Update

Apple and EMI announced today that the music label will begin selling all of its music through the iTunes Store, DRM-free. During a press conference in London this morning, EMI said that all of its unprotected tracks will be available worldwide from the iTunes Store starting in May for $1.29 and that customers will be able to upgrade their already-purchased EMI tracks for 30¢ if they so choose.

EMI and Apple said that the bit rate of EMI's tracks will be bumped up as well. EMI's catalog will now be available as 256kbps AAC files, upgraded from 128kbps. "We believe that offering consumers the opportunity to buy higher quality tracks and listen to them on the device or platform of their choice will boost sales of digital music," said EMI CEO Eric Nicoli during this morning's press conference. Customers who are not interested in the higher-quality, unprotected AAC files will still be able to buy protected tracks at 128kbps for 99¢ apiece.

EMI said that the iTunes Store will be the first to carry its higher-quality, unprotected music. The company will also be selling unprotected music videos through iTunes with no change in price, and plans to continue selling full upgraded albums at the existing wholesale prices.

It appears as if EMI and Apple are using the excuse of upgraded sound quality for the reason behind the individual track price bump, and not the lack of DRM. Whatever the true reason for the price bump, this ultimately breaks the (up until today) very consistent pricing scheme of the iTunes Store, and opens up the doors for other artists to start pricing their tracks differently—DRMed or not. One side effect: other music labels may now feel pressure to join EMI in dropping DRM through iTunes. There is no doubt that the rest of the Big Four will be watching this move very closely.

Original story

EMI will announce on Monday that it will be freeing much of its catalog from the shackles of DRM. The Wall Street Journal, citing "people familiar with the matter," reports (sub. required) that Apple CEO Steve Jobs will be present at the announcement in London and that the music will be sold through the iTunes Store and possibly other online outlets.

The news comes less than two months after Apple published Steve Jobs' famous open letter on the issue of DRM. In his missive, Jobs laid the blame for the DRM mess squarely at the feet of the music industry and said that he would gladly sell unprotected music if only the record labels would agree.

Jobs noted that if DRM requirements were removed, "the music industry might experience an influx of new companies willing to invest in innovative new stores and players." (Jobs also argued that interoperable DRM schemes are inherently less secure than closed systems—a questionable assertion, at best.)

EMI and the other Big Four labels have been beset by falling revenues over the past few years. Digital downloads are growing, but not quickly enough to offset the large declines in CD sales. Suggestions to drop the DRM have been widespread, and the recent formation of a licensing authority—Merlin—which combines a bunch of independent labels into a "virtual fifth major" have increased the pressure for change.

In early February rumblings were heard that EMI was thinking about ditching DRM, but EMI was unable to entice the likes of Apple, Microsoft, and others. As it turned out, EMI wanted a considerable advance payment to offset what it perceived as a "risk": selling DRM-free music online. EMI's position was simple: if they sell music without DRM, then users will find trading it that much easier. What this view ignores is the fact that DRM-free music already flows online, on P2P networks and USENET, among other places. This happens (in part) because CDs are, by and large, free of DRM and easy to rip.

When more details of the announcement become available Monday, we'll update here as necessary.