Amazon Jumps On Plans To Sell DRM-Free Music Tracks

by: Eric Savitz May 17, 2007 | about stocks: AMZN    

Eric Savitz

From Barron’s:
Introducing Barron’s Daily Stock Alert: Try it FREE for 30 days
Subscribe to Barron’s Online
Visit Barron’s New Market Data Center
Become a Contributor Submit an Article
  • Font Size:
  • Print
Amazon.com (AMZN) Wednesday announced plans to launch a digital music store in which all the tracks will be free of DRM restrictions. The company said it will have music from “more than 12,000 record labels” (12,000 record labels??) but specifically named only EMI (EMIPY.PK), the same label which recently agreed to sell DRM-free music on Apple’s (AAPL) iTunes Music Store.

The announcement was sketchy on some key details: Have any of the other major labels agreed to do this? Will the store simply not carry songs from major labels that don’t agree to sell music DRM-free? (Apple will continue to sell old-fashioned DRM-protected tracks in addition to DRM-free tracks).

What will be the pricing strategy? Exactly when will the store launch?

Anyway, the Street likes the news: Amazon shares Wednesday were up $1.77 at $62.35.

Related Articles

This article has 2 comments:

  •  
    May 18 08:21 AM
    Ask and ye shall be answered. Hypebot has a good , with some rumors not in the press release. From that article and others:

    "Have any of the other major labels agreed to do this?" No, although there have been rumors that at least one more major label will break ranks and offer DRM-free tracks through Amazon.

    "Will the store simply not carry songs from major labels that don’t agree to sell music DRM-free?" Correct. Since this will almost certainly be positioned as an integrated offering with existing CD sales (i.e., downloads will be just another option, like paperback vs. hardcover for books), Amazon doesn't need to offer digital content for all major labels. Amazon already can provide complete catalogs on CD (digital is just a bonus for Amazon customers), so Amazon can just wait until other major labels see the light and offer DRM-free releases.

    "What will be the pricing strategy?" Apparently Amazon will be undercutting the iTunes Store somewhat, but not discounting to the level of eMusic (which depends on a subscription model, not a la carte purchases). Hypebot claims album prices in the range $4.99-$8.99, per-track prices in the range $.89-.99. (eMusic prices are $.25-.33 per track, with albums averaging $2-3.)

    "Exactly when will the store launch?" Hypebot claims June or July.

    Hypebot has been doing a good job of keeping up with Amazon rumors over the past few months. I've also done some in-depth predictions of what Amazon might do in this space; see the Amazon category on my Swindleeeee.com blog.

    P.S. Re the 12,000 labels: There are lots and lots of independent labels. Amazon is a long-tail retailer, and obviously wants to offer a very deep inventory.
    Reply | Link to Comment
  •  
    May 18 08:24 AM
    Oops, broke the links. Here they are again:

    Hypebot article on Amazon announcement

    Amazon-related posts at Swindleeeee!!!!!
    Reply | Link to Comment
More Comments on AMZN »
Top Rated Comment Streams:

Numbers are net rating-

See all Top 100 »
More by Eric Savitz

Investment Resources
Money Management
Research
Seeking Alpha provides these ads as a service to its leading contributors
Articles on related themes
e-Commerce
Music
e-Finance
Internet Advertising