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Music Companies Mull Ditching DRM

Journal written by PoliTech (998983) and posted by Zonk on Mon Jan 22, 2007 12:20 PM
from the dogs-and-cats-living-together-mass-hysteria dept.
PoliTech writes to mention an International Herald Tribue article that is reporting the unthinkable: Record companies are considering ditching DRM for their mp3 albums. For the first time, flagging sales of online music tracks are beginning to make the big recording companies consider the wisdom of selling music without 'rights management' technologies attached. The article notes that this is a step the recording industry vowed 'never to take'. From the article: "Most independent record labels already sell tracks digitally compressed in MP3 format, which can be downloaded, e-mailed or copied to computers, cellphones, portable music players and compact discs without limit. Partially, the independents see providing songs in MP3 as a way of generating publicity that could lead to future sales. Should one of the big four take that route, however, it would be a capitulation to the power of the Internet, which has destroyed their monopoly over the worldwide distribution of music in the past decade and allowed file-sharing to take its place."

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[+] Does File-Sharing Really Hurt the Music Biz? 435 comments
Phonographic Memory writes "A new study has come out that purports to show a link between file-sharing and decreased CD purchases. Covering the period of 1995-2003, the study looked for a link between owning a computer and decreased CD purchases. The researcher found that 'some US music consumers could have decreased their CD purchases (prior to 2004) by about 13 percent due to Internet file sharing.' In its coverage of the study, Ars Technica notes that the scholarly consensus on the possibility of a link between file sharing and music purchases is missing: 'the dominant impression gained from reading these studies is that finding accurate correlations between file-sharing and loss of revenue for the music industry is tremendously difficult.'"
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  • From TFA:

    [DRM-free music] could change the equation for Apple, which has dominated the sales of both Internet music and digital music players.

    Makes me wonder if they're not motivated to undermine Apple, who fought tooth and nail to maintain $0.99/download against the industry's will.

    The record industry views the Occident, paradoxically, with more suspicion than the Orient, though we're their biggest customers; it wouldn't surprise me, therefore, if they began to roll this out first in the East:

    EMI Group last week said it would offer free streaming music on Baidu.com, the leading Web site and search engine in China, where 90 percent of music is pirated.

    Can someone say, “chutzpah?

    • Re:Undermining Apple? (Score:5, Interesting)

      by simm1701 (835424) on Monday January 22 2007, @12:27PM (#17712304)
      The industry wanted higher prices however. If they came in selling mp3s at double the price on apple, it would be very interesting to see which way customers went...

      On the other hand apple might decide to ditch DRM at that point also - I don't think its ever been completely decided if DRM helps ipod sales and loyalty or not (I dont have a single ITMS store track on my ipod and its full) - its certainly possible that apple would use mp3 instead if they had the option - first and foremost DRM was used to appease the record companies and persuade them to let their music be downloaded legally.
      [ Parent ]
      • Re:Undermining Apple? (Score:5, Insightful)

        by GizmoToy (450886) on Monday January 22 2007, @12:38PM (#17712490)
        (http://www.jason-nemeth.com/)
        I doubt Apple would ever switch to MP3s. They've got too much invested in their format to abandon it now. However, I think that if the music industry would let them they'd be more than happy to sell unprotected AAC files. They've gotten as far as they have because of the iPod itself, not the DRM locking users into the system. If you ask iPod users without any iTunes Music Store purchases if they'd switch players when it's time to upgrade, I doubt more than a small percentage plan to follow their iPod up with anything else.
        [ Parent ]
      • They wanted higher AND lower prices by Comboman (Score:2) Monday January 22 2007, @03:15PM
      • Re:Undermining Apple? by Archibald Buttle (Score:2) Tuesday January 23 2007, @05:42AM
    • Re:Undermining Apple? (Score:5, Informative)

      by vought (160908) on Monday January 22 2007, @12:35PM (#17712430)
      Digital music sales are flagging? Looks to me like they're still growing.

      What the linked article doesn't tell you is that they're counting all music sales - not just online store sales. Overall, music sales are still falling, and the increase in digital music sales isn't offsetting the collapse of CD sales. Record companies are looking for anyhting that will open the field up and get people to start spending money on any delivery format for music.

      Of course, don't tell the astroturfers who write articles like this. You might bring them a little too close to reality.

      Digital Music Sales Doubled in 2006 [msn.com]

      Digital Music sales to more than double in the next five years [forbes.com]

      [ Parent ]
    • Re:Undermining Apple? (Score:5, Insightful)

      by killbill! (154539) on Monday January 22 2007, @12:57PM (#17712798)
      (http://www.killbill.org/)
      I suspect they expected the PlayForSure side to prevail. PlayForSure meant an atomized online music market. It meant no single company dominated it. It meant labels still controlled access to the market.

      But Apple prevailed. FairPlay prevents current iTMS customers from switching to another online music store. It ensures current iTMS customers remain future iTMS customers. FairPlay is the cornerstone of Apple's total domination on the (legal) online music market. It means Apple controls the access to the market, and no longer the music labels.

