Why Apple-EMI deal holds scant school impact

For users of Apple Inc.’s iTunes Store, the company’s recent deal with EMI Group could be a real boon, because it will allow iTunes customers to download and listen to songs from EMI recording artists on devices other than Apple’s iPod. But for students and other users of the legal music-download services that have been cropping up on college campuses in recent years, the deal holds less promise, industry experts say–and it’s unlikely to spur more widespread use of these types of campus-based services in the future.

Breaking from the rest of the recording industry, London-based EMI–the world’s fourth-largest music label–on April 2 said it would begin selling songs online through iTunes that are free of copy-protection technology. The decision could pressure other major recording companies to follow suit.

iTunes customers soon will be able to buy unprotected songs by the Rolling Stones, Norah Jones, Coldplay, and other top-selling artists for $1.29, or 30 cents more than the copy-protected version. The premium tunes also will be offered in a higher quality than the 99-cent tracks.

The deal, however, doesn’t include music from the label’s biggest act, The Beatles. EMI Chief Executive Eric Nicoli said The Beatles’ music catalog is excluded from the deal, but he added that the company was "working on it." He declined to set a time frame for negotiations over the catalog.

EMI’s announcement followed calls by Apple Chief Executive Steve Jobs earlier this year for the world’s four major record companies to start selling songs online without copy-protection software.

The technology, known as digital rights management, or DRM, is designed to combat piracy by preventing unauthorized copying or sharing, but it also can be a consumer headache. Some music players, for instance, support one type of DRM software but not others.

The DRM technology used by Apple does not work with competing services or devices, meaning consumers could download songs from iTunes only to play on their computers or iPod music players. The lock between the download services and players has drawn criticism from European industry regulators, who argued that it limits buyer choice.

"Doing the right thing for the customer going forward is to tear down the walls that impede interoperability," Jobs told a London news conference.

Jobs previously had argued there was little benefit to record companies selling more than 90 percent of their music on compact discs without DRM technology, then selling the remaining percentage online with DRM.

Some analysts suggest that lifting the software restrictions could boost sales of online music, which currently account for around 10 percent of global music sales.

Though EMI’s announcement is significant for users of Apple’s iTunes, Tim Hurley, a spokesman for Ruckus Network, which provides legal music-downloading services to colleges and universities, said the agreement is not likely to have a major impact on how students and teachers use other online music stores.

Whereas owners of MP3 players manufactured by Samsung, Dell, and other companies now will have the capability to download songs by a select crop of artists from Apple’s iTunes library, he explained, the announcement will not enable users of the popular iPod to start downloading music, movies, and other digital media from competing services such as Ruckus or Napster.

These companies, and others, have heavily courted the education market and have entered into agreements with schools to offer their services to students free of charge or at steeply discounted prices. Apple has no such agreements in place with schools regarding students’ use of iTunes.

Because Ruckus and other iTunes competitors employ a different standard than Apple’s pay-per-track service, Hurley said, Apple’s army of iPod users still will have to use the iTunes software to download music to their portable devices. The inability for students to play tracks on their iPods is a key reason many colleges and universities report an underutilization of legal download services such as Ruckus and Napster on their campuses (see Students spurn free music-download services, http://www.eschoolnews.com/news/showstory.cfm?ArticleID=6615).

Jobs said he planned to offer around half of all music in the iTunes store under the premium, DRM-free package by the end of the year, but he declined to say whether Apple was in discussions with other leading record companies.

"Consumers tell us overwhelmingly that they would be prepared to pay a higher price for digital music that they could use on any player," Nicoli said. "It is the key to unlocking and energizing the digital music business."

The iTunes music store will begin offering EMI’s entire catalog–apart from The Beatles–without DRM software starting in May, he said.

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