EMI Experiments With DRM-free MP3's

trifster writes "Ars Technica has an article about EMI selling DRM-free MP3's through Yahoo Music's US online store. It should be noted that this trial is an attempt to increase sales and competition with online music that is not necessarilary available on iTunes." From the article: "Why the sudden interest in non-DRMed formats? It appears that the record labels are slowly beginning to realize that they can't have DRMed music and complete control over the online music market at the same time.... There are signs that consumers might be growing irritated by the Balkanization of the online music scene. Nielsen SoundScan reports that online music sales dropped during the second and third quarters of the year."

Great!

So I can get 3 songs from artists I would pay not to hear without DRM.

Nothing new

I've been "experimenting" with DRM-free MP3s for years...

Good job guys

...for finally figuring out that controlling, say, 30% of a market with 50% piracy is better than controlling 2% of a market with 10% piracy.

Re:Good job guys

I honestly don't think that everyone in the music industry is as greedy or stupid as we would assume. I am willing to bet that there are dozens of executives who (like the majority of slashdotters) believe that the recording industry would be far better off if it reduced the cost of downloaded music to make stealing music not worth the time involved; if you're spending $0.25 per song (to pick a number) most people aren't going to bother with looking for torrents of new albums. They also realize that there are people (like me) who would then pay for an album they normally wouldn't associate with if it was inexpensive enough; terrible dance music is pretty good to run to.

I suspect the problem is that people who see things the same way most of us do are the 20/early-30 something iPod owning executives who do not have that much weight with the companies; I expect that in 15 years most record companies will catch up to today's reality ...

Re:Good job guys

I expect that in 15 years most record companies will catch up to today's reality ...

And where will that put them? Oh, that's right. 15 years behind the times...We can only hope that their thinking will be so "progressive."

Sheep

Honestly, if the sheep would stop buying crippled music, the crippled-music industry would die in less than 10 days. baa baa

Stop buying CDs altogether and the **AA suing everyone's grandmother would die in less than 30 days. baa baa

Re:Sheep

Strangely enough, allofmp3 was selling DRM free music in multiple formats for years and look what happened to them.

Hmmm, guess it has little to do w/the sheep and more to do with the power of the conglomerates and their lawyers.

Re:Sheep

I thought the main problem with allofmp3 was that they didn't have permission to sell what they were selling, not that it was drm free.

Re:Sheep

Stop buying CDs? And what? Buy only downloaded compressed formats? Whatever. Obviously you don't own a Squeezebox or nice hifi system. Maybe you listen to all your music through some crappy headphones that came with a portable music player. Maybe if they find a way to do DAE off Vinyl I'll switch to that. (no, not the scanner hoax posted on Slashdot before). I want the freedom to choose the format my music is compressed in if it is compressed at all.

Sales dropping

Could we get more data on that? Is iTunes also falling or are the WMA based (napster et. al) skewing the statistics in general? Also how about emusic and allofmp3.com?

What is the OP talking about?

"It should be noted that this trial is an attempt to increase sales and competition with online music that is not necessarilary available on iTunes."

I don't get how the OP infered that statement from the article. Both of the songs cited in the article (A single from Norah Jones and two tracks from Reliant K) should be on iTunes. Apple has an agreement with EMI, just as Yahoo Music/Musicnet has an agreement with EMI.

eMusic on the other hand, representing a much larger percentage of the independent labels out there, has a selection of music that can't be found on iTunes.

Does anyone have numbers on this?

Does anyone know if Christian music lovers are in the demographic of illegal file downloaders?
Christians are supposed to be honest and pay for stuff anyway, right? Just how big a risk is this little online venture?

If these files start showing up on P2P lists, what does that say about us all?

Re:Does anyone have numbers on this?

Christians are supposed to be honest and pay for stuff anyway, right?

On the other hand if you do steal a Christian artist's music, aren't they supposed to forgive you for it?

