Inside Move: Yahoo! tunes up music challenge

Netco selling tracks san antipiracy software

Yahoo! on Wednesday took a first step toward changing the business model for online music.

Netco is selling an exclusive version of the new Jessica Simpson song “A Public Affair” in which purchasers can download a personalized version with their name.

But while personalization is the selling point, it’s more notable because Yahoo is selling the track as an MP3 without antipiracy software. That means users can swap the song over peer-to-peer networks, or burn an unlimited number of CDs, with no restrictions.

Diskeries aren’t crazy about the potential for piracy. But as a big plus, users can transfer MP3 files onto an iPod. Currently, the only way to put legally downloaded major label songs onto an iPod is if you purchase them through iTunes, since only Apple’s proprietary content-protection software works on an iPod.

Music labels, many of which are unhappy with the mega-success of iTunes, and CEO Steve Jobs’ ability to set prices for online music as a result, are eager to find other ways to sell their music for the market-dominating iPod.

In a post on Yahoo Music’s official blog, director of product management Ian Rogers said the Netco would like major labels to let it sell music with no copy protection.

“Our position is simple,” he wrote in a swipe obviously aimed at Apple. “DRM doesn’t add any value for the artist, label (who are selling DRM-free music every day — the compact disc), or consumer, the only people it adds value to are the technology companies who are interested in locking consumers to a particular technology platform.”

Simpson track costs $1.99 — twice as much as most online singles — though Rogers said that’s mainly because of the personalization. However, if labels relent and let other musicstores such as Yahoo start selling MP3 files that play on an iPod, they may reduce iTunes’ market dominance and gain the leverage to start varying prices.

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