iTunes Plus debuts with EMI content

Apple cast its lot into the world of DRM-free music this week, and the big question is whether or not iTunes users will pay 30 cents extra per track to avoid the restrictions that DRM (digital rights management) places on downloaded music, such as limited CD burning and transfers to MP3 players. The content in iTunes Plus, as the DRM-free section of iTunes is dubbed, comes only from EMI at this point, as the embattled UK label is the only one of the four majors to agree to sell its catalog on iTunes without DRM.

For $1.29 per song--a 30-cent jump from iTunes' 99-cents-per-track standard, users can download DRM-free music in Apple AAC format, at a higher fidelity of 256Kbps. To access iTunes Plus, users must download a software update of iTunes 7.2. The upgrade's release note says the feature includes tracks "from participating music labels," leaving the door open for labels other than EMI. Apple chief Steve Jobs has previously stated that more than half of iTunes' inventory should be available on iTunes Plus by the end of the year.

EMI inks deal to put content on YouTube

In addition to selling its music without DRM on iTunes, UK label giant EMI is also embracing video-sharing site YouTube, inking a deal today with YouTube and its parent company Google to distribute its music videos on the sites. In addition to making available clips from acts like Coldplay and Norah Jones, EMI and YouTube plan to develop a system that provides for consumer-created content that uses EMI music and video. The videos will also be available on Apple TV, the device that lets people watch Internet video on TV screens. The companies did not disclose terms of the deal. EMI said it will use YouTube's content management system to to remove pirated clips from the site.

Zune nears million mark

Does 99 million count as a substantial deficit? Microsoft said this week that sales of its Zune media player are on target to hit the 1 million mark by the end of its fiscal year on June 30. The news comes six weeks after Apple said it had sold its 100 millionth iPod. In an interview with the San Francisco Chronicle, Robbie Bach, the president of Microsoft's entertainment and devices division, said the Zune has a 10 percent market share in the hard disk-based music player category.

"It's a good start," he said. "It's not an overwhelming start. I'm not going to pretend it's some gigantic move." Apple sold 10.55 million iPods during the three months ending March 31, and announced it had sold its 100 millionth in mid-April.

Bach also said that Microsoft doesn't plan to compete directly with the iPhone, instead continuing to work with handset makers to provide software used in different styles of cell phones. "In the phone space, we're very comfortable with the model we've chosen. We work with handset manufacturers and operators to produce that web of offerings, while still producing the same consistency people can get done what they need to get done regardless of which phone they choose," he reportedly said.

Warner to create online video sites

Warner Music Group said this week that it is creating an ad-supported online music video archive in conjunction with UK firm Premium TV. The sites, which also will offer pay-per-download, will allow other Web sites to embed Warner video programming and will allow users to share videos. Down the road, WMG sees subscription-based and mobile platforms for its video channel as well.

WMG's artist roster includes Madonna, REM, the Red Hot Chili Peppers, and Linkin Park, so if fans of those artists can't find the latest music video on YouTube, they can hit up the label's video site. As part of its digital restructuring, which included the laying off of 400 staffers, WMG created a new LA-based division called Den of Thieves. The new unit will work with WMG's record labels to create content for distribution around its artists' releases and special projects.

AllofMP3 faces new allegations

Although major credit card companies have long since stopped processing payments to rogue Russian music download service AllofMP3.com, the company has reportedly been finding less traditional ways of accepting payments from customers. A 25-year-old man was arrested in London last week on suspicion he acted as a proxy for payments made to the site, which charges for downloads but does so at a tiny fraction of the cost at most digital retailers like iTunes.

The International Federation for the Phonographic Institute (IFPI), a global music industry trade group that has called for AllofMP3 to be shut down, claimed that the man was acting as an agent for the site by selling AllofMP3.com vouchers, providing an alternative payment method, on auction sites including eBay and on another Web site. AllofMP3 denied any affiliation with the man, who is set to appear in a London court on August 8.

"[We] never had any activities outside Russia," AllofMP3 said in the statement. "Thus we do not have any offices or employees abroad. Allofmp3 operates in full compliance with Russian legislation and pays the necessary royalties to the rights holders and authors. The members of the IFPI are unable to do anything about the natural crisis the music industry faces in the digital era. Instead they engage in unfair competition practices and political lobbying. They make up 'sensational' news to attract public attention to their activity which becomes less and less valid every day."