Wired.com is reporting that Yahoo is negotiating with major music labels to offer unprotected MP3s for sale, or perhaps even for free as part of an advertising-based new online music service. Wired is reporting that Yahoo has met with representatives from Universal Music Group, Sony BMG Music Entertainment, Warner Music Group, and EMI to secure the rights to offer music from the big for labels through a new — as yet unnamed — Yahoo online music portal.
Traditionally, online music sites have offered music in a “protected” MP3 format, which uses Digital Rights Management (or DRM) technology to limit sharing and copying of the music files. Apple’s iTunes, for example, provides most of its downloadable music as protected music files using DRM, as does Rhapsody and many of the other big players in the online music arena.
But increasingly, online music sites are feeling pressure from consumers to drop the DMR, and provide music in a standard MP3 format, which can be copied, burn to CD, or otherwise used as the purchaser sees fit. Amazon.com’s new MP3 store is spearheading the new unprotected MP3 movement. Amazon is providing millions of popular music albums and single tracks, all in standard MP3 format, without DRM or any other type of “protection.”
Although Amazon’s MP3 store is still new, its impact is already being felt throughout the industry, and increasingly, online music purchasers are demanding that the tracks they buy be free of any Digital Rights Management, so they can copy the music to a CD or another computer if they like. Yahoo, like iTunes, obviously would like to compete with Amazon.com’s new unprotected MP3 policy. Yahoo spokeswoman Carrie Davis says the company now wants to “offer music without any Digital Rights Management protection,” and has initiated ongoing negotiations with the major music labels work out the details.
For several years now, Yahoo has offered free streaming music and videos on its flagship portal, Yahoo.com, though most of these services required a subscription fee. The company now claims to be phasing out the subscription-based business model, and focusing on an advertisement-supported music service. The company has also recently expanded its music pages online by adding song lyrics.
Although the exact format of the new Yahoo music service has not yet been revealed, it is clear that an advertising-based revenue scheme will play some role in Yahoo Music’s restructuring. And if the company gets their way, unprotected MP3s could be available on the site as soon as late summer. But with Amazon.com’s new music store gaining momentum every week, the real question is, will that be soon enough?
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