12 Comments

Summary:

Are you surprised that music industry executives are not really that keen on selling music without digital rights management? Thomas Hesse, president of global digital business and U.S. sales for Sony BMG at National Association of Recording Merchandisers annual convention pretty much summed up the music […]

Are you surprised that music industry executives are not really that keen on selling music without digital rights management? Thomas Hesse, president of global digital business and U.S. sales for Sony BMG at National Association of Recording Merchandisers annual convention pretty much summed up the music biz mind-set.

“We don’t want the whole world to be a college dorm. Because that’s what a no-DRM world looks like–it’s a world in which all product can just be cloned without limitation.” (Forbes.com)

Treating your customers like common criminals is a sure fire way to destroy your biz, but never mind. According to Forbes.com article, there is a lot of resistance to selling the non-DRM music, not just from record labels but also from music retailers such as Napster, who are looking for a simpler, easier solution to it all.

“We don’t want to confuse customers,” (Napster Chief Executive Chris) Gorog said. “It’s all or nothing. We’re not going to do it incrementally.” (Forbes.com)

Well, at least this time it is not Steve Jobs fault – he is trying (yes I am being ironic here!), but the record labels don’t want him to.

You’re subscribed! If you like, you can update your settings

  1. Steve Jobs is trying? You people are so bloody naive it makes me sad. Steve Jobs knows fully well that a no-DRM world spells the death knell for America’s lead in intellectual property. He knows that EMI, for various reasons, the most important of which is “no other choice,” is the only label willing to consider it. And he knows thousands of naive pundits and soft headed Apple groupies will fawn all over his feigned interest in supporting a DRM-free world. Get a grip. If he advocated a DRM-free world he would be one the first to push it at Disney where he is a director and one of the largest shareholders. Secondly, if Jobs really had consumer interest in mind he would license his FairPlay DRM to the other music sellers like Napster, Rhapsody and Yahoo so that their music would play on iPods. Remember, iTunes is not a profit driver for Apple. iTunes exists almost solely to drive iPod hardware sales. No, people, Jobs is a master negotiator and a master publicity stunt man. He’s also a pretty good CEO, but that is not the point of this discussion. Can’t you people understand that DRM is necessary to retain any IP value whatsoever? And can’t you see that Jobs is in fact a major stumbling block in the migration toward digital music? Interoperable DRM would solve the problem and Jobs, through outright refusal and publicity subterfuge, is stopping it.

  2. Agree with the comment above – all you guys that think everything should be free are filled with high octane ignorance. Even if most people are naive about copyright laws and IP Protection – you should at least as one writing on the subject matter spend a few of minutes for a good primer on the laws of the land – the same that lets you put the following at the bottom of every page on your blog “Copyright © 2001-2007 GigaOmniMedia, Inc. All rights reserved.”

    And as for even suggesting that Jobs is the one pushing to put an end to DRM – I think that MAC you are using is emitting some radioactive brainwashers – the Sean Hannity kind – private labeled for Steve Jobs.

  3. Both of you make valid points. I think there is a little bit of trust which needs to go into this business. If you are taking my content and putting it on your internal blog, that is not a problem. You started selling it as your own, then it is a problem. I am trusting you.

    Similarly, there is the DRM factor – Music industry assumes we are all criminals and will freely swap music and give it away. Really, you couldn’t do that by ripping CDs as Mp3 files.

    On the Jobs, the ironic part didn’t get through – and that is my fault. I think everyone is part of this DRM status quo. Jobs has simply thrown the ball back in the record labels’ court, and they are behaving as they are expected to.

    My argument on the whole DRM debate is not whether companies should (or not) pursue it. But please don’t treat everyone as criminals. I buy music from eMusic which is Mp3 and DRM free and with the exception of an occasional mix-CD i make for friends, I don’t pass it around or put on P2P networks. I am betting Wyly and G – both of you are in that camp as well.

  4. OM- thanks for the follow through…. Even if we disagree on how to handle the “trust factor”, the interpretation of copyright laws and ensuing business considerations, I agree with you on the need for better ways to remove the unfortunate side-effects of DRM.

    When you look at content protection from the lens of the rights holder – it is a very different picture. The complexities of thier contractual obligations have their origins in copyright laws. Whether it makes business sense in the digital age – that debate will continue for quite some time.

    Rhetoric aside, you are nevertheless a “stand up guy”!

  5. DRM is an attempt to make the business model of the previous century work in a completely new landscape. Faced with technological and market change like the one happening in digital media, any other industry would have been forced to revolutionize its business or leave it to new players. However, the big recording (and movie) companies have confused “copyright” with “a right to make the old business model viable”.

    What is happening to music is plain, old “civil disobedience”. When governments or companies go too far in trampling on people’s needs, they rebel against the regime and take matters into their own hands. I’ve sat through hours and hours of consumer research on digital music, and the story is clear – people who are law-abiding in every other area steal music because they do not understand why they should buy products that are purposefully made broken – what you get when you buy has DRM, what you get from Limewire hasn’t.

