Amazon to Sell DRM Free MP3s

December 20, 2006

Rumors are going around, starting at music industry blog HypeBot and discussed at SeekingAlpha today, that Amazon is working on a music store with DRM free MP3 tracks and variable pricing. This is a big story. On both levels such a move by a major player in the industry could put pressure on Apple to change the way it sells music in iTunes.

Consensus appears to be that if such an Amazon store does open, it will likely be filled mostly with music from independent labels and less-than-new releases from major labels. Yahoo! though has been experimenting in recent months with selling singles from relatively high profile artists without DRM.

My off-the-cuff thought is that iTunes would be more likely to include variable pricing per song than they would be to get rid of DRM. Lower priced music would be more competitive with free pirated content (still iTunes’ biggest competition as far as I can tell) but the company’s dominance in the MP3 player market makes their DRM remain highly viable.

One way or the other, it looks like Amazon may be making one of the boldest moves we’ve seen in some time. Many people have also asked what this would mean for eMusic, a service that sells MP3s without DRM for as little as 25 cents.