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Music Execs Think DRM Slows the Marketplace
Posted by
kdawson
on Thu Feb 15, 2007 11:22 AM
from the well-duh dept.
from the well-duh dept.
MacGod writes "From BBC News comes a story about a Jupiter Research survey conducted before Steve Jobs's anti-DRM essay, indicating that most music industry execs see DRM-free music as a way to expand sales on digital tracks. The survey covered large and small record labels, rights bodies, digital stores, and technology providers. To summarize: 54% of music execs think that current DRM is too restrictive and 62% think selling unencumbered music would be a way to boost sales. Even limiting the survey to the record labels themselves, 48% believe this. Yet, many also believe it's not going to happen without significant governmental intervention — even though most insiders think DRM is harmful, the labels are keen to stick with it. Is this yet another sign of the typical media industry 'head in the sand, refuse to change' approach, or might we be seeing the early stages or some actual change?"
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News: Jobs Favors DRM-Free Music Distribution 755 comments
Another anonymous reader tips an essay by Steve Jobs on the Apple site about DRM, iTunes, and the iPod. Perhaps it was prompted by the uncomfortable pressure the EU has been putting on Apple to open up the iPod. Jobs places the blame for the existence and continuing reliance on DRM squarely on the music companies. Quoting: "Much of the concern over DRM systems has arisen in European countries. Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free. For Europeans, two and a half of the big four music companies are located right in their backyard. The largest, Universal, is 100% owned by Vivendi, a French company. EMI is a British company, and Sony BMG is 50% owned by Bertelsmann, a German company. Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly."
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Re:COMMENT PROTECTED (Score:5, Funny)
Cancel or allow?
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Re:COMMENT PROTECTED (Score:4, Funny)
Do you actually, really not want to not, not click this button?
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Re:head in sand vs change (Score:5, Interesting)
However, now that I'm older...I got money to spend...plenty of discrecionary money. However, I have never bought a single song online. Have I downloaded any mp3's? Years ago when I first discovered them on USENET, sure I did a few...mostly bootless Zeppelin/Stones stuff I couldn't find anywhere else...but, for the most part I pretty much own all the CD's of music I like. I have a high end stereo, and I like to play the best version of a song that I can.
If they would offer for sale online...lossless songs without DRM so that I could burn hardcopy backups, and my own lossy versions for my car or portable (no big deal with such a poor listening environment)...I'd be all over that. While I like a good deal and free stuff as much as the next person, I don't mind spending money for things I want. I think there are plenty of people out there just like me that they'd make plenty of money off of if they opened things up.
I just don't want to buy music/video that is of lesser quality and hinders me from doing what I've done with it in the past when a copy I bought was mine to use, play and store as I wished.
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Re:head in sand vs change (Score:5, Insightful)
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DRM is not piracy prevention. (Score:5, Insightful)
That is a fallacy. It is something the music companies would like you to think, but it is not really true. DRM is about "maximizing revenue," principally by allowing the record companies to sell the same piece of music over and over, in different formats. Basically, is purpose is to eliminate format-shifting altogether, because that way they can charge independently for a song on CD, as a digital file for an iPod, as a digital file for a cellphone, as a ringtone, etc. etc.
The music companies have realized that digitization basically means the end of formats that wear out over time, and it will also mean that it's pretty trivial to move your music from one type of playback device (e.g. iPod) to $NEXT_YEARS_DEVICE without them seeing a dime. Since their business model historically has derived a lot of revenue from the repurchasing of music in new formats (45s, 8-tracks, LPs, cassette tape, CD), they want to stop this, even though it's allowed by Fair Use as a simple format shift.
DRM is only nominally about piracy; in truth, it's about squeezing more money from honest consumers.
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Alvislujia (Score:4, Insightful)
Re:Alvislujia (Score:5, Insightful)
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Re:Alvislujia (Score:5, Interesting)
I always had a sense that while the RIAA execs had the information about the uselessness of DRM all along, their greed and anger was too great for them to admit it to anyone, especially themselves. But this recent fiasco, along with a very high profile essay by Jobs might have just been enough to jolt them into realizing that the reason that they're losing money, is because they're failing at their primary business model - music distribution.