It's the price, stupid

Wake up RIAA and realize that the price of music drives piracy. People will always have an incentive to crack DRM if they can't get the music for a fair price legally. I imagine the music industry is scared to death of sliding music prices, even though that's where it's going to head eventually. There is some point between "overpriced" and "free" at which both consumers and most artists will be happy. Those artists who expect to become millionaires from a popular record (and who don't tour), are going to be sorely disappointed. Those artists who are happy making a decent living, and who actually produce good music, will prosper.

Re:It's the price, stupid

"Wake up RIAA and realize that the price of music drives piracy."

Pricing drives shoplifting, auto theft, and lots of other crimes. Businesses can take this into account, but no matter what industry you're in, there's always going to be a certain percentage of people who will try to help themselves to your product for free and use pricing as a rationalization.

"People will always have an incentive to crack DRM if they can't get the music for a fair price legally."

Agreed, but for many people, "fair price" has been sliding downward so that it's below whatever price the industry sets. Remember six years ago when CDs were $20 and online tracks were $3 and hard to come by? People justified P2P usage back then because CDs were so expensive and legit online tracks were expensive and offered little selection. Today, new CD releases are south of $15 and selection of online music is plentiful at $0.99 and below. Yet this price is still not "fair." For many people, it never will be. Those people likely aren't high on the record companies' target audience... unless you're counting lawsuits.

"I imagine the music industry is scared to death of sliding music prices, even though that's where it's going to head eventually. There is some point between "overpriced" and "free" at which both consumers and most artists will be happy."

...and the industry has found that at $0.99. The iTMS has been an overwhelming success, despite the fact that everybody on Slashdot hates it because the pricing isn't "fair" and because the product is DRM-laden.

You are not going to believe this, but if online music pricing dropped to $0.80, $0.70, or even $0.50, I would not buy more. I buy all the music I want online, and $0.99 is not a burden to me. It's conceivable that I'm the only consumer on the planet for whom there's no elasticity between $0.99 and $0.50, but that's highly unlikely. Pricing theory is all about finding that point on the curve that makes the most profit, even if it means that you're limiting your potential customer base.

"Those artists who expect to become millionaires from a popular record (and who don't tour), are going to be sorely disappointed. Those artists who are happy making a decent living, and who actually produce good music, will prosper."

This sounds a lot like many arguments I hear for lower music prices which end with some form of "artists will just need to accept their new place in society." Why should they want to do that? Many people would trade fame for money, but many would not. If I offered to make you more well-known but your salary would have to drop by $20K a year, would you do it? Do you think everybody would take me up on my offer?

Re:It's the price, stupid

...and the industry has found that at $0.99. The iTMS has been an overwhelming success, despite the fact that everybody on Slashdot hates it because the pricing isn't "fair" and because the product is DRM-laden.

How do you define "overwhelming success"?

We know from simple division that even among iTunes Music Store customers, the average number of purchased tracks is 21. We also know that the number of illegal downloads continues to outnumber legal downloads by 40 to 1. (Both of these stats come from previous - and recent - stories posted here.) People continue to fill up their iPods with music they have obtained elsewhere (legally and illegally). If such a small percentage of music sales can be deemed an "overwhelming success", then what would constitute failure?

I think the music industry has seen these stats, they know these stats, and they also know that even with whatever limited success iTunes and the like has had (and it is "limited" at best, not "overwhelming"), most of that success belongs to Apple, Real, etc. Not to the music industry itself. So they know they've still got big problems.

This sounds a lot like many arguments I hear for lower music prices which end with some form of "artists will just need to accept their new place in society." Why should they want to do that?

Whether they want to or not is not really relevant. The fact may be that they have to.

Look at it this way. In the late 1800's, a lot of people made a lot of money in the railroad business. By around the 1950's, that was no longer possible - the business just wasn't what it was anymore. Media is just like any other business, and in fact the exact same thing is happening to the newspaper and magazine industries right now. You can never count on a business to make you rich forever. How you feel about that as a member of that business matters not at all.

Unless you want to count classical composers who often consorted with kings and queens (but were rarely really rich themselves), the whole notion of getting rich by writing and playing music is an entirely recent phenomenon. It's not something anybody would have assumed 100 or even 50 years ago. It was something people did for the love of the music, and hopefully they did it well enough to make a living. That living was mostly made through playing live, not through sales of media.

