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Universal Music launches rarities store


Territories covered

Western Europe
UK,
Published: 30-Jul-08
Universal Music (UMG), the world's largest record label is furthering its experiments with DRM free music in the UK with the launch of Lost Tunes. The service provides rarities and tracks that are unavailable elsewhere online as 320 Kbit/s MP3s. Single tracks cost £0.99, while album prices vary.

The service is intentionally niche: at launch the catalogue includes 134 exclusive albums (from a catalogue of ~600) including The Walker Brothers' 'Live In Japan', three albums by Comsat Angels and Bill Fay's eponymous album. The service is powered by London based 7digital and is initially only available in the UK; although international versions are expected, no firm dates are available. Lost Tunes follows UMG's first experiment with DRM free music 'Classics and Jazz' which launched in the UK in January 2007, and the company's recently announced joint venture with UK pay TV operator BSkyB.

Our take...
Developing a service that serves niche audiences does make a certain amount of prima facie sense, particularly when that niche is the often slightly older, completist music fan; a niche that has served eMusic well as it is one of the few groups still buying significant quantities of music. Also in its favour is the fact that the store provides DRM free MP3s which work on almost any music phone or personal media player. This should help sales as it maximises the addressable market in the hardware-driven digital music space.

However, perhaps more than both eMusic and Classics and Jazz, Universal's new service risks failing to attract a customer base. Where eMusic and the previous UMG store have something of a 'head' – a catalogue containing the 'hits' of their respective niches – to draw in users, by design, Lost Tunes is more resolutely in the tail. This does not bode well for the service as without hits, tail-centric online stores, such as World Cinema Online, have a history of failing.

More generally Lost Tunes signals another move away from DRM for UMG in the UK; but, as with previous announcements, the label remains rather cautious in its approach in the region. Unlike the US where UMG music is available from outlets like Amazon without DRM, in the UK the Major has yet to license its catalogue to a major outlet DRM free. When it does, it seems probable that the label will continue its US strategy of licensing it to every store apart from Apple's iTunes, relying on the lack of DRM from other stores to help boost their sales and reduce the iPod manufacturer's market share.

Screen Digest believes that the simple fact of removing DRM is unlikely to significantly increase sales, as the majority of consumers remain untroubled or unaware of DRM. But removing DRM does facilitate buying from a wider range of outlets, presenting customers with a larger range of retail opportunities that they can use (which they couldn't when DRM was widespread), and this should help to improve sales. In theory at least, UMG, and the other majors, should be able to enjoy the increase in sales that comes from wider distribution even if they don't license their content without DRM to Apple. But given the Cupertino-based company's track record of selling music and share of the digital music market, how long this strategy can go on for is questionable.

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