EMI's New Digital Strategy May Have Prevented A Worse June/July Slide
About a month ago I posted a graph that showed EMI's year-to-date market shares for digital albums and CDs. The cumulative figures showed EMI's digital market share had increased in the month after the company dropped DRM at iTunes.
Context & Ripple Effects
Coolfer's follow-up on its own year-to-date market share graph shows what happened after EMI stripped DRM from its iTunes catalog about a month earlier: cumulative digital album share ticked up even as the label's CD share kept sliding through June and July. On this reading, the DRM-free catalog wasn't a cure for EMI's overall decline — it was a partial offset at exactly the moment physical sales were eroding fastest.
The move matters because EMI was alone among the majors when it did it. Universal had only just begun ramping up its own DRM-free testing days before this post, so EMI's month-one share data is effectively the first public evidence the other labels could use to justify or reject following suit.
First-order effects
- EMI enters the back half of 2007 with a measurable digital-album share gain attributable to its iTunes DRM-free catalog, softening — though not reversing — a weak June/July across both formats.
Second-order effects
- Universal's DRM-free tests now run against a live benchmark rather than a theory: if EMI's digital share keeps outpacing its CD decline, UMG faces pressure to widen its experiment, and Apple gains a template for negotiating DRM-free deals with the remaining majors.
Third-order effects
- If one label's share gain proves repeatable, DRM-free distribution stops being a differentiator and becomes table stakes across the big four, shifting the strategic question from 'whether to drop DRM' to who extracts better wholesale terms from Apple in exchange.
The trend: The major labels are moving from DRM as default protection to DRM as negotiable concession, with EMI's early iTunes results supplying the proof point the rest of the industry was waiting for.