Pepsi Did It!

The shoes are now dropping all over the place. We have previously reported that Warner Music Group had dropped DRM on its downloads, joining Amazon.com's Download store. Ten days ago, we also reported that Sony BMG had announced it was dropping DRM, although it declined to release any distribution details at the time.

Industry analysts speculated that the companies had been pressured by mega-mart retailer Wal-Mart and Pepsi to drop DRM—in Pepsi's case because it was going to give away 1 billion downloads in a promotion tied to the SuperBowl on February 4. The last time Pepsi tried a download promotion—2004—it gave away only 5 million songs, far short of its projected 100 million. Billboard reported that Pepsi felt Apple's DRM-protected iTunes downloads were the, excuse us, bottleneck.

On January 10, Sony BMG and Amazon.com announced that Sony would be using Amazon to distribute its download files. This morning (January 14), Pepsi and Amazon announced that Amazon will indeed be the conduit for Pepsi's SuperBowl giveaway.

The promotion will begin February 1, when five billion "specially marked" Pepsi products will be released. Drinkers of the fizzy-water can "bank" their points on PepsiStuff.com and redeem them at Amazon.com.

Inevitably, the success—or lack thereof—of the give-away will be seen as a referendum on DRM. If Pepsi doesn't give away most of its 1 billion songs, that may be taken as a sign that consumers don't care about DRM. That outcome scares us, frankly—especially since we haven't seen whether or not the promotional literature stresses that non-DRM files can be transferred to any platform and even recorded for use in mobile CD players (or any other player).

It would be a shame if this "referendum" on DRM failed because people didn't understand that it was taking place.

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