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Amazon Kills DRM And Puts iTunes On Notice

Digital rights management, otherwise known as DRM, died today, at least as far as music is concerned. Apple CEO Steve Jobs, who deserves credit for calling for the elimination of DRM earlier this year, may come to regret that the competition has taken his advice to heart.

Amazon today launched its long-awaited digital download service, Amazon MP3, offering 256 Kbps unprotected MP3 music files for 89 cents and 99 cents.

That's 30 cents to 40 cents less than the $1.29 price Apple charges for 256 Kbps unprotected AAC-encoded songs from EMI Music's catalog. The other songs Apple sells for 99 cents are protected by Apple's FairPlay DRM and cannot be copied without the time and expense of burning them to a CD then re-importing them as unprotected files.

Amazon also is undercutting iTunes on some album prices, which range from $5.99 to $9.99, with the top 100 sellers going for $8.99 unless marked otherwise. Apple typically sells albums for $9.99 (some are less). DRM-free albums from EMI artists also sell for $9.99.

Amazon MP3 is offering more than 2 million songs from more than 180,000 artists. Apple sells more than 5 million songs through iTunes, but only offers EMI Music songs without DRM.

In short, Amazon is offering a better deal than Apple.

It probably won't be long before Jobs will be compelled to yield to music industry demands for variable pricing in exchange for the right to sell songs without DRM. Failure to do so will doom iTunes to offering an inferior product -- locked music -- for a greater price than the competition. And that's not a situation Apple wants to be in. (It may, however, please the music labels, which have chafed under Apple's thumb for a while now.)

iTunes may retain an advantage in terms of convenience, but that's not a deal-breaker. Amazon has made an MP3 Downloader application available for Mac OS X and Windows (XP and Vista). It automatically adds downloads to the user's local music application.

In several years of iPod ownership, I've bought exactly one song from Apple's iTunes Store and it was a mistake I still regret. I far prefer buying CDs and then importing the songs. I can tell you right now that I'll be buying more music from Amazon in the near future. And while Amazon's digital download selection may still be lacking, I can always get the CD.

If Apple wants to retain its leadership position in the digital music market, it needs to keep ahead of the avalanche it created.

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