DRM-free music boosts online album sales

Galen

http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9046318&intsrc=hm_list

Counterintuitive to music industry thinking, maybe, but the market is speaking

November 11, 2007 (Macworld UK) -- Even if some of the major labels remain shy of them, actual data shows paying music customers will buy non-DRM tracks at four times the rate they purchase music with DRM (Digital Rights Management) attached.
According to U.K. music download store 7 Digital, DRM-free music downloads are outselling other formats provided by the online music store by a factor of four to one. Given the choice, consumers prefer MP3 DRM-free formats, the website explains.
Good news, too, for the albums market, where DRM-free MP3s downloads are encouraging the purchase of digital album bundles, with 70 percent of MP3 downloads by value being albums. Physical album sales in the U.K. declined 20 percent this year.
It all adds up. The company observes that 78 percent of track and album downloads through its service are now in MP3 format, stripped of DRM.
7 Digital also confirmed that data rates and compression count, admitting that consumers "greatly prefer high-quality MP3s encoded at 320kbps" rather than WMA or AAC, the format offered by iTunes.
7digital.com also announced that more than 60 percent of its 3 million-strong music catalogue is now available in DRM-free MP3 format and that it expects that proportion to increase to close to 100 percent by summer next year.
"Consumers are a lot savvier than some people think, and overwhelmingly choose MP3 over any other format when given the choice. MP3 is the only truly interoperable format that works with the iPod, most mobile phones (including the iPhone) and all MP3 players," said Ben Drury, MD of 7digital.com.
"The MP3 format is also good for the music industry as a whole. As physical sales on the high street and online continue to drop, it is vital that labels find a way to increase digital album sales to make up the shortfall. In order for music industry revenues to flourish again, all four majors need to get on board and make music available to the consumer in the format of their choice," concluded Drury, who is also deputy chairman of the Entertainment Retailers Association (ERA).

Reprinted with permission from

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