DRM is Dead!

The final nail in the coffin for DRM (Digital Rights Management) came last Friday when Sony BMG announced it was moving to DRM-free music downloads. Sony BMG was the last of "Big 4" studios to defect and joins Warner Music Group, Universal Music Group and EMI Music in offering unrestricted copyright-free digital music downloads. The news came just days after Warner Music Group announced that they are adding their DRM-free catalog of music to the Amazon MP3 store. This move will allow consumers to play their music on any portable music device without the restrictions of Apple's FairPlay DRM used for iTunes downloads.

Sorry for the pun, but this is a big bite out of Apple and as David Kravets of Wired writes, it will weaken Apple's hold on it's 80% market share of music downloads. To date Apple has sold an estimated 1 billion music downloads from it's iTunes music store. Back in April 2007, Apple announced that the entire EMI Music digital catalog would be available as higher quality DRM-free music downloads for $1.29/ea. I remember getting an email from the iTunes store asking if I wanted to pay the extra 30 cents per download to upgrade my music purchases to higher quality DRM-free. I just deleted the email. 

Now with Sony BMG defection, it's clear that the music studios want their piece of the pie and all four will now participate in Amazon and Pepsi's 1 billion song giveaway scheduled to launch Superbowl Sunday, February 3rd.

Read these stories for more information:

• Sony BMG Plans to Drop DRM by Catherine Holahan, Business Week
• Death of DRM Could Weaken iTunes, Boost iPod by David Kravets, Wired
• DRM Officially Dead: Last Major Label Sony BMG Plans to Finally Drop DRM - Gizmodo
• That was fast: Sony BMG drops DRM, Podfitness users rejoice - Podfitness

Apple and Fox iTunes Movie Rental Deal

While it hasn’t been officially announced, many news sources have been reporting that Twentieth Century Fox Film has signed a deal with Apple that will allow consumers to rent new Fox DVD releases through Apple's iTunes store. It's been speculated and rumored for some time, that Apple would launch a movie rental service, and it’s likely that Steve Jobs is saving the official announcement for his Jan. 14th keynote at the Macworld Expo.


This is big news, as it charts a new distribution model for iTunes and the deal strengthens Apple’s position in video downloading ecosystem. Sure, digital movie downloads have been around for several years but really hasn't had widespread acceptance. In fact, last week Wal-Mart killed its video download service. The Red Herring reported that the Apple-Fox deal could be a trend for Hollywood studios selling directly to consumers and "cutting out the middleman." Stacy Widlitz, of Pali Research, believes the deal will be a long-term negative for Blockbuster and Netfix, who both saw their shares down 5% following the Apple-Fox news.

You can expect that more studios will follow suit in the coming year. Prior to News Corp, Disney was the only other major content partner selling movies through iTunes, (Paramount, Lionsgate and MGM have partial catalog deals with iTunes), but those movies were only for sale and not for rent. New Corp stands benefit from this arrangement having its content available from iTunes and Hulu. Apple will also make it’s FairPlay DRM technology available, something else it hasn't done before, which could make iTunes content playable on Zune and Sansa devices.

Although Apple TV has really caught on, selling only 400,000 units which is 600,000 shy of it’s projection, it's stock continues to rise.