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iTunes threatened by DRM-free music

Will DRM-free music & competitors kill iTunes?

The situation gets even dicier with Microsoft's PlaysForSure DRM, which is used by the music subscription services. PlaysForSure is somewhat more open, since, for example, you can buy a PlaysForSure-compliant device from a vendor like SanDisk or Creative Labs that works with virtually all of iTunes' competitors. But, as we'll discuss later, nobody is certain of the future of PlaysForSure.

As a result, dropping DRM likely will make it even more attractive for users to download music because it eliminates some of the hassles. That explains why industry leaders like Apple's Steve Jobs advocate terminating it.

The music subscription flop

Nobody doubts that subscription services had the potential to be a major factor in the digital music game. After all, for about £10 a month, you can download virtually all the music you want from Napster. That's less than the cost of buying two CDs from iTunes or a single CD from a brick-and-mortar record store.

Subscribers can then listen to their downloaded subscription music at their PC and with their media players, which can connect to home and car stereos. But everybody, even subscription proponents, agree that, so far, the services have been a flop. One reason is that subscription services are hard to explain.

"One of the problems with subscription music is that, until you try one, you'll never understand why you should do it," McQuivey said. "But when you try it, it's incredible. But I'm not bullish about the [subscription services] because, even though I find it a satisfying experience, I don't know how they could market it to get people over that first hump."

Subscription services face other problems as well. For one thing, while the services boast more than 2 million downloadable tracks, that still isn't as many tracks as iTunes offers for sale. As a result, subscribers may still need to purchase some music in addition to their monthly subscription fee.

Then, there's the issue of the balky PlaysForSure DRM software, which the subscription services use. Microsoft rolled out PlaysForSure to great fanfare more than two years ago but has not released a significant update since. Among the frequently heard complaints associated with PlaysForSure is that it can get tangled with the software provided by music services, meaning that sometimes legitimately downloaded music can't be played.

That balkiness, and the fact that Microsoft has not indicated when, or if, it will update PlaysForSure, has angered subscription vendors.

"Yes, we feel abandoned by Microsoft," an executive at one of the subscription providers, who asked that his name not be used, said at last January's Consumer Electronics Show. "We're pretty angry about it." That anger was heightened last November when Microsoft released its Zune media player - see our Zune review - and Zune Marketplace, an online store that offers a subscription service in the US. That put Microsoft in direct competition with the subscription services to which it also was selling DRM.


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