      Every time a customer downloads a song that is infested with DRM at the request of the RIAA, record labels are putting an additional nail into their own coffin. If they want to break free from Apple's de facto monopoly, they have to drop the DRM requirement. Looks like they finally got it.
      [ Parent ]
    • Re:Undermining Apple? by aggie_knight (Score:1) Monday January 22 2007, @02:20PM
      • Re:Undermining Apple? (Score:4, Informative)

        by jandrese (485) <kensama@vt.edu> on Monday January 22 2007, @04:01PM (#17715192)
        (http://www.ceyah.org/~jandrese/ | Last Journal: Thursday September 13, @11:11AM)
        Eh, China's "average income" is a tricky thing to measure though. The vast throng of peasant farmers don't download digital music anyway because they don't have a computer. The moderized city dwellers however have the disposable income to spend on CDs/online music if they wanted to, but don't because pirated stuff is available everywhere and the legitimate stuff can be difficult to find. By offering people a way to buy stuff legitimately the labels aren't planning to wipe out piracy, but rather to actually make some money in a market where they've previously done almost nothing. You might say "but why would I buy something I can pirate for free?", but I'd point you to the iTunes Music Store and how much money it has made despite being in a very similar situation.
        [ Parent ]
    • Re:Undermining Apple? by danielk1982 (Score:2) Monday January 22 2007, @02:43PM
    • Re:Undermining Apple? by supabeast! (Score:2) Monday January 22 2007, @03:37PM
    • Re:Undermining Apple? by jcr (Score:2) Monday January 22 2007, @04:02PM
    • 2 replies beneath your current threshold.
  • Achilles' Heel (Score:5, Insightful)

    by Billosaur (927319) * <wgrother&optonline,net> on Monday January 22 2007, @12:27PM (#17712298)
    (Last Journal: Wednesday November 07, @10:09AM)

    From the article:

    Most of the push for music unencumbered by digital rights management, or DRM, systems over the past six months has come from technology, electronics and Internet companies. In part, it is because these companies have been largely unsuccessful in their efforts to produce digital locks that are simple and flexible for the consumer, foolproof to the hacker and workable on numerous makes and models of players.

    Which is why DRM is quite useless. Come on -- if worse came to worse, people would play the music on the stereos and record it using digital recorders then run it through their favorite piece of audio manipulating software and have just about the same quality recording. The music industry cannot hope to stop the myriad of innovative ways of copying music and they are fooling themselves if they think they can make DRM "unbreakable." If this report is true, perhaps some in the industry are finally coming to their senses.

  • by jimstapleton (999106) on Monday January 22 2007, @12:28PM (#17712312)
    (Last Journal: Tuesday February 06 2007, @09:13AM)
    next thing you know, they'll be using OSS editing tools
    then servers...
    After that?
    It'll be pandemonium, they'll be joyfully frolicking in the free and open streets... Arms flailing, chainsaws revved...
  • ...right after I get back from my ski trip to hell :-)
    • Long Live eMusic by Happy Tinfoil Cat (Score:1) Tuesday January 23 2007, @01:27AM
  • About time (Score:4, Interesting)

    by koan (80826) on Monday January 22 2007, @12:29PM (#17712332)
    (http://www.lostpacket.net/)
    From where I stand (or sit) DRM wasn't much of an issue, as it was released it was promptly circumvented. I am old enough to recall buying vinyl and when CD technology was introduced the complaint then was the cost of CD's.
    The music companies said the cost would come down with acceptance of the tech but it never really did come down.
    God bless the Internet.
  • about time (Score:1)

    by mike3 (1054482) on Monday January 22 2007, @12:33PM (#17712390)
    about time! I hope they finally change there ways.think the problem will be that they will charge more for the non DRM songs and have to levels or something in that case I'll probably keep buying CD's until they figure it out. If they ever figure it out!!
  • Oh, the irony (Score:4, Funny)

    by geoff lane (93738) on Monday January 22 2007, @12:35PM (#17712432)
    Microsoft cripples Vista with DRM and the potential users of DRM don't want it?

    Oh, the irony.
    • Re:Oh, the irony (Score:4, Informative)

      by delt0r (999393) on Monday January 22 2007, @12:55PM (#17712780)
      \puts on tinfoil hat

      Perhaps M$ want DRM to tie down the PC hardware market to The One OS. The whole: "its the content providers that made me do it", is just the PR department.

      So it goes like this. In the future to buy something online your bank needs you to have a certified trusted computing OS. To get certified reqiures 50,000 US dollars, so there is no free certified version of linux that would work. Then the hardware won't even run a non certified OS because of the "dangers" of uncertified drivers and code running on the hardware. It will be call Genuine Lockin.

