EMusic's announcement last week that it would enter the audiobook download market by offering unencrypted files for use on all MP3 players has brought to the fore the question of whether or not digital audiobooks need to come with DRM (digital rights management) protection. The music and movie industries, which have used DRM to try to prevent online piracy of their products, have already begun testing ways to offer unencrypted files for sale, reasoning that easier access to digital files will spur sales. The majority of downloadable audiobook sales come through Audible, which uses DRM.

Audible CFO Bill Mitchell said in a presentation at an investors conference that the company was “anxious to see the products and offerings” from its newest competitor. He said the entry of eMusic, the second largest digital music service after iTunes, showed that other companies see audiobook downloads as a growing business. Mitchell noted that while eMusic has signed deals with some of the major book publishers, others have hesitated, concerned about the potential for piracy by selling unprotected titles.

Among the larger publishers yet to sign with eMusic is HarperCollins. At this point, a spokesperson said, HC is “unsure if removing DRM is the answer to solving the inherent tradeoff between the consumer experience and the protection of copyright.” Concern about the interest of authors is the major reason Simon & Schuster has not signed with eMusic. “We're not yet comfortable that DRM-free audiobooks can accomplish both of our major goals—finding the widest possible audience for our authors and protecting their interests,” said S&S spokesperson Adam Rothberg, adding that S&S “will watch carefully and continue to evaluate the benefits and risks as the business evolves.”

The biggest supporter of eMusic is Random House, which has 500 titles on the site as a way to test the DRM-free waters. The company prepared its authors for such an experiment this summer when Madeline McIntosh, senior v-p and publisher of the Random House Audio Group, sent a letter to agents updating them on the status of the audio market and advising them that the company might start selling downloadable audio without DRM. McIntosh told PW that in discussions with agents since the letter went out, only “one or two” asked that their clients' titles not be included in the test. Authors Guild director Paul Aiken said that while the guild has reservations about selling files without DRM, as long as authors can opt out he didn't think the guild would object to the practice. McIntosh said she believes the eMusic option is a good way to expand the downloadable market beyond Audible. She said she was impressed with the marketing and merchandising eMusic has created to support the site.

To entice consumers to try its service, eMusic is offering a monthly subscription of $9.99 for one audiobook or $19.99 for two; current eMusic subscribers will get a free audiobook as part of an introductory offer. Audible's comparable offerings are $14.95 for one audiobook (or magazine subscription) and $21.95 for two. McIntosh said she believes the prices are too low, particularly the eMusic offer. “We don't have to grow the market by discounting,” she said. McIntosh emphasized Random had no input on the price eMusic charges for its offering, noting that it is selling its titles to the company on the same terms it offers other accounts.