iTunes Debuts Unprotected Songs Online

Apple ipod and itunes generic
AP / CBS
Apple Inc.'s iTunes Store started selling thousands of songs without copy protection Wednesday, marking the trendsetting company's latest coup and a model for what analysts say will likely become a pattern for online music sales.

Launching initially with songs from music company EMI Group PLC, iTunes Plus features tracks that are free of digital rights management, or DRM, technology — copy-protection software that limits where songs or movies can be played and distributed.

The unrestricted content means some songs purchased from iTunes will work for the first time directly on portable players other than Apple's iPod, including Microsoft Corp.'s Zune.

The inaugural batch of iTunes Plus songs includes music from Coldplay, The Rolling Stones, Norah Jones, Frank Sinatra, Pink Floyd and more than a dozen of Paul McCartney's classic albums.

The DRM-free tracks feature a higher sound quality and cost $1.29 apiece — 30 cents more than the usual 99-cent price of other, copy-protected songs at the market-leading online music store.

If available, users can upgrade existing purchases to DRM-free versions for 30 cents a song or $3 for most albums, Apple said.

London-based EMI, the world's third-largest music company by sales, and Cupertino-based Apple announced their partnership in April to deliver the industry's first major offering of DRM-free songs, sharing a vision of what both companies say their consumers want: flexibility and CD-audio quality.

Other smaller online music vendors, such as eMusic.com, already offer songs without DRM, but the selections have been limited to mostly content from independent labels.

Barney Wragg, the global head of digital music at EMI, said the iTunes Plus launch capped six months of work to convert most all of the company's digital catalog into a DRM-free format.

"Our customers told us two things deterred them from buying digital," Wragg said. "They weren't 100 percent confident that the songs they'd purchase could play on their devices, and they wanted something closer to CD quality."

Earlier this year, Apple CEO Steve Jobs called on the world's four major record companies to start selling songs online without copy-protection software.

"We definitely think it's the right thing to do," Eddy Cue, Apple's vice president of iTunes, said Wednesday. "In this case, EMI's a leader and we think others will follow."

In a statement Wednesday, Jobs reiterated that Apple expects that more than half of the 5 million songs on iTunes will feature a DRM-free version by the end of the year.

In the meantime, Apple's iTunes Store will continue to offer songs in the same copy-protected format as today at 99 cents per download and encoded at 128 kilobits per second. The iTunes Plus versions are encoded at 256 kbps, which Apple says makes the audio quality on par with original recordings.

Apple also will continue to encode its songs — including EMI's DRM-free content — in the AAC audio format, which could force some users to go through an extra step of converting tunes into a version that would be compatible with their players.

Some gadgets don't support AAC, including SanDisk's newest Sansa Connect or Samsung Electronics Co.'s YP-K3, but industry analyst Susan Kevorkian of the IDC market research company expects support for AAC will widen following Apple's move this week.

Amazon.com Inc., by comparison, said it plans to sell songs online later this year in the DRM-free MP3 format — the popular unrestricted audio standard that is supported by virtually every device, including Apple's best-selling iPod.

The next generation of digital music will be untethered from usage restrictions, Kevorkian predicts. It's something major music labels — other than just EMI — will have to do if they want to combat the industry's years long decline of music CD sales, she said.

"They absolutely have to reach the Internet to drive music sales, and part of that is to remove the hurdle that comes with the lack of interoperability," Kevorkian said.

Other major music labels — Sony BMG Music Entertainment, Universal Music Group and Warner Music — have all experimented with limited amounts of unprotected content online but have yet to make as aggressive a move as EMI.

Representatives of Warner and Sony BMG declined to comment Wednesday about the iTunes Plus offering or their own plans around DRM technology. Universal did not return a call for comment.

Michael Gartenberg, an analyst at JupiterResearch, said any worries the music companies have over increased piracy from DRM-free downloads are overblown.

"CDs are all sold without copy protection already, so these (unrestricted) digital files are not going to change the piracy story," he said. "People who aren't going to pay for things aren't going to pay for things, and DRM just adds an unnecessary layer of complexity here for people who do embrace this medium and have already bought billions of songs on iTunes."

Shares of Apple closed at $118.77, up $4.42, or nearly 4 percent, and gained another 65 cents in extended trading.

In a separate announcement after the stock market closed, Apple said it will soon introduce direct access to YouTube videos from its Apple TV set-top-box device. It also announced a beefier, 160-gigabyte Apple TV model that will be available starting Thursday for $399.