Apple and EMI take the plunge

E-Brief News reports that the deal has raised concerns about the future of digital rights management (DRM). And it was followed by a European Commission decision to open an anti-trust probe into Apple\'s iTunes and the way it sells music online. The timing of the announcement suggests that Apple rushed to be ahead of the news of an investigation it knew was imminent. The move by EMI represents a significant change of course at a time when the music industry is straining to bolster digital sales as the business of selling the two-decade-old compact disc format continues to erode. Like the industry’s other major companies, EMI had long insisted on the sale of its music online with electronic locks to reduce piracy. The New York Times reports that the shift means that consumers who buy music by EMI may have an easier time navigating the current jumble of incompatible software in the digital music world. Consumers who buy the unprotected music from the iTunes store will be able to play the music on a variety of devices – not just iPods – and be able to burn unlimited play lists of songs. The unprotected music will come at a higher price ($1.29 a song) though Apple said the songs would have better sound quality. Many analysts viewed the deal as a first step in a broader shift toward all music being sold without anti-piracy software. Some expressed hope it could also jumpstart digital sales for the music industry. Since the start of the year, the slide in plastic CD sales has accelerated, down more than 20%, according to Nielsen SoundScan data. In other developments relating to Apple, the company last week unveiled an iTunes online music store offer aimed at enticing people into buying complete albums instead of separate song tracks. City Press reports that Apple touted Complete My Album as a \'groundbreaking\' service that discounts album prices by amounts already paid for separate tracks downloaded from iTunes. The company set the industry standard of selling individual songs in digital format on the Internet for 99c each at iTunes. Complete My Album gives customers 180 days after first purchasing individual songs to buy the rest of the albums at reduced prices. Full report in The New York Times Full City Press report

Of all the parties walking away as winners in the deal between Apple and EMI, Sonos co-founder Tom Cullen is among those who worked the least, but benefited greatly. Business Week notes that Sonos, a five-year-old company that sells a line of wireless devices that play digital music tracks around the home, has always suffered because it couldn\'t play songs purchased from Apple\'s iTunes store. It was a common complaint from owners of Sonos\' ZonePlayer products, who had spent several hundred dollars to unlock the music stored on their computers so it could be played on stereo systems around the house over a wireless network. \'I wouldn\'t say we lost customers because of the lack of compatibility,\' says Cullen. \'But we sure spent a lot of time explaining why the songs wouldn\'t work on support calls. We just blamed Apple.\' But now the problem is fixed – at least partially. Apple\'s plan to offer EMI\'s music via iTunes with no DRM software to restrict the conditions under which songs can be copied will automatically give Sonos the compatibility it has wanted so long with at least some of the music sold on iTunes. Cullen says with luck, more labels will follow EMI\'s lead. Full Business Week report

The European Commission has sent formal charges to major record companies and Apple, alleging they are restricting music sales in Europe, a Commission spokesperson said on Monday. CNET News reports that agreements between Apple and the record companies violate the EU\'s rules that prohibit restrictive business practices, according to the spokesperson. \'Consumers can only buy music from the iTunes online stores in their country of residence and are therefore restricted in their choice of where to buy music, and consequently what music is available and at what price,\' said Jonathan Todd, European Commission spokesperson. Apple said it wanted to offer a pan-European store but was hemmed in by the music companies\' demands. \'Apple has always tried to operate a single pan-European iTunes store accessible by anyone from any member state. But we were advised by the music labels and publishers that there were certain legal limits to the rights they could grant us,\' its statement said. Several consumer officials in the 30-country European Economic Area, including from Norway and France, have raised questions about Apple\'s use of DRM and its incompatibility with other formats. However, competition officials have shied away from raising such concerns. Full CNET News report