IHT: Major Label to Embrace MP3 Soon?

Still fighting a losing battle over file sharing, some major record labels seem ready to scrap digital rights management in order to lure consumers away from P2P. In fact, one could make the switch to MP3 very soon.

Rumors of an imminent embrace of MP3 were overheard by The International Herald Tribune at Midem, an annual global conference for the music industry held this weekend in Cannes, France. Those who talked to the paper say the change is coming as result of still sinking music sales.

While digital music purchases doubled in 2006, it still was not enough to stop the continuing slide in overall music sales, which fell three percent. With sales of tracks through outlets like Napster and iTunes expected to grow slower, and consumers continuing to turn away from CDs, something needs to be done.

Offering unrestricted MP3s has so far been only something that independent labels have done. The bigger labels say DRM helps them to limit piracy, and fairly compensate artists.

However, some think that leveraging the allure of MP3 could help spur interest in digital music and better offset losses from CDs. For example, singles and subscription services could offer MP3s, or they could be given away as promotional items through advertiser support.

Something along those lines has already been done through Yahoo, which began offering MP3 tracks from select EMI and Sony artists in December. Additionally, AOL has offered MP3 tracks since July from a wide variety of artists.

Of any of the labels, EMI has been the most aggressive with offering MP3s, although it is not clear whether that is because the label that may be considering the switch to MP3s.

In any case, some expect all of the label's to eventually embrace the format. RealNetworks CEO Rob Glaser told the IHT that he expected the transition to happen within the next five years, although "it is more likely to be in one to two years."