Angus Kidman13 August 2008, 5:31 PM
Bad news for Apple, great news for price competition in the marketplace: Telstra is now selling DRM-free MP3 music that can work on all music players including iPods.
Telstra has finally decided to start selling music in MP3 format on its BigPond Music site, in a development that's good news for consumers but something of a body blow for Microsoft and its plans for DRM world domination.
BigPond Music is generally reckoned to be the second-largest online music store in Australia, running well behind Apple's iTunes Store. A major limitation for Telstra's audience has been the fact that it only sold music in the restricted Windows Media Audio (WMA) format, which could only play on Windows PCs and a handful of digital music players. In particular, WMA files are useless on the iPod, which is routinely estimated to account for 80% or more of the portable music player market.
Telstra today announced that it has signed agreements with all four major record labels (EMI, Sony, Universal and Warner) to start selling DRM-free MP3 tracks on BigPond Music.
"BigPond is changing the online music game by creating a truly open world that puts consumers in the driving seat," BigPond MD Justin Milne said, though he didn't offer a similarly pithy comment on why Telstra had taken so long to make that decision. Apple itself has offered DRM-free recordings via its iTunes Plus format since mid-2007, and equalised the price of higher-quality MP3s and music in its encoded FairPlay format last October.
A survey of 1,000 Australian music buyers conducted by Telstra found that 70% of people who hadn't purchased music online has resisted because the process was confusing. Just 25% of Australians have purchased music online, the survey claimed, a figure which is actually higher than numbers from industry regulator ARIA, which puts digital music sales at less than 10% of the overall market.
Telstra is also talking up the higher quality of its recordings as a possible differentiator. Most are encoded at 256Kbps, though some are also available at 320Kbps, which Milne claims is the highest fidelity available in an online music store in Australia.
While Telstra hasn't entirely abandoned WMA, it's hard to imagine the format having much of a future in the audio space, unless individual companies insist on a DRM-protected format. With all the majors onboard, that's unlikely to happen. Microsoft will have to hope that Telstra sticks to using WMA on its BigPond Movies service.
Telstra is charging $1.69 per track — the same as the iTunes store — for MP3 downloads. Customers who use BigPond as their ISP get a further discount and don't have downloads counted against the quotas, although given BigPond's high ISP charges that's unlikely to represent much of a real-world saving.
Though iTunes integration is likely to see Apple retain the number one spot in the local market, some realistic competition in the space is welcome. After all, if Apple controlled 100% of the market, there'd be very little incentive for it to reduce prices or offer its own DRM-free alternative.