They got so caught in copyright protection that for awhile it seemed like this was their primary focus. It was almost clear that the RIAA lawsuits were becoming a profitable side-business in the form of outright racketeering and extortion.
But perhaps the decreasing sales of CDs in the context of a flourishing DVD business, and very healthy iTMS sales, they've finally come to their senses.
The goal of RIAA is to distribute music at a price to the consumer. So that's what they should be doing. If the labels got together, and opened an online music shop with non-DRM custom-format/bitrate downloads from 96kbps to uncompressed, a-la-AllOfMP3, they'd make a killing!
So perhaps long-term greed reinforced by reality and logic has finally triumphed over old-school throat-ripping greed...
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Re:Alvislujia (Score:4, Insightful)
I think this analysis is correct.
Back in the 80's, we went these particular rounds with the software industry. Software vendors had resorted to putting creative errors on their media, changing the track pitch, sometimes even using lasers to burn holes into floppy discs (the DRM system would attempt to write the sector that was supposed to have a hole in it, and then read it back, and exit if it succeeded in doing so) in an attempt to prevent illegal redistribution of their software.
Ultimately, most software vendors gave up on this whole idea because the finally realised that they were doing more harm than good. In at least one instance, a game title that ran fine on my next-door neighbour's computer, would not run on mine. Both machines were essentially identical (Commodore 128, 512K expansion RAM, 1751 floppy drive). It turns out that the DRM kicked on this software simply because my floppy driver was ever so slightly out of alignment.
At any rate, the software vendors largely gave up, though they are starting to get back into it again. On the part of the MAFIAA, this is a case of them failing to learn from another industry's mistakes. Now, it looks like they are starting to get it. Hallefuckinlujia!
Incidentally, I am still pissed off over HD-DVD and BluRay players downrezzing when connected to an analogue HDTV. I was an EARLY ADOPTER and helped FUND the RESEARCH that made HDTV possible, motherfuckers!
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Re:Alvislujia (Score:5, Insightful)
No, that's the goal of the RIAA-member record companies.
The RIAA's original goal was to establish and enforce technical interoperability standards that would ensure that an album released by any label would play back accurately on any make of record player. Ironically, the RIAA's current efforts are very much the opposite of that original charter.
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Usurpers (Score:5, Interesting)
Sounds more like preparation for those wretched music execs to put out non-DRM'd music like it was their idea all along; as if their customers haven't been shouting for DRM-free products all this time.
OK I am really confused. (Score:5, Interesting)
So, can somebody please explain:
(1) What is the difference between the music industry execs and the people who run the labels, and
(2) If the music industry execs are saying they do or the don't want DRM?
Thanks.
They should have learned from e-books (Score:5, Insightful)
The obvious and total failure of DRM'ed e-books should have warned them: Take a medium that consumers view as a tangible product, that they can buy and sell in an aftermarket, and try to turn it into a limited, licensed, revocable, non-transferable right-to-use at a not particularly attractive price - and it should succeed?
What are they snorting? Oh. Right. Never mind.
I don't understand. Help. (Score:5, Insightful)
1) DRM is bad
2) It hurts the market
3) Doggone it, let's get rid of it!
But then they say....
4) But we're not going to get rid of it
5) We're hoping the government will force us to get rid of it?
I may not be as bright as some of you guys around here, but this doesn't make any sense.
They really seem to be saying:
1) DRM *THE WAY WE'VE DONE IT* is bad.
2) No way will we get rid of it, we'd rather have bad DRM than none. We need to be able to resell Elvis tracks every 5 years to the same consumer.
3) What we're hoping for is the government mandates a technical solution, since Apple has really screwed us up, and we don't seem to be able to work together to come up with a viable solution on our own.
Seriously, if you're the government, isn't it reasonable to say "Gee, selling music to consumers is not a core function of government. You guys figure it out. We've already given you eternal copyrights and the FBI to enforce it, what else do you need?". But I guess that won't happen.