      \takes of tinfoil hat
      [ Parent ]
    • Re:Oh, the irony by VEGETA_GT (Score:1) Monday January 22 2007, @01:07PM
    • Re:Oh, the irony by Gordo_1 (Score:1) Monday January 22 2007, @01:27PM
    • Re:Oh, the irony by Anonymous McCartneyf (Score:1) Monday January 22 2007, @07:51PM
  • Change only comes through (Score:3, Insightful)

    by El Gruga (1029472) on Monday January 22 2007, @12:39PM (#17712506)
    PAIN, and now the Music Biz is feeling pain, so they have to adapt. What else can they do? Their monopoly is over, but they should understand that most 'ordinary folks' will prefer to download music from a legal site, and those same folks dont understand DRM, they just want it to work. .....Its amazing that Apple hasnt taken over the world with that notion of 'it just works'.
  • Obligatory Fark Reference (Score:2, Funny)

    by Anonymous Coward on Monday January 22 2007, @12:39PM (#17712508)
    "It's a trap!"

    -Admiral Akbar

    (What? That quote didn't originate on Fark? Oh, frak.)

  • Good, but I don't forget that easily (Score:2, Insightful)

    by Anonymous Coward on Monday January 22 2007, @12:42PM (#17712546)
    It is very good that they are considering to ditching DRM.
    But its not by their own will they are considering that, its because they have to.

    Now, DRM-less music is fair. I will never ever buy DRM-crippled music.
    I wonder what prices they will take, low, reasonable or overpriced?

    Either way, just because its fair with the non-DRM music, does not mean I will just forget what they did and happily and gladly buy their music now even if its not DRM-crippled.

    All their lobbying, scare tactics, intimidation, and evilness. I won't forget that. I don't forget that easily.
  • Goodbye itunes (Score:2, Troll)

    by tedgyz (515156) * on Monday January 22 2007, @12:42PM (#17712550)
    (http://roostme.com/)
    I surely regret commiting to Apple'S DRM and look forward to DRM-free, legal music purchases.

    I really liked the itunes music management, ease of ripping my 300+ CDs, and ease of purchasing new music. But, now I realize I've built my own cage. :-(
  • by grimJester (890090) on Monday January 22 2007, @12:43PM (#17712566)
    Current DRM is mostly useful for locking the consumers into one single vendor for their mp3 players. It might give the record companies some benefit in the long run, as customers would have to buy their music a second time if they buy a new mp3 player, but it certainly eats into their profits right now.
  • If they do it, great! (Score:4, Interesting)

    by GauteL (29207) on Monday January 22 2007, @12:45PM (#17712602)
    (http://lindkvis.blogspot.com/)
    But it also has to be reasonably priced. The iTunes price of $10, £8 or 10 per album isn't actually much cheaper than what you can get on the high street and you can buy a full CD for similar prices on Amazon.

    That is not reasonably priced. People expect lower prices when they receive less and when it costs less to distribute.

    I might very rarely buy an album at £8, but at £4 I would probably buy every album I like.
  • Apple would just sell DRM-free music (Score:5, Interesting)

    by RalphBNumbers (655475) on Monday January 22 2007, @12:47PM (#17712626)
    Those who think that this would somehow immediately undermine Apple's dominance with the iPod are misguided as to why the iPod is successful imho.

    The tinfoil headgear sporting subset of /.ers might like to see Apple's DRM solely as a lock-in scheme, and while no doubt Apple finds any lock-in a reassuring safety net in case they do someday drop the ball on iPod design, for the moment (and for the foreseeable future with the iPhone) Apple doesn't *need* lock-in. The iPod isn't selling because people have huge collections of .m4ps they need to keep compatibility with, it's selling because it's slickly good at what it does and it's a brand a lot of people are pleasantly familiar with.

    The simple reality is that if the Music companies start allowing DRM-less downloads, then Apple will probably make even *more* money selling iPods than they are now, as more people start to buy unencrypted music via their computers to put on said iPods. In the long term their share of music sales may be hurt, but as the world's 4th largest seller of music, they already have plenty of momentum and market power; combined with their slick store and integration in iTunes, I would think they can do just fine in a less partitioned market, and retain a good deal of influence with the music industry selling unencrypted music.
  • There are alternatives (Score:3, Insightful)

    by zesty42 (1041348) on Monday January 22 2007, @12:48PM (#17712630)
    Perhaps, they are realizing that DRM is causing them to lose not only revenue (in terms of people buying less) but market share (people buying elsewhere). I used to buy music that I heard on the radio like everyone else. Since the Sony rootkit mess I get my music from eMusic [emusic.com]. I've found a lot of great bands/labels. Now, no matter what the major labels do, I'll never go back to them 100%. Another less techie friend of mine just recently got fed up with iTunes DRM and ask me to help find something else... guess where I'm pointing.
  • Stupid comment of the day (Score:3, Insightful)

    by gradster79 (878963) on Monday January 22 2007, @12:48PM (#17712644)
    Stupid comment of the day, courtesy of the article: In addition, Bainwol said, the ability of consumers to use legally purchased tunes on different devices is not crippled by DRM systems per se. "We're for interoperability," he said, "and there's nothing intrinsic to DRM that prevents interoperability."
  • by Daishiman (698845) on Monday January 22 2007, @12:49PM (#17712654)

    At some point they'd figure it out. My expectations for this are still very low, since it's been demonstrated that these record execs are a bunch of conniving bastards, and they'll probably find a way to make this crap.

    Still, money talks, and a decrease in sales is just what the doctor ordered, with a healthy injection of brains, in that business.

  • This has been coming for some time (