EMI, Apple To Sell DRM-Free Music for $1.29/song

The "test case" of DRM-free stuff that I'm most familiar with is Baen Books, who are selling DRM-free e-book versions of (almost) all their titles and -- according to themselves and their authors who are also have books published by other publishers -- "[earn] more income as a publisher and [pay their] authors more in the way of royalty payments from [their e-book line] than any other outlet for electronic books." Based on this, it seems likely to me that the EMI/iTunes experiment is going to deliver on its promise of making more money for EMI.

http://preview.baens-universe.com/articles/auged http://preview.baens-universe.com/articles/salvos6

Of course, it's a different medium, and Baen has also managed to create a community of users who like the company, not just its products. I don't see EMI replicating that, DRM-free music or no, which limits the applicability of the example. (The Baen people love telling the story of their users saying, "you should charge more for this." They created a premium version where you pay more to read an advance copy of the book before the official release date, and they're making money from that, too.)

A good source on the economic harm of intellectual property law is the Against Monopoly blog http://www.againstmonopoly.org. Today's lead article mentions the EMI/Apple deal. Economist David K. Levine writes, "It will be interesting to see how many people buy the DRM version and remove it themselves."

Many people in business literature mocked and called "bluff" on Steve Jobs' http://www.apple.com/hotnews/thoughtsonmusic/.

I think a lot of people who believe in the iTunes-iPod lock-in strategy don't understand that the vast majority of music on iPods is not from iTunes. Any iTunes-iPod lock-in that Apple has is through the seamless experience of syncing one's music onto his or her iPod through iTunes.

The move towards non-DRM music will help Apple avoid anti-trust issues in Scandinavia and make buying digital music a better experience for users. User affinity is the #1 lock-in strategy and no one knows this better than Apple.