@ MidemNet: Vivendi ‘Still Strongly Attached To DRM’ And CDs

Ed’s Note: Our paidContent:UK editor Robert Andrews is at the Midem conference in Cannes, covering the big music conference and marketplace. Below are his reports from Midemnet, the digital music conference that is part of Midem.

Universal Music Group doesn’t look like shifting its conservative approach to online distribution. Jean-Bernard Lévy, CEO of the label’s Vivendi (EPA: VIV) parent group, gave only tentative signals to delegates here in Cannes this morning on DRM, non-physical formats and high-quality digital…

DRM: “We are still testing (DRM-free models) – but our policy is still that we are strongly attached to DRM, especially for advertising-based models and subscription-based models.” While EMI added a DRM line-up for its complete repertoire in 2007, Universal began offering only a small selection of tunes to retailers in unlocked formats in August as part of a trial due to end this month. Asked about the program’s success, he deflected: “We don’t want to make too many comments at this stage – we are still watching and, in time, we will make some decisions.” “There is another debate which is as important as DRM,” Lévy said. “Interoperability. We have to hope that there will be more interoperability in the future.”

Physical: Will the CD survive? “Certainly the answer is yes. People for many years will still buy physical products from shelves … in Tesco and in Walmart. there is a very large segment of consumers, a very wide population that will still buy physical products. But we also understand that there is a decline. I believe there will be sales of physical products still for many years.”

Lossless: Asked by U2’s manager Paul McGuinness whether lossless formats like FLAC would become more prevalent, again, Lévy was retiscent, the question drawing only this from the CEO: “It will be interesting to see if consumers want audio quality on downloads as good as it is on CDs. Indeed, it is not the case today.” U2 is with UMG’s Mercury Records imprint.