DRM stands for "Digital Rights Management" and it means the funky computer voodoo that prevents you from playing iTunes on on a non-Apple player, or prevents you froom making copies of certain CDs. In short - some mechanism that "manages" the rights of the copyright holder.
BBC NEWS | Technology | US Yahoo offers copy-free music
Is this a stupid move on Yahoo's part? Or smart?
One thing that keeps Apple's cash flowing is that when you buy an iPod it only plays DRM-protected files that are bought from iTunes. Yes, it can play unprotected MP3s as well, but if you bought music from Sony's online store, for example, you couldn't play it on your iPod without finding some way to defeat the DRM.
If Apple wanted you to be able to play those tracks, it could allow your iPod to play them But it doesn't, on purpose, because it's counting on music companies making restricitve DRM deals with other music-selling sites which means an iPod owner is shut out from those sites and must turn back to iTunes.
Now, people will be able to buy tracks from Yahoo and play them on ANY device. Which means the market for those tracks includes iPod owners.
Quote:"Our position is simple: DRM doesn't add any value for the artist, label (who are selling DRM-free music every day - the Compact Disc), or consumer, the only people it adds value to are the technology companies who are interested in locking consumers to a particular technology platform."
Precisely. The music industry realized that Apple really got the upper hand because of DRM. Of course, they didn't care at the time because they only thought DRM would hurt the consumer. Now they realize that their previous deals may not have been smart for the label either.