Many people think the music industry's run as it currently exists is simply over. It does happen. Industries come and go as times change; they are not static things.

That does not mean music will go away. It just means the current major label-dominated industry itself might, along with the ability to get rich by selling records. Being a musician may become more like any other profession, where the savvy and talented can make a good living provided they continue to work year-round playing live, releasing new music and creating other related merchandise. Labels will still exist - there does need to be someone to do the real production and promotion work - but they may not be dominated by the four majors. The entire industry may look a lot more like the indie record industry of today. eMusic may be the new model. Or, the opposite may happen, and it already sort of is - musicians that want to get rich will need to become "brands", transcending their career in music and turning themselves into full-on multimedia campaigns. Or, there could be some combination of both models, which is probably the most likely scenario. But you won't be able to get rich just selling records for very much longer.

It probably sounds far-fetched to you, but then in 1930 there probably wasn't a man alive that thought there'd come a time when the New York Central wasn't steaming from New York to Chicago six times a day. Things change in business, often dramatically. And new technology is what drives that change.

It Will Not Be Long

With the rise of iTunes and downloading music online, people are already getting upset about what they can and cant do with the music they OWN. These companies are looking to control how you can use the things you own and people do not like it. One iPod per iTunes, cant share music files, cant move music library - these are just some of the issues people are beginning to realize as they explore the world of digital music (Average User).

People want to do what they want with the things they own, period. Companies should not be deceiving consumers by giving the illusion of ownership when they purchase a song. Instead they should be prompted warned that buying said song from said service will result in the following restrictions. Well maybe they are better off telling them they are not allowed to do anything with the song besides X and X, just to save time and space :)

If the DRM was explained and the restrictions spelled out, as they should be, sales on iTunes and other services would begin to fall as soon as any alternative that allows people to do what they want with the songs comes out. Of course, seasoned digital music consumers have found an alternative already, but no money is being made off that yet... If no alternatives are allowed to hit the market then the average user, as they become more knowledgeable about the issue, will result to the same methods.

Three words....

IT'S A TRAP!

Quality / Bitrate..?

DRM free..? Well, okay... I'm listening (so to speak). But if the quality isn't 192kps and up then I'm not interested.

Personally I'd rather see a "more legal" version of allofmp3.com... Choice of format, bitrate, etc? Yes, please. I'd be very happy to part with my hard earned cash in that case.

Wow

Like, I'm so touched. Thank you EMI! No really, that's so amazing. It more than makes up for the destruction of countless peoples lives and the endless misery you have caused! Way to go!

Re:Wow

endless misery you have caused

I know you're trying to make a point, but Celine Dion isn't quite THAT bad.

Allofmp3.com

This one will bite the dust as soon as the other cartel members get wind of it.

This is the same cartel convicted of fixing the price of CD's. This is the same cartel has the ability to maintain an artificially high $10-$18 per new CD. Look at the demise of allofmp3.com. http://en.wikipedia.org/wiki/AllOfMP3.com_legality [wikipedia.org]

The money to be made by eliminating your right to first sale is too powerful.

Balkanization of media download services clearly benefits the media cartels.

Consider this story another sad footnote in the history of your rights being taken away.

Which song?

OK. I am willing to spend $0.99 on a DRM free song by Norah Jones just to "cast my vote" that I am willing to buy DRM-free music. Could someone please tell me which song it is? I can't seem to find that information anywhere.

Re:Which song?

The Norah Jones song is "Thinking About You" from the new album "Not Too Late" due January 30th, 2007 and it's nearly impossible to find on Yahoo Music's site. It's a 192 Kbps mp3. Here's a direct link to the promo landing page (don't ask my why it's at "amplified.com"):

http://www.amplified.com/thinkingaboutyou [amplified.com]

Oh yeah, FF users, ignore the message about "No Windows Media Player". You don't need it. Just click OK.

Re:Which song?

Thanks. I found it. If you want to start at the Yahoo site, the link is http://music.yahoo.com/promos/norahjonesmp3/ [yahoo.com]. By the way, I did purchase the song. It's not too bad. I just wanted to let them (RIAA, EMI, etc.) that I'm willing to pay for non-DRM'd music.