Re:I don't understand. Help. (Score:4, Insightful)
It's win-win-win... except for the companies that exist only to develop ridiculous DRM schemes... but they were already losers anyway.
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Re:I don't understand. Help. (Score:5, Interesting)
The more I look at it, the more the music labels seem to resemble strung out junkies.
They know that DRM hurts more than it helps.
They know that infringing copying is rampant, and DRM schemes do nothing to stop it. I think they even know that the losses due to copying don't really make that much difference to their situation. Some difference, but not much. In fact, the most swapped music tends to enrich the bands at live gigs and sell more merchandise.
They want to stop, but they just can't. They can't make that first step. One of them (EMI, maybe?) will go cold turkey for a bit. Their tracks will then be all over P2P as they already are and always were, but this will be enough for the pushers (DRM manufacturers) to say "See? Do you want that sort of pain for your back catalogue?", and enough of them will start hurting. Enough to continue the sad cycle.
Eventually, they will phase out CD sales, and replace them with (DRM'ed) downloads only. Fine. I don't care. I won't buy them, and I won't even hack round them. And the bands I do buy from will be those who market themselves well enough, and play good gigs.
An old industry dies. A new one lives. It's a fair trade.
--Ng
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The problem is... (Score:5, Insightful)
The music industry seems to be doing quite well (which is not to say the artists are getting all they really should, but that's another post) since they have money to spend playing around with copyright law. There is no "we need to try DRM-free music before our profits dry up!" imperative which might drive people to take risks and the company to accept risks, so DRM (which is easy to make sound good, whether it is or not) won't go anywhere until the case for it hurting sales AS A CONCEPT (not just a bad implementation) becomes obvious enough to convince anyone.
The only way I can see that happening is an "open source music" phenomena that replaces corporate music trends, star generators, and hits with something just as good (or "effective" if you don't think it's good) but community controlled. That's hard, because opinions are subjective and can apparently be influenced by ads. We need a central site, lots of sources of music people want to listen to (not what they SHOULD want to listen to, mind you, but what they DO want to listen to - no running people down for their (lack of) taste), and quality control that people can trust. When THAT emerges, DRM will become too much of a liability. I don't see anything else that can do it.
As a person who hates DRM (Score:5, Insightful)
A few people revel in ripping things off. The music industry (MI) will lose some money on them.
A lot of people have absolutely no morals and will do what costs them the least. MI will lose some money on them.
A lot of people are as moral as they can afford to be. MI will lose some money on them if people feel swapping non-drm'd titles is okay.
The folks folks who are very moral, it won't really matter unless the basic morality of the action is redefined by the culture (which I see a strong incentive to occur).
It might turn out to be the last big blast of sales income before music sales dry up.
DRM means the end of Microsoft (Score:4, Interesting)
I think *this* -- essentially the end of Microsoft -- is what's at the core of all of this. And the end of Microsoft will be the *result* of DRM-less tracks. Jobs knows this. Everybody knows this. This is the elephant in the room that no one is talking much about.
Vista is all about DRM -- everything about Vista is DRM wrapped in eye-candy. Vista is the DRM operating system.
The end of DRM means the end of Microsoft as the major OS player. It also means a return to the "hobbyist" computers of the 1980s -- the TRS-80s and the Commodore 64s and the Apple IIs. This "hobbyist" market continues to erode as DRM gains a foothold. Drop DRM, and we're back to where we were 25 years ago -- personal computers that were meant to serve users not the corporations.
Just my two cents.
Competition? (Score:5, Interesting)
And even better, everyone here in this discussion basically assumes that the industry is acting as one singular beast. They say things like "Well, when DRM is removed, blah blah blah..." as if all of the companies will, you know, COLLUDE to just end DRM one day and that'll be that.
The sad part is that, of course, all of these posts are right. The industry no longer acts as a bunch of competing units. They are essentially acting as a philosophical (if not legally binding) conglomerate on all of the ideas about music distribution. That's just sickening.
