Will DRM-Free Downloads Help Amazon Against Apple? You Might Be Surprised

Music fans have long decried Steve Jobs and Apple for the copy protection on songs sold on its iTunes Music Store. Such copy protection, known as Digital Rights Management (DRM), places restrictions on how many computers you can play iTunes-downloaded songs on, and who you can share those songs with. Now Amazon.com’s Jeff Bezos has announced that the online-sales behemoth is launching its own music store this fall, and according to the today’s Los Angeles Times, Amazon views DRM-free music as the “consumer-friendly twist� that “will give Apple’s iTunes a run for its money.�

Thus far Amazon’s roster of participating labels includes dozens of indies but only one of the big four music labels: EMI Group, the only major label that also sells DRM-free songs on iTunes. But according to the LAT, Amazon’s insistence that all its music be sold DRM-free will be the silver bullet that kills DRM entirely:

te>Music industry insiders said privately that Amazon’s clout might eventually force them to give up their effort to use technology to restrict what people do with the digital music they buy.

“The other labels will capitulate,� said Peter Fader, a marketing professor at the University of Pennsylvania’s Wharton School.

So is this good news for consumers? Absolutely. Is it good news for Amazon? Surprisingly, maybe not.

Jobs has already pledged, in a memo posted on Apple’s Website, that “if the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM-free music on our iTunes store.�

So let’s say Amazon’s stance does convince the other three major labels to abandon DRM by September, when analysts suggest the Amazon Music Store will open. Within weeks, surely, the iTunes Music Store will also be selling all its tracks DRM-free, and Amazon will have instantly lost its only competitive advantage over its primary competitor — one that currently controls 70 percent of the legal music-download market. Amazon’s launch may actually benefit Apple by allowing them to get what they always wanted — the right to sell DRM-free tracks at a higher price — without antagonizing the labels with whom they do business.

As of yet, Amazon hasn’t revealed what they’ll charge for songs. Unless the company can price its music substantially lower than Apple, would you switch from the iTunes store — a simple interface you’re already familiar with — to an unfamiliar system that requires you to right-click, save, and add to your iTunes library in separate steps? We wouldn’t, and we don’t even like Apple that much!

It’s possible that Amazon’s excellent foothold in the overall online-purchasing market will translate into a successful music store. But it also seems quite likely that their desire to “drive the trend� of DRM-free music, while a boon to customers, won’t help them overtake Apple in the end. And Bezos may need to come up with some other twist to get you to switch.

Amazon to sell unrestricted songs [LAT]
Thoughts on Music [Apple]