The Internet is abuzz with the news that Amazon is going start an online music store later this year that will sell DRM-unencumbered music. This is a big win for freedom and fair-use and marks the next huge step towards the end of DRM. Apple has already indicated that they will start selling DRM-free music from EMI and other labels that are willing to sell their music DRM-free. The music that Apple sells without DRM is, however, going to be sold at a higher bitrate and at a 30% price premium. I assume that this is because they have to differentiate DRM-free music from the DRM-infected music without actually explicitly making it clear to the customers what they losing out on if they buy the DRMed music.

Anyway, today’s announcement from Amazon is big news because it is the second big online music seller that plans to sell music DRM-free. Amazon says that the music will be in MP3 format, no doubt, to find a way to get the iPod owners to switch from the iTunes Store to Amazon. As of now, Amazon will only sell music on the EMI label because that is the only big record label that has been willing to sell the music without DRM. Amazon will have to undercut Apple on pricing, because both stores are going to offer the same music and for an iTunes user, it’s a lot easier buying music off of iTS than have to go to different website.

It remains to be seen if the DRM-free approach is going to pay off. On one hand, users might realise how much they stand to gain by getting actual ownership of something that they paid for instead of being at the mercy of the RIAA. On the other hand, most people do not notice how their hands are tied until something bad happens and they suddenly realise that they can’t play their legally purchased anymore. Apple’s approach of price differentiation might not work: “Hmm, I can buy this song for $0.99 or for $1.39, what should I choose?…” If  the approach fails, the labels will come back and claim that nobody wants to buy DRM-free music anyway, so they have no reason to sell it that way. If Amazon (and possibly Microsoft and other Windows Media Player-based online stores) manage to maintain uniform pricing for DRM-free music, it would level the playing field.

Personally, I think even 99 cents is too expensive for music that has negligible distribution costs and gives you no physical entity that you own. Call me old school, but I’d rather buy a CD for $10 and at least get the best quality for my money and the liner notes and artwork that I can enjoy. If there is some mainstream music that I like and I want to own, I’ll go out and buy a CD. Otherwise, there’s always eMusic for the purpose of experimentation and discovering new indie music.