Sources: Apple, music labels talk DRM-free songs

More than a year after iTunes began offering DRM-free music from EMI, Apple is in talks to acquire MP3s from the other top three music labels.

A year after iTunes began offering music without copy protection software from EMI, Apple is in discussions with the other three top recording companies about acquiring DRM-free songs, according to two music industry sources.

The talks are still preliminary and no deals have been finalized, but one source said one of the major labels is close to a final agreement. Rumors have been swirling on the Internet for a week that Sony would soon be offering music without the controversial digital rights management software. My sources could not confirm this.

Spokespeople for Apple and the major labels declined to comment.

Should the deals get done, the songs offered by Apple's iTunes would no longer be restricted to playing on Apple devices, such as the iPhone or iPod. This has been one of the main criticisms of iTunes music for a long time. Apple says the music labels are the ones that force Apple to adopt DRM. Music insiders say Apple has long dragged its feet about getting unprotected music. Right now, Apple uses the proprietary DRM scheme, FairPlay, to lock down its music.

Universal Music is expected to soon announce that it is licensing MP3s to Microsoft for Zune.

Talks with at least two of the labels have taken place on and off for several months, said the sources. They cautioned that there's no guarantee Apple and the labels can close the deals. But if iTunes is successful in acquiring the rights to sell unprotected music from Universal Music Group, Warner Music Group, and Sony BMG, the deal could help bolster iTunes' dominant position in digital music, as well as send competitors scrambling to find something new to differentiate themselves.

In the past year, the four top recording companies have been moving away from DRM--at least with other music services. In that time, companies such as Amazon, MySpace Music , and Napster have all begun selling open MP3s. MP3s are the format used to compress music files. Universal Music is expected to soon announce that the label is licensing MP3s to Microsoft for Zune. EMI and Warner already have DRM-free deals with Microsoft.

The marketing efforts of these Apple rivals have played up the idea that their music is unencumbered with DRM.

Also in the past year, technological shortcomings of copy-protection software have generated a lot of public scrutiny. As some iTunes competitors have exited the market, they have taken their DRM music with them.

This year, MSN, Yahoo, and Wal-Mart outraged some customers and consumer groups by announcing they would stop issuing keys for their DRM-protected songs. This meant the music would be prevented from being transferred to an owner's other devices.

Eventually, all three music services reversed their decisions, but it convinced DRM critics that DRM software never truly surrenders control of music to a buyer. While it's inconceivable to think that Apple would ever stop issuing DRM keys, it's absolutely possible.

CNET News reporter Ina Fried contributed to this report.

See also:
• Wal-Mart to carry iPhone after holidays?

 

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