commitment to a DRM-free marketplace and suggests that its deal with EMI is either a test or "a distraction, a parlor trick."

Meanwhile, the folks over at Gizmodo decided to follow up with EMI and according to the Corporate VP they nabbed, it seems like this whole thing may have been EMI's idea--not Apple's. Furthermore, it seems that raising the price of individual tracks was also Apple's idea, which is surprising, considering all of the media coverage Apple gets for allegedly fighting the music industry tooth and nail in order to maintain its 99 cent song/$9.99 album pricing model. For what it's worth, that model has now been broken, which opens the floodgates to various forms of tiered pricing in the iTunes Store. The Giz did uncover one bit of good news, though: DRM-free albums will retail for $9.99; it's only individual tracks that will see the price bump.

So what do we make of all of this? Is this just a test? Of course. EMI is doing what the big four have thus far failed to do with digital music: they're taking a risk and listening to what the customer wants. It's a wise bet and the rest of the industry will undoubtedly watch this move very closely. Is Apple trying to claim credit for being the catalyst that changed the industry's mind on the issue of DRM? Sure seems like it. Apple has long championed DRM use but unlike the entertainment industry, the company is smart enough to know when a sea change is coming. DRM doesn't work, customers find it restrictive and it's only a matter of time before content owners evolve--or lose out to online piracy. And is it ridiculous to charge extra for DRM-free music? You bet. But my guess is that an iTunes price hike was coming anyway, this is just a convenient way of making consumers feel like they're getting something extra for their 30 cents.

Let's not get too cynical, however. After all, this is the first leak that has sprung in the dam of DRM and I'm willing to bet it won't be the last. Offering DRM-free tracks is an extremely progressive move for EMI and though Apple may simply be the technology enabler here, this still poses a challenge to their business model. A number of Internet contrarians were quick to point out that AACs won't play on every make and model of digital audio player but guess what? AAC is an open format, it's not controlled by Apple and now that those tracks are DRM-free, you can convert them to .mp3, .ogg or whatever format you like, using iTunes or just about any other brand of free audio software. So yes, this is a good first step for the industry. Let's just hope that one foot follows the other.

For more thoughts on the DRM announcement:
- see this Engadget article
- this Gizmodo article
- and this Ars Technica article