Sony BMG deal gives Amazon an advantage

Deal makes Amazon only place to buy DRM-free from four major labels.

ByABC News
January 8, 2009, 1:13 AM

NEW YORK -- Later this month, when Amazon begins to sell Sony BMG tunes, it will be the only place consumers can buy songs from all four major music companies as MP3 files free of digital rights management (DRM) restrictions.

That gives Amazon a leg up on iTunes in reaching consumers who want songs that can be copied and will work on virtually any computer or portable player including, but not limited to, Apple's iPods. Amazon already had deals with Universal Music, Warner Music and EMI to offer their songs DRM-free. Only EMI music is available that way on iTunes.

It is Sony BMG's "newest element of our ongoing campaign to bring our music to fans wherever they happen to be," Thomas Hesse, president of global digital business and U.S. sales, said in a statement.

The deal adds up to 200,000 Sony BMG songs to Amazon's nearly 3.3 million inventory. Sony BMG hitmakers include Avril Lavigne, Jennifer Lopez, Bruce Springsteen, Carrie Underwood, Bob Dylan, Kenny Chesney, Daughtry, Britney Spears and Barry Manilow.

Bill Carr, Amazon vice president for digital music, says, "It'll be great for our customers who have already expressed great enthusiasm for our service. This will make it that much better for them."

Amazon says that it sells about half of its songs, including most of the 100 best sellers, for 89 cents each.

But while iTunes charges 99 cents for virtually all tunes, with or without DRM, Amazon lets companies put different prices on different recordings. Most tunes sell for 89 cents to 99 cents. Amazon's flexible pricing has attracted music companies, which have chafed at iTunes' rigidity.

Amazon and Sony BMG declined to discuss pricing for the new songs.

Sony BMG first demonstrated its willingness to sell digital downloads without DRM this week. It announced a plan to sell in stores cards, similar to gift cards, that let buyers download DRM-free albums.