Not Easy to Find, Not Easy To Buy, but I did it.

So, yeah, I searched Yahoo's site, and pretty much think the article is wrong. Yahoo Music is not selling this track as an MP3 (alternatively, their peanut butter may be spread so thin they're simply unable to actually execute the policy of selling it, even though they've decided they're selling it).

But this "amplified.com" site is in fact selling it. However, I've never heard of them before, and like a lot of other online retailers who I've never purchased from, I'm reluctant to hand over my credit card number. So I decided to use a feature my credit card offers called "ShopSafe", which lets you generate temporary numbers with a given limit and expiration date.

I decided to use a temporary number I created two weeks ago that had one dollar left on the account. The purchase came back "declined due to insufficient funds". Odd, given that the track was supposed to be $.99, and there's a dollar left on the limit.

OK, I decided to create a new number, just in case the old one was the problem. Limit $1, expires 2/07.

Declined due to insufficient funds.

Well, maybe like many companies, they actually ding you for just a bit more for some reason. OK. I bumped the limit on the temp number up to $5.

Declined due to insufficient funds.

Suffice it to say that if this was just about purchasing the song, I would have given up by this point for certain. But I don't want some brain-damanged analyst who is unable to fathom the very idea of *ease of experience* to attribute the failure of this promo to piracy (or worse "people like DRM"), so in principle I want to support it.

$10 limit: declined due to insufficient funds.

I'm sorry? $10 in an account is not enough to purchase a $1 song? This must be the kind of Math that the analytically challenged record labels use to determine their loss figures.

I was finally able to buy when giving the card a limit of $25. For a $1 song. Not to mention 20 minutes of work.

It is an MP3, and it's not bad. For the song itself, it wouldn't be worth the hassle.

They want access to the iPod Market

I don't think this story is really very much about the record industry starting to recognize consumer frustration and so on. They simply want to distribute digital music through channels other than iTMS and still maintain access to the iPod market, which is enormous. This is the sensible explanation put forth by the WSJ (although they speculate consumer demand is a driver as well): In a Turnabout, Record Industry Releases MP3s [wsj.com]

From the article: Blue Note and other music companies are beginning to think they will have to sell some MP3-formatted music both to satisfy customer demand and to provide access to Apple Computer Inc.'s iPod for songs that are sold by online stores other than Apple's iTunes Store.

this is crap

This is PR crap, and Yahoo along with EMI don't deserve the light of day for exposure about this stunt.

I went to the yahoo music web site, and nowhere on "page one" is there a hint about selling mp3s.

So, yahoo and EMI skate by getting a publicity tour out of this while not even really brushing up against what non-DRM music is all about? (I remember the last unencumbered debacle, they were selling a Jessica Simpson track, and they would customized the track to put your name in the song.... Sheesh)

I really wish these people would go away with their stunts or be ignored (I know, I'm not ignoring, huh?).

My favourite non-DRM MP3 source...

http://www.Zunior.com [zunior.com]

I'm not affiliated, other than being a very happy customer.

No such signs

There are signs that consumers might be growing irritated by the Balkanization of the online music scene. Nielsen SoundScan reports that online music sales dropped during the second and third quarters of the year.

This bit of misinformation has been getting around lately, actually they claimed the same thing last year. Perhaps they're hoping that if they say it enough it will become true? (Paging Godwin)

Look 4Q is always the highest, think Thanksgiving and Christmas... followed by 1Q, think people using their iTunes gift cards or trying out the iTunes Store now that hey have a new iPod. I'm sure practically every consumer goods business has a similar sales graph where things drop off after Xmas. It's just interesting to me that analysts are using this to predict the death of the iPod ... oooops, perhaps I've just hit the nail on the head there, the anti-Apple folks need something to predict for the next 20 years. :-)

The model that would work for me.

You sell me the MP3.

You record that you sold a license to me.

