Sony-BMG are free to open their own store selling unlocked MP3's any way they like and they will play on an iPod...

I love the idea of watermarking. If a user knew that their tracks would have a watermark on them so that copied tracks would be traced back to them, they would be less likely to share them. I'd be able to put them on all my devices without concern. Sounds like a great solution.

I suspect the article is directional correct, but not entirely so.

Apple already watermarks iTunes Plus songs, so odds are the Warner details are incorrect. (Unless they want additional watermarking.)

I guess this "leak" is just expectation management that no deal is being announced in January--or any time soon.

This is a major bummer for me since I would love to upgrade my collection to iTunes plus.

I just don't get what the labels are waiting for. DRM helps Apple keep their marketshare and giving Amazon, et al., no DRM has done nothing.

I hope the labels get smart and give their customers what they want--DRM free, high bit quality music. They'll make more money that way.

The are likely requesting a digital watermark in the audio stream itself not just in the tags. Apple isn't doing the former only the later (and always has for all songs purchased from iTunes Store).

So it's looking like we'll see Universal content on there soon with watermarks (no reason for Apple not to do this besides the trouble of implementing the feature), followed by Warner once Apple decides to concede to slightly premium prices in certain cases, and Sony is obviously stalling their negotiations, and we'll have to come back next year, after they've lost more revenue. Now all we need is an awareness drive to drive people to avoid purchasing iTunes non-Plus content, so that these studios are increasingly hurt by their refusal to sell DRM-free, and maybe we'll see Sony on there as well. Apple could also hurry things along by posting a spooky 'DRM-protected' logo with a lock symbol near the regular iTunes (non-'Plus') tracks, to hurt their sales versus Plus tracks, which could be labeled "DRM-Free". 'DRM' should be a curse word.

Watermarking is a bad idea and it will degrade the audio. In several studies, test subjects were able to easily tell the difference between the watermarked sound file and clean one. Lables continue to think that people are generally thieves and will steal their content if given a chance. They don't understand that digital piracy spread because labels never offered legal alternative. When iTunes came, people were happy to pay for a download instead of hunting for a free bootleg. This is painfully obvious to anyone but labels execs.

Also, avoiding DRM content in iTunes is actually counter-productive and a very bad idea. The precise reason why Apple has a strong hand in this negotiation is because people CONTINUED to buy DRM-protected content from iTunes instead of DRM-free content from Amazon. We should force labels to understand that DRM or not, iTunes is their only future right now. That's the only way tey'll let Apple dictate (and hence remove DRM from all).

Therefore, keep buying from iTunes and ONLY from iTunes. Ignore DRM whenever it doesn't hobble your fair use (which happens pretty much never).

Why don't they make these demands of Amazon? I still think they are full of it (greed).

They got those demands from amazon. Amazon allows for variable pricing (Oh, the horror! Every song might not be the same price! How will people cope!). Which is also why they have some music cheaper than 99 cents.

SonyBMG (or Sony Music, as they will be rolling over to shortly) have that concession with Amazon MP3 - the downloads are sold by them through Amazon, meaning they stand to take a larger profit share.

It's odd, because in the UK, 7Digital, Play.com and Amazon MP3 UK are all selling DRM-free MP3 tracks from all of the majors - Amazon's entire catalogue is still in the odd 256kbps VBR MP3, but with the exception of Warner, the other two use 320kbps MP3 (much like EMI did) and it seems the shop itself has just as much influence over price as the label, based on the varying 69p-99p rates for the same song across the sites.

It's a shame that the labels can't collectively agree to do the same thing worldwide in the same way EMI did - then again, EMI is now in the hands of an established successful businessman, and whilst they run the risk of annoying some of his artists, they want to return their company to a profit-making business once again.