The combined effect of an upcoming Pepsi promotion, an ultimatum by Wal-Mart, and declining CD sales could be the tipping point that pushes the Warner Music Group and Sony BMG to release their music in MP3 format without digital rights management restrictions, Reuters reports.
The news agency says Amazon, which opened an MP3 download service called Amazon MP3 in September, together with Pepsi plans to kick off a year-long music download promotion on February 3 during the Superbowl. Furthermore, Wal-Mart has reportedly issued an ultimatum to Warner and Sony BMG, warning that it will pull the two firms' Windows Media Audio tracks from its online store if they fail to provide DRM-free MP3 alternatives between mid-December and mid-January. Last, but not least, Reuters says sales of music CDs are down 18.6% compared to 2006.
As a result, Warner and Sony BMG are said to be "considering" releasing songs in MP3 format. British record label EMI and its French-owned competitor, the Universal Music Group, have both released music in MP3 format already—EMI in June followed by Universal in August. Together, EMI, Sony BMG, Universal, and Warner make up the world's "big four" record labels with about four fifths of the market.
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