Why can't one company take that risk now? Why not, you know, offer a *COMPETING* business model of DRM-free music at the upper levels? Of course there are a number of independent companies who do just that, but why can't EMI, for example, just dump DRM? It's because they're all in bed together.
I think we should resist at all times the premise that the RIAA is just some mythical octopus, a single unit with many arms. These types of industry-wide assurances and reclamations are damaging to the whole premise of business as it is. The fact that none of them are even attempting to compete on these terms is just proof that we have already let them cement their status as a de facto monopoly. To not even fight them on that front is disheartening.
To music executives: Your industry is in crisis. Take a fucking risk!
Rationale for DRM, from a music exec POV... (Score:5, Insightful)
Most "big hits" these days are CDs filled with garbage. If you look at the number one selling CDs, it's the "Wow! Now that's what I Call Music - Volume 845". Music executives know that people are only going to buy the CDs that are filled with stuff that audiences like, and enjoy.
That said, look at the music that's released on those 'compilation' CDs. The music is all old and past its 'hit single' prime. It's not terribly old, but it's not the stuff that plays commonly on the radio either.
Most artists have 'filler' CDs. That is to say, they have maybe two tracks that are any good, and the rest is total crap. But the music companies can charge you for the full price of the CD, filler and all. You pay for all 12 or 15 songs or whatever, when all you wanted was the two. And now with iTunes, you can pay $2 and get those two tracks alone. The odds of you buying entire albums now goes down significantly because you know that most artists pretty much suck donkey balls, and you just like that one "lalalala cookie monster" song. They are going to get smaller slices of the pie.
With DRM gone, there's no tie to iTunes and as well, people aren't as leery of buying music online because they know no matter what, their music will play in their car, on any mp3 player, and won't expire or screw up. It will spur rapid adoption of online music because it's easy to use, easy to share, easy to listen to, and gets you exactly what you want, without paying for filler.
And further, with rapid adoption of online music, the 'indie' bands now have a greater chance at making it big, because there is no reliance on music industry to play their music on the radio. Digital music will hit a critical mass quickly I think, and services like Pandora and Last.fm will become the standard for listening to music, instead of turning on your radio. You'll tell Last.fm that you like bands X, Y, and Z, all of which are mainstream bands. Then Last.fm will say "hey, you like them, you might like bands A, B and C" -- which are indie bands.
And in the end, the only people who are going to gain are the fans -- artists won't be able to produce filler CDs because they won't be able to make a living off of them (ala Britney Spears and the others), record companies won't control what we listen to because we have services like Last.fm, Pandora and the wonderful "word of mouth" (which is lightspeed on the internet). Music industry loses control, artists realize that if they are good, they can self-publish, and they all lose out.
As Cartman said to Token in South Park (playing the role of the Music Industry here) -- "From now on, we are an entertainment team, Token. You just do all the singing, all the performing, and all the entertaining... and leave the rest to us." That really won't work any more. And it's a good thing for us as fans, bad for the recording industry. And it's inevitable anyway.... just give it time.
Re:Told Ya (Score:5, Informative)
I spent 8 years in the video game industry and eventually wound up as one of two guys in the studio responsible for Copy Protection. I got the dubious honor of dealing with the tools to make sure all our CDs had our chosen form of copy protection "working".
At no point did I think the copy protection was worth the time and money we spent on it. The members of management I talked to about it weren't convinced that it was worth it either. But there was just enough anecdotal "evidence" of pirates completely eviscerating sales of games that shipped without copy protection that management was terrified to try and ship without it.
Next time you hear the **AA's going on about how piracy is killing them, realize that they may be targetting those who make decisions about including DRM just as much, or possibly more, than they're targetting the lawmakers or joe public.
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Re:Told Ya (Score:4, Funny)
As long as the lawyers get their payment in the same form of the people they're representing, I have no problem with it. M$ Pays with vouchers for M$ products,lawyer gets paid in vouchers for M$ products.
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