If I need it again in the future, you will allow me to get another copy of it for a nominal charge such as 10% of the original purchase price. This will be reasonably limited to one replacement copy per year. However, if I'm brought up on charges and have a copy of that version of the song in my possession, the license cover it and protect me from prosecution. I am not authorized to offer the song for upload but I can transfer my license to another person by paying you a reasonable transfer fee.

You may offer me upgraded versions but they will be at a discount reflecting that I already paid you for a license.

You may charge me a reasonable fee ($20 to $30) per year to keep records of and track my licenses.

You charge a reasonable price for the songs. Roughly 20% of minimum wage for new songs and 5% of minimum wage for songs older than 5 years.

Zune

I wonder if the release of the Zune has anything to do with this. With MS turning it's back on play for sure, the DRM format war has pretty much fizzled. There is the Apple option, with the iPod, and then there are a few other DRM options that might eventually share 25% or so of the music. So how do you sell music, and not piss off customers who want to play it on their chosen device. Fairplay won't work on a zune, but an unencumbered MP3 will. it will also play on the iPod. And you don't have to be a slave to the Apple pricing scheme.

It could be that MS did us a favor by abandoning play for sure.

Digital music sales falling?

I don't understand the spin they're putting on this. According to the graph in TFA, sales dipped slightly in Q3 of last year, then skyrocketed through Q4-Q1 of this year. Through Q2-3 of this year, sales have stayed steady, but still WELL above last year's sales. If they jump again in Q4 and next year, they're growing at a ridiculous rate. I think the article is bending the numbers just a little bit when they say digital song sales are stalled for the first time since the ITMS launched.

itunes

They are doing this out of desperation. Now that digital downloads are catching up, they have lost their power over the sales channel. They have to talk to apple as equals and cant impose their tiered pricing schemes to them. They have lost control.

The ipod is more and more entrenched in popular culture every day. They are trying to break apples grip on this market with the zune, but its not working.

So if they cant control the DRM used, they don't want anyone else having this kind of control. They know that the one controlling DRM will be the one controlling all of the market.

Oooo, I'm soooo afraid of DRM!

For just about every music service out there, 5 minutes on google will show you precisely and easily how to strip the DRM off the music and convert the song into a regular MP3. I pity the people who download lots of music and keep it in the native DRM format (M4A for example).

Just strip the DRM off, convert it into a regular MP3, and be done with it. No biggy for now.

 

In other news...

Lucifer experiments with Holy Water

Buy some just to help their "experiment"

I'm seriously considering buying some of this DRM-free music -- I normally stay away from major labels -- just to help their little experiment be successful. Maybe if this is a success, media companies will at long last make the realisation that DRM only hurts their customers, and thereby their profits. Some artists on major labels are actually good; buy some of this, even if it's just a couple songs.

Not news...

I have been experimenting With DRM-free MP3's for years -- and they work
pretty good.

Forget Mp3, sell lossless and add value

Music industry this is what you do.

Sell lossless files.

Add value. Remaster the music at 32 bit fidelity, 96khz and 5.1 or 7.1 tracks built in. And add lyrics and other meta data to the stream. You can't get that off a CD so it will become the new defacto standard.

Develop a new volume standard. Stop overdriving the signal and depleating the dynamic range to get volume. Instead develop volume level stats for meta data and require music players to adjust the volume of the song so that dynamic range is preserved.

Devolope a worldwide licence database service that allows people to buy the licences on perticular songs and resell and transfer them to others. Legal and voluntary.

Thoughts and Solutions

The MP3 debate is near and dear to my heart and I've given it a lot of thought. So here is my 25 cents (inflation):

CD prices are not, as such, artificially inflated to an outrageous degree. However, they are IMO spending their money inefficiently.

A LOT of the money they collect for a CD has already been spent in marketing.

If we're going to point our fingers at them and say that they're bad people, we should do it because they're ramming (successfully) horrid music down people's throats.

If you listen to the music put out these days, you'd find that almost all of the songs from a given artist sound exactly alike. *cough* metalliwhiner *cough* or any of the other popular bands.

The reasoning behind this is simple: when mary-muffins goes to buy the latest CD, she is less than happy if all the music doesn't sound as good as the 1 or 2 tracks splattered across pay-for-playdio. (I don't like getting a CD for a single song and have the rest of the CD suck either.)

