Is the Apple/EMI DRM-free world a paradise?

No doubt that it’s big news when one of the last majors standing (EMI) gets in bed with Steve Jobs and friends to provide DRM-free music.  On the surface, this seems to be the breakthrough in onlinie music that Jobs had been asking for but the devil is in the details.

Ideally, DRM-free means that there are no longer limits on copying the songs to a CD or portable player and thus punishing the user for legally purchasing a song (which is the best argument to get rid of DRM).  But, not only are the DRM-free tracks created in higher fidelity but they’re also priced a higher, now costing an extra 30 cents per song (which adds up).  The higher fidelity would probably matter more if most people weren’t still listening through computer speakers and digital player headphones where better sound quality isn’t going to be really appreciated.  Also, as the BBC pointed out, this is also something of an admission that the original quality of the digital files weren’t good and leaves the question open whether this extra money will make it to the labels, much less the artists involved.

Other than the price jump, the EMI deal also means that the free tracks are tied to the encoding system that Apple uses—AAC (another digital sound compression format, like MP3).  That means that, not coincidentally, the player that’s most adept at handling these songs will be… the iPod!  Fancy that…  As an astute Wired article notes, this makes it harder for other digital players to keep up as they’re not as adept at handling AAC files. 

This also means that while EMI got the message about DRM, Jobs didn’t and he couldn’t be happier how this works out.  His Fairplay system isn’t effected so buyers are still tethered to his little iPod devices since he won’t open up that up to be used by other companies.  In other words, he’s said “do as I say and not as I do” and still has enough clout in the music industry to get people to go along with him.

This relates to how Europe has provided headaches for Apple recently—some countries there are up in arms of Apple’s Fairplay system, saying that it ain’t that fair if iTunes consumers are locked into that system for music they buy there.  No doubt that this deal with EMI is one way that Apple hopes to get in better graces with the European Union.

Despite this advance, European regulators are still giving him/them a bad time, seeing as how he’s in collusion with the big labels over pricing, leading to ongoing probes into this practice: specifically, the complaint is that they’re charging different prices for different countries in Europe. 

But getting his way on DRM isn’t going to get Apple/Jobs out of this pricing investigation but it does better position them in the market and reaffirm their place as the most powerful player in the digital music market.  Other labels will be under pressure to follow suit and don’t be too surprised if they go the AAC route also.  Will this mean that Jobs will now chide the labels for their pricing structures and hope that they’ll once again cave in and solve his problems?

—Jason Gross