Microsoft and subscription sites lose big in Amazon's move to DRM-free music

We said that Apple's move to DRM-free music was smart. Well, Amazon today announced that it will join the party. And in the Wall Street Journal article quoting Jeff Bezos, Amazon intends to offer "millions of songs" from "more than 12,000 record labels." Sounds like those labels that thought EMI's Digital Rights Management (DRM)-free music deal with Apple was just an aberration might want to re-think their approach.

Who is are the big losers in this change in the digital music market? We believe that there are a few companies that are seeing their business models flash before their eyes, including:

• Microsoft, whose billions of R&D dollars invested in music digital rights management are about to go down the drain. Who is going to want to pay for a PlaysForSure or Zune music license when the world is moving to the open MP3 standard?


• Subscription music sites like RealNetworks and Yahoo! Music, who can't revoke your music when you don't pay your subscription fees without DRM. No record label is going to sign a subscription deals any more given that 1) they earn less from subscriptions than from music sales, and 2) subscription sites won't be able to guarantee their ongoing revenue stream.

Technorati Tags: Amazon, Apple, Digital Rights Management, DRM, Microsoft, Music, RealNetworks, Subscriptions, Yahoo