    The big confusion about this is the belief that music theft is primarily a matter of price (“I want to pay zero rather than 99 cents”). The reality is that it is a quality and convenience issue. The recording industry has for over a decade hamstrung all the innovative companies that have tried to reinvent the music business in a law-abiding way, thus creating a huge competitive advantage for the pirates. At the same time it has accused consumer of being thieves and used artist’s money to push draconian legislation.

    When the smoke clears and the big labels and their allies are just shadows of their old selves, they will have only themselves to blame.

  6. Lionel Hutz Sunday, May 6, 2007

    Om, I have heard your comments about “being treated like criminals” too many times.

    How is this different from Windows requiring a license to operate?

    It isn’t. But you usually wouldn’t think M$ is treating you like a criminal if you used Windows. You would think it’s common practice. Music is no different. It’s IP protected software as well.

    Stop feeding into the juvenile madness that is running rampant among the blogerati.

  7. Lionel,

    It is the trust factor ain’t it. Apple gives me the OS to use with the computer. I am not giving it away. The windows license is annoying – and has become even more annoying in recent times – activation and what not. one of the main reasons I don’t like buying the Microsoft products.

    Microsoft Office for Mac – I bought it and have installed it on two machines – home and laptop. Similarly, I buy a CD and rip it, but don’t distribute it. If i got DRM free music, I would behave by the same code of personal ethics.

    I choose to believe that we are all not going to be populating the P2P networks.

  8. Lionel Hutz Sunday, May 6, 2007

    Assuming that the honesty of the potential majority outweighs the crimes of the few is pretty optimistic don’t you think?

    Using your logic there should be no Gun laws because YOU aren’t going to shoot anyone. Right?

    The satellite and cable companies shouldn’t worry about theft because YOU wouldn’t steal their signals.

    Movie companies shouldn’t worry about P2P downloading because YOU wouldn’t download a movie or rip and upload a DVD.

    Do you get what I’m saying? This isn’t about you, the moral user, this is about stemming the tide that is getting higher everyday. There’s a lot of people who aren’t like you… a MASSIVE amount, and for that reason restrictions are in order.

  9. Consider, dear people, that the DRM itself isn’t bad, it’s the lack of operability that comes with it between devices. If someone were to solve that main issue, the bad side effects of DRM are quite minimized. I’m not advocating DRM here, just pointing out the main flaw.

    Also, a little basic marketing would go a long way towards solving this problem. People are clearly not buying the DRM-dog-food at $.99, but might at a lower price point – say $.49. After all, there is plenty of evidence that people do pay for DRM-free music (emusic) and at lower price points per song (allofmp3.com) and don’t have the inclination or time to cruise P2P networks and hope to find what they are looking for.

    Consider a two tier pricing system where the DRM-file is available for $.49 and the mp3 is available for $.99. Folks with less cash might prefer the cheaper, less-optimized tracks. Basically, all you are doing here is giving people more rights/options the more they pay. Sounds like a million other industries I can think of…

    The other side of the DRM coin here is that the labels need to come to grips with the fact the “gravy days are over”. They need to rightsize themselves and find a model that will work with consumers, not against them. Gripping tightly to the DRM-stick will only hasten the demise…

  10. Matt MacQueen Monday, May 7, 2007

    This is a user experience issue. Ask yourself: how do these potential solutions manifest to the customer?

    Trying to tie a digital file to a single physical device will eventually go the way of the abacus. That’s not a long term strategy for a happily thriving, legit digital music marketplace. I look forward to big changes in the way the music industry approaches customers, where the businesses can think creatively about how to please them. Selling music in a customer-hostile and wildly frustrating (non-interoperable) manner will only drive customers further away from legit payment methods. It’s evolve business and distribution models, or head for the tarpits.

    The generation that grew up with Napster1.0 as teens ere not born thieves, they are native P2P users. Until the labels can come up with a P2P marketplace that ease and speed access — with payment and monetization (ad supported or otherwise), they’ll lose the chance to monetize these customers forever. Changing billions of users behavior is like trying to put the genie back in the bottle.

    Now the value chain is moving now down to the retailers, both brick-and-mortar, and online retailers — while the labels cling to the balance sheets of 10 years ago. They can’t expect these kids to just waltz back to the malls and buy CD’s like it’s the 1990’s.

    As with anything related to user adoption, unless an alternative makes it easier for the customer to adopt, don’t expect behavior change. It’s a user experience problem to fix.

    Has anyone at the labels ever asked: How can we make it simpler and easier for our customers to purchase our music and use it on their home and mobile devices? Discussion needs to start there. Make a happy customer FIRST, and earn a sale. Keep them frustrated with antiquated techniques, and they’ll choose an easier, more flexible user experience everytime. Make it easier for people to pay for and use the music they buy, across digital touchpoints and devices.

    It’s a UX issue.

Comments have been disabled for this post