San Jose, Calif. – For years, the recording industry has fought the popular MP3 music format. Now some think the industry is ready to declare a truce.
Because consumers can potentially make unlimited copies of MP3 songs, the major record labels have seen the format as a threat to their business. But instead of continuing a battle that many think the industry is losing, some analysts think the labels are about to embrace the technology and figure out how to make money off of it.
“The record labels recognize that it’s tremendously important to protect content from unauthorized distribution,” said Eric Garland, chief executive of BigChampagne, a market research firm that focuses on digital media. “The one goal … that trumps that is to sell the legitimate consumer popular music in the form he wants it.”
Some in the music industry have already embraced the popularity of MP3. EMusic, for instance, which focuses on the independent labels that typically handle less-popular artists and albums, offers about 1.5 million songs, all in MP3.
And there are indications that the Big Four record labels are starting to come around. In 2006, Yahoo’s music store ran four promotions offering MP3- encoded songs from major artists, including Jessica Simpson and Norah Jones.
“We see the major labels dipping their toes in the water,” said Ian Rogers, director of product management at Yahoo! Music. “We think it’s going to be a really interesting year … because the labels do want to go where the action is. Clearly a lot of the action is here (with MP3s).”
Two EMI artists were featured in Yahoo’s MP3 tests in 2006. EMI spokesman Adam Grossberg declined to say whether the company would test selling in the MP3 format this year. But he did say the company is looking at a number of different ways of delivering digital music.
“We’re very open-minded about experimenting,” he said.
Just to have the major labels thinking about experimenting with the MP3 format is a big change, argues the manager at one of the digital music distribution companies. Not long ago, MP3 was considered a profanity by many in the industry, he noted.
Until now, the industry has attempted to promote rival music formats that are wrapped in digital rights management, or DRM, software. Such software typically limits the number of copies consumers can make of the files and the number and types of machines they can play the files on.
