WMG, Amazon pact on MP3 offer

Deal will offer over 2.9 million DRM-free songs

Warner Music Group, the lone DRM-free holdout among the majors, has inked an exclusive deal with Amazon.com to offer MP3 tracks with no copy-protection software attached.

Songs from WMG’s digital audio catalog were made available for purchase Thursday at Amazon.com. Amazon and Warner will also make available digital music products such as album bundles containing exclusive tracks.

Amazon.com launched its digital music service in September. Amazon’s tracks can be played on any digital music device.

Move marks an about-face for the music company, whose chief executive, Edgar Bronfman Jr., has been staunchly against the removal of digital copy protection. Bronfman criticized Apple’s Steve Jobs earlier this year over his contention that the elimination of digital rights management software is the only way to create interoperability.

In a February earnings call, Bronfman said DRM and interoperability are not mutually exclusive. “To suggest that they cannot co-exist is simply incorrect,” he said.

Linking with Amazon.com will certainly have some reading between the lines, as Warner Music joins Universal Music in excluding Apple’s iTunes from the companies’ DRM-free offerings. UMG was the first of the big four to end a long-term contract with Apple, choosing instead to go with a month-to-month agreement. Universal’s Def Jam, for example, kept Jay-Z’s “American Gangster” off the iTunes service.

Sony BMG has taken the most cautious approach, selling DRM-free tunes through its own online service. It has been offering the tunes free of copyright protection software for about two weeks.

The change in thinking at WMG, said Michael Nash, senior VP, digital strategy and business development, stems from consumer desire for flexibility and WMG’s desire to provide that flexibility.

“We believe that giving consumers the assurance that the music they purchase can be played on any device they own will only encourage more sales of music,” he said in a statement.

Warner Music Group’s labels include Atlantic, Bad Boy, Elektra, Nonesuch, Reprise, Rhino, Sire and Warner Bros. Company’s stock price has taken a pounding in 2007, dropping to $6 from a high of $23.93 at the beginning of the year.

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