Sympathy for the Music Industry: To Be DRM Free . . .

15 08 2007

by mr. travis

universal

In the ever-struggling battle between the major record labels and the future of the recording industry, a new level of stupidity has emerged as the largest of these labels, the Universal Music Group (who encompass other labels such as Interscope, Geffen, etc. etc.) has taken their fight to Apple’s ITunes, specifically regarding distribution rights as well as the DRM (digital rights management) technology that is encoded with every song purchased through the company. Steve Jobs, the CEO for Apple as well as one of the leaders in the new digital music world has in recent months gone on the offensive in the ongoing controversy regarding DRM technology, going as far as to state publicly that he wanted it eliminated from the legal downloading sector. While the financial implications of such a move would highly benefit Apple, it would be mutually beneficial for the labels, especially Universal with their ever expanding catalog to go such a route. Unfortunately, Universal has put up a posturing front; from threatening to pull their catalog from ITunes to “testing” their DRM-free music downloads through lower-tier services such as Rhapsody or Wal-Mart. With the volatile state of the music industry in constant flux, a move like this by the largest major distributor could have disastrous implications resulting from such a stupid and risky move.

The DRM technology, which is at the centerpiece of the argument between Universal and Apple was designed with the purpose to protect illegal copying. When purchasing a song from a site such as ITunes, the DRM encoding is included in your .99 cents acquisition, preventing you from using the song on any other computer, or on any other mp3 player besides an Apple Ipod. Such technology had been used on CD’s as well in the earlier portion of the decade to disastrous results, as it never really prevented the user from copying the CD, instead opening up security holes in their PC making it vulnerable to hackers and spyware.

Critics of the DRM technology have brought up its anti-consumer stance. If a person pays for the song, shouldn’t they have the right to move it anyplace they want? That does not mean they have the right to distribute it on any of the numerous torrents or downloading services, but if they so wish to, they should be able to move a song purchased from ITunes to a Microsoft Zume, or vice versa, or even have the ability to move the song from one computer to another. It’s with this knowledge that has made Steve Jobs an advocate for DRM free movement. Yeah, he hides his profit goals behind a wall of consumer advocacy, but, the fact of the matter is that Jobs is now an important part of the music industry (his ITunes has generated sales in the realm of 4 billion songs sold), if not the most important part of the industry’s future, and his idea of a DRM free industry made people turn their heads. Following Jobs’ announcement came the creation of Itunes Plus which, for $1.30, consumers can buy songs that are without the DRM encoding.

steve jobs

In a time of supposed low profits (which is hard to believe considering ItTunes alone generated 4 billion song sales. . . at basically a dollar a pop. Do the math.) and declining street sales, for the music industry not to go with Jobs on this excursion is foolish. It becomes even more foolhardy when Universal, the biggest of the majors, wants to play hardball with Apple, considering they’ve been hit hard with payola scandals as well as a declining fan base in the teen pop crap they churn out (these are the cats who released Lindsay Lohan’s musical abomination). Going with a DRM free downloading service would increase profits in the long haul for everyone, but to do so on a lesser service than ITunes, which is what Universal is doing, is almost a self-fulfilling failure. It’s as if Universal doesn’t want this test to succeed, for while Rhapsody or Wal-Mart are okay services, their customer rate is far below ITunes standards, so even if it were a success in those markets, it would pale in comparison to anything ITunes could do, thus giving Universal the excuse of saying “hey, it’s not financially viable.” When the giant in the industry does such a thing, it could lead other labels to follow suit despite the stupidity behind such a claim.

Of course, this could just be a negotiation ploy as Universal is currently trying to change their contract rules with ITunes. But, even then, they need to learn that the old ways are no longer in vogue, and by biting the hand that feeds them, they’re only hurting themselves. Things are changing within the industry and the future lies within people like Jobs who understand how to make money while keeping the consumer happy, something the labels have failed to do for the past few years.

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