September 16, 2008
UK digital music provider 7Digital announced today that 100% of its 4 million strong catalogue is DRM free MP3 format. All previously purchased WMA tracks will be upgraded free of charge. This is great news and reflective of the pioneering spirit of 7Digital as they try to eek out market share at the expense of the Big Apple. The bulk of Europe's 300 odd digital music services would do well to take lessons from 7Digital on how to compete. Often what happens when a single company dominates a marketplace it eventually falls foul of complacency and finds itself under multi-directional attack from niche innovators. Apple's dominance of digital music is comparable to that of Google's footprint: it continues to augment its dominance through innovation and weak competitive threat. Most other digital music providers have settled for me-too WMA stores. 7Digital hasn't.
The irony of all this though, is that DRM-free shouldn't even be an issue anymore. 18 months ago I wrote a report showing that the majority of the digital music industry (major labels included) were ready for DRM-free. I even expected (hoped) that Apple would be finally announcing DRM-free last week. Instead of empowering the flagging digital music market by granting Apple DRM-free catalogue the major labels have focused on getting Apple's competitors, such as 7Digital, stocked up with DRM-free first. Though this tactic is aimed at leveling the competitive playing field, the risk is that the effect is to weaken the most driving force of digital music and therefore the digital music market itself.
The symbiotic iTunes / iPod relationship is quite simply the pivotal factor in digital music. Making DRM free available on other stores is not going to suddenly make all those iPod owners switch. Why would they? They can get all the music they want from iTunes and it plays on their devices. In the future of course DRM-free will help balance the market should Apple lose market share. But right now it is a building stone for the future. Keeping DRM-free off iTunes is a futile gesture that hinders rather than drives the current market.
So the 7Digital announcement is a big deal but the irony is that it shouldn't be.