Now I’ve had a little while to digest the detail of the Apple / EMI announcement, a couple of additional points come to mind. Firstly the fact that the high quality albums retail for the same price as DRM-ed albums is a really important tactic to offset the bias of digital music purchasing towards individual tracks.
Secondly, and more controversially, this doesn’t actually do a huge amount to address interoperability with regards to Apple. The DRM free tracks on iTunes are in AAC format, which isn’t supported by the majority of digital music players. Jobs has played a very smart game: AAC is not a closed format, other manufacturers could license it if they so choose, and they are begining to. But currenly they predominately don’t and most of the installed base of players doesn’t support it (many music mobile phones, Sony and Archos excepted). So Apple have dropped the proprietary DRM but still have the customer lock-in due to AAC. Which of course also applies to all those hours spent ripping CD collections into AAC.
EMI were pushing the MP3 format in their part of the presentation and when they get more partners on board this will enable them to sell directly into the iPod customer base. Given that iPod dominates the MP3 player market, not being able to sell to them essentially limits other services’ aspirations to being also-rans. Now they can raise their game too. The digital music market is going to start getting very exciting. It’s not about to make people rush out and become digital music buyers, but it does lay important foundations for making digital music a viable consumer proposition in the longer term.
Music Industry Blog 