Blog Post

Yahoo Not Only Shutting Music Store, But Orphaning DRM Buyers

We knew Yahoo (NSDQ: YHOO) Music was shutting down but not that it was planning to take down its DRM servers at the same time. Ars Technica reports that Yahoo has notified customers the license servers will shut down Sept. 30. Yahoo had already said its music subscribers would be migrated to Rhapsody. Microsoft (NSDQ: MSFT) eventually took another approach when it stopped MSN Music, promising after a fuss that the DRM-protected music will work through 2011.

What does this mean? Unlike subscription music users, who are leasing music and have no reason to expect it will be available after a service closes, buyers of DRM-protected music think they have acquired the rights in perpetuity. In reality, that only works as long as the DRM works unless the user takes other steps. In this case, the music will keep working on its current computer but can’t be transferred — or re-licensed after operating system change like upgrading from XP to Vista or downgrading from Vista to XP. Yahoo’s suggested workaround includes burning the songs to CDs and ripping the CD back to the computer. Or, as Ars Technica puts it: “Sure, you’ll lose a bunch of blank CDs, sound quality, and all the metadata, but that’s a small price to pay for the privilege of being able to listen to that music you lawfully acquired. Good thing you didn’t download it illegally or just buy it on CD!”

The gist from the anti-DRM set: if you were dumb enough to buy into DRM, that’s your fault. It was a bad strategy and we should all be thrilled that music finally is being sold DRM-free. (Just curious, does this all mean that all the people who used DRM’s existence as a rationale for virtual shoplifting are now paying for it?) Count me in the thrilled group but I’m also one of those who owns a mix of DRM and unprotected media — and one who believes that my rights to use the DRM-reliant media don’t end with a change in strategy. Yahoo tells Information Week it will reimburse users on a case-by-case basis, possibly with reimbursements or MP3 versions. The FAQ is here.

Rhapsody migration: Yahoo Music Unlimited was a cheaper service, $8.99 a month compared to Rhapsody’s $12.99. Subscribers will get to keep that rate “for a limited time.” Those who bought music and transfer to Rhapsody can play it there but Yahoo recommends burning it to CD. User ratings don’t transfer to Rhapsody but will still be available on Yahoo for “use with other music features.”