Download Squad Interview: EMI's Jeanne Meyer

The announcement earlier this week that EMI would be the first major label to release digital downloads free of digital rights management (DRM) was a watershed moment for the digital music industry. It was a long awaited acknowledgement from one of the major international record companies that the strategy of releasing music encumbered by DRM software wasn't quite achieving the desired results. As commentators, industry figures (most notably Apple's Steve Jobs) and consumers had been pointing out for years, DRM software restricts interoperability, makes like difficult for consumers and has completely failed to eliminate music piracy online - the basic reasoning for the introduction of DRM software in the first place.

EMI and Apple announced that commencing in May iTunes would make DRM free tracks available at a high quality bitrate, in the iTunes AAC format, but at a higher price point while DRM enabled tracks will still be available at the lower bitrate and at a lower cost. The announcement will mean that EMI's catalogue of up to 300,000 tracks will become available to consumers over the coming months, and not just from iTunes. EMI plans to strike deals with other digital music stores and will release tracks in DRM free formats other than AAC. EMI emphasised this point later in the week by announcing the release of the new album from The Good The Bad and The Queen in a DRM free MP3 format direct from the band's Web site.

Download Squad spoke to EMI Senior Vice President, Jeanne Meyer about the announcement and what made EMI decide to finally give up on the DRM habit.

Download Squad: What was the clinching factor that made EMI decide that DRM was no longer a business necessity?

Meyer: There wasn't one tipping factor, there was definitely a strategic move we made that was primarily about trying to address two things – one we wanted to enhance the music fans experience with digital music, and we also felt the need to boost the digital music market –– what we announced this week was intended to address those two things. The reason we decided to go with a DRM free version was because of the lack of interoperability between the various stores and devices were becoming too confusing and do frustrating for consumers and what was really clear was that music fans wanted to buy and transfer high quality music in a seamless way.

Download Squad: Were there any other factors that went into this decision?

Meyer: We've been working on doing this for some time, we've experimented with releasing DRM tracks back in the fall when we used mp3 format for that. We learned a lot about consumer preferences and purchasing behaviour – when we offered DRM free in an standard format next to a DRM free but with a higher bitrate and priced a little higher consumers on a ten to one basis went for the premium product.

Download Squad: There has been a lot of commentary of the effect of this announcement on the wider digital download market, particularly with regards to the dominant place of Apple in the market, does EMI have future plans to work with other digital music download retailers, such as eMusic?

Meyer: We're making this available to every retailer in whatever format they want to make it available in – apple has chosen to make this available in the AAC format. But we've just announced today that The Good The Bad And The Queen will be making their latest single available from their Web site in an MP3 format. We imagine there might be some takers who will sell this in Windows Media. Apple is the first of what we plan to be many partners, they're making it available in AAC others will be able to put it whatever format, codec or bit rate they choose.

Download Squad: Will you continue to sell DRM tracks in the future?

Meyer: We will continue selling the downloads that are standard bitrate with DRM on them to our digital partners, we anticipate that some of them will continue to sell them in parallel with the additional tier we're now offering at a premium there are two value added qualities to the premium downloads – the first that it is DRM free, the second is that it is in a higher audio quality than standard downloads. There are a lot of people that understand the value proposition in this equation.

Now we've made this offer to all of our partners, Apple is the first to agree to terms and they have announced how they have chosen to price this, that's their decision and they're selling the premium downloads in parallel with the 99c tracks with DRM on them. It's a new product with an additional price point to the existing product, and you can also buy albums in the premium format, in the higher quality format for the same price as the DRM version.

Download Squad: Are the DRM free tracks going to feature any watermarking?

Meyer: No we're not going to be using watermarks, but I'll point this thing out to you – on a global basis about ten percent of the business is digital, 90 per cent of that is in CD form, most of those CDs come without DRM on them.

Download Squad: How is this decision going to impact on EMI's anti-piracy efforts? Do you plan on monitoring P2P networks to determine the impact on piracy of releasing DRM free music into the legitimate music download market?

Meyer: Obviously we can't totally eradicate piracy, and we said that this week, this doesn't mean that we're turning our back on DRM, with regards to piracy we're going to continue to work hard with our trade groups and the industry – we accept that there are a number of people who are interested in stealing music in whatever form it is in, and we'll continue to be vigilant about policing piracy in all its forms, including on P2P sites.

Piracy is still a problem and it's a battle we're going to continue to fight. We've made it clear that we're selling tracks for personal use just as we've made that clear with CDs, so physical and the digital formats it's neither legal nor morally acceptable to make a bunch of copies for other people, it doesn't change because we're selling the tracks in a DRM free format. The reason we've done this is to make digital music easier for consumers, a better experience for consumers, we think its vital at this point in the market's development.

Download Squad: How much of the catalogue is now available in a DRM free format and what's the international rollout looking like?

Meyer: From Monday we said that we would be making our whole digital repertoire available to all of our partners, Apple said that they would start making the DRM free offering available in May. We're talking to all of our digital partners, that doesn't mean that Apple is not allowed to sell the tracks before May, they're probably just taking that long to prepare them for sale. The number of tracks available will vary depend on the retailer, we tend to have more tracks available on the European sites, because there is more demand for some of the foreign language repertoire, so there is a catalogue of up to 300,000 tracks and that number is growing all the time and everything we release now is available in digital format.

Download Squad: Do you think that consumers are really going to be willing to pay the extra for the DRM free tracks? How important is it to also provide the tracks in at a higher quality bitrate?

Meyer: We are putting this out in an open format and we are removing a barrier to music distribution, but we believe that it is important to remove this barrier and make digital music a seamless experience, the way people think it should be. It will allow any retailer to sell our music to the owner of an iPod for example, not just iTunes, at the same time it will allow iTunes to sell music for people to buy for use on any number of different digital music devices and in fact mobile phones. We think that enabling interoperability and a quality product should have a positive impact on the consumer's willingness to buy and experience a legitimate music purchase. If you play one of your digital music players on a large stereo in a big room you will totally understand the benefit and added value to the higher bit rate, the sound quality is fantastic

Download Squad: This announcement has been widely praised in the press, why has it taken so long for a major to take this decision?

Meyer: It's only really in the last four years people have started to have the legitimate options to buy digital music online, if you look back before those four years when there was very widespread piracy the average person who knew about the subject would laugh and say that nobody will ever buy music when they can steal it. But now cut to four years later, what used to be zero percent of our business is at ten percent and growing fast as a part of overall business. There is a real demand by consumers for a digital music model where people can have a good experience where they can find what they want, they can get it easily, they know its high quality, its virus free and they know that its supported, that's a good experience, we think that if we can keep offering a good experience people will gladly pay for that experience. And we know that there are always going to be people with more time than money and the inclination to steal. We're going to continue to protect our rights and protect our investment but there is are a lot of good people out there and we trust the consumers, you wouldn't believe the number of positive emails that have been sent to this company thanking us for taking this move.

Download Squad: One last questions - there was only one thing missing from the announcement – what's happening with the Beatles catalogue? Would you like to tell us when that will finally be available for Beatles fans online?

Meyer: As Eric said at the press conference - We're working on it and we hope it will be soon.