Mary-muffins would know good music if it hit her in the face, she is just never allowed to hear it. The current RIAA members are the gatekeepers. Remember (anyone?) mp3.com? I do.

I found over a dozen bands that never appear on the splaterworks. Small, little bands with unique sounds and really interesting songs.

CNET bought them and for some odd reason, destroyed the entire music catalog and the service. It no longer exists.

Song (as well as movie) piracy exists for a single reason, and it has little to do with money above a certain age: ease.

If I can download a song or 6, in mp3 or better, at an acceptable bitrate in which I can hear the songs before hand (lower bit rate is acceptable for that of course), and if it is as easy as getting songs from bittorrent or whatever (click and go), then I'd buy.

Otherwise, if I can get superior service, packaging, delivery, and ease of use for free... why wouldn't I?

(Spare me the legal or moral argument. I consider the RIAA to be far more reprehensible than someone infringing on their copyrights. I consider them to have sleazed their way into many of the copyrights they own in the first place. I cite http://www.jdray.com/Daviews/courtney.html/ [jdray.com] as Courtney Love's take on the music industry and http://negativland.com/albini.html/ [negativland.com] as Steve Albini (producer of Nirvana's "In Utero".)

Knowing that the music industry spends a LOT of money on promotion, and that live events and selling goodies (like t-shirts and whatnot) make the bands more money and promote at the same time (assuming people want to see them, unlike the ditzy shizz (those idiotic morons that maligned their country and alienated their entire clientele then wondered what the hell happened)), the music industry simply needs to change tactics.

They would earn (tons) of money, get to keep themselves as the gatekeepers, and take less risk in promotion if they followed this plan:

1. create a web portal and transfer their existing catalog of artists onto it. DRM free.
2. create a small cafeteria plan of offerings ($x for y songs per month, $x per song, and so forth). Create a merchandising link to sell the band's material goodies as well.
3. create a system for preview, band info, perhaps even music videos (streaming, if not download) to promote some hype.
4. DO NOT promote the artists via the normal very expensive channels. Do not pay radio stations to play the artists. Do not spend loads of cash to merchandise them.
5. As an effect of 4, the _patrons_ would then decide to which music to listen. Word of mouth, especially among the teen to college crowd, is the most effective advertising vehicle. You can't buy advertising as good as word of mouth.
6. Use intelligent linking with the bands. "You like x band? You'd probably like y band too. Click here to see."
7. Stick in advertise

Apple doing us a favour

I've never considered this before but could Apple actually be doing us a favour by not licensing fairplay?

By not licensing fairplay the only way for others to get into sales for the somewhat successful(!) ipod is through DRMless format.

I'm sure this has been to the benefit of organisations like emusic which can and do sell unencumbered mp3s to ipod owners.

If the labels want to get into online sales directly the only realistic way to do it is via DRMless mp3 or aac.

Just a thought.

So now...

The Devil may get all the best tunes, but they're DRMed

ant.

Re:W00t - not.

Err, my uncle does. not sure of any other people. I'm a Christian, but most Christian music is admittedly awful! There are a couple of okay Christian bands, I haven't heard these guys. One of Snow Patrols last few singles played a lot like a Christian worship song, I was surprised it ranked anywhere in the charts.. so boring musically, but that's pop music for you..

Never seen 'Xian' used before, I thought it was some kind of oriental thing :p

Re:W00t - not.

"Selling a couple xian tunes w/o drm isn't going to exactly cause a wave of common sense to break out. Does anyone actually listen to this crap?"

Norah Jones has had a couple of multi-platinum albums in the past five years. She's a bona fide star. Relient K are one of those "crossover" Christian bands that have managed to release three consecutive gold albums. By the way, I found this data with about two minutes of Googling.

Per Ars Technica, these artists were picked because their audience skews older. P2P usage skews younger. The Slashdot demographic is also younger, so most people reading this see the world as one where everybody uses P2P to get their music and nobody listens to lame artists like Norah Jones, but EMI is apparently looking at the big picture.