EMI's Eric Nicoli/Apple's Steve Jobs EMI Presentation Live Notes

8:21 EST – Entire music catalog available DRM-free on iTunes.
5 million songs in the catalog.
No manufacturing costs.
Take things to the next level.
Interoperability. Music bought from iTunes won’t play on other players. Interoperable, but it’s a hassle.
Even though users don’t want to play that music on other players, the might.
Audiophiles can still tell the difference.

256kbps AAC – Indistinguishable from source material. $1.29 per song, 1.29 euro, 99 pence. 20 pence more than original versions.
Users won’t have to think about it on a song-by-song basis.
In addition, iTunes customers can upgrade their entire library of EMI songs for just 30 cents a song.
New DRM-free versions of albums for the same price as the DRM-ed versions.
iTunes continue to offer its entire catalog. 120kbps AAC-encoded at 99 cents.
EMI has taken the first bold step in the music industry.
Half of the EMI tracks will be offered DRM-free.
Doing the right thing for the customer.
Going DRM-free – that starts here today.

Jobs still on stage.

Questions –

Q. When are the Beatles tracks going on?
Steve: I want to know that, too.

Q. Just to be clear on the DRM thing, if you buy a current track, will that still have DRM on it?
Steve: Yes.
When we start selling the non-DRM tracks, they’ll be higher audio quality. If you bought a bunch of tracks you can pay the difference and get them upgraded.

Q. Doesn’t having a split system make things more complicated?
Steve: I think what’s going to happen is very simple. People have a choice. They’ll set iTunes one way or the other. I’ll just set iTunes to say “Whenever that’s available, buy that.”

Q. Why not just offer one choice?
Steve: We don’t want to take anything away from people.

Q. Is it only EMI content DRM-free?
Steve: It’s all EMI content plus content from other labels.
iPods have played MP3s forever.

Q. How important is this initiative in the outstanding issues with the Nordic consumer groups?
Steve: We’re not offering anything online that they can’t get on a CD today.

Q. Are you giving the green light to illegal sharing?
Eric: We have to trust consumers. Some will continue to disappoint us.
This doesn’t in any way diminish our effort to fight piracy.
Best possible music experience. To trust them. To educate them.
That way we’ll grow sales rather than diminish them.

Q. Will others follow?
Steve: I can’t speak for others.
What we’re announcing here today is providing the consumer nothing more than what they get on the CDs they buy.

Q. Removal of DRM on videos?
Steve: Video is pretty different than music right now. Video doesn’t distribute 90% of their content DRM free. I wouldn’t hold the two in parallel at all.

Q. Radical step. How did you decide to do it? Will these sales bolster physical sales?
Eric: Clear from our research as digital music has been growing, many consumers find it frustrating that they don’t have interoperability. It’s a very positive step. Yes, we expect sales to grow because of this. We remain optimistic that digital growth will outstrip physical decline. Digital is still an industry in its infancy. The opportunity is massive.

Q. Do you expect a fall in iPod sales?
Steve: People have always been able to put music they’ve gotten from elsewhere on iTunes. This magic link that people have postulated has not really been there.
Do we have the best and easiest to use music store and best and easiest to use music players.

Q. What’s the point of DRM the 99-cent/79 pence tracks? Why not remove it completely?
Steve: For those customers who are very price sensitive, we don’t want to raise prices on anybody. We don’t want to tell them they’ve got to pay more.
Eric: Not everybody wants interoperability or needs it and not everybody cares about sound quality.

Q. Will other stores have the same deal?
Eric: We don’t set the retail price. Retailers can take them or not take them. eMusic can offer just the DRM-free stuff, not the DRM stuff.

Q. Does this make a Warner/EMI merger unlikely? Is this a silver bullet that will turn EMI around?
Eric: They might want to discuss it in the context of the merger process. This is a major step, a commercial step. No silver bullets in a business like ours. We have to do all the right things and we have to do them right.

Q. 80GB will hold 20,000 tunes at 128. How many will it hold at 256?
Steve: It’s proportional [Ummm… 10,000 durrrrr]

Q. The 20 percent increase in price. How do you account for that?
Steve: We’re not increasing the price by 20 percent because you can still buy the same product as you could yesterday. We’re offering a new product. If you think those are worth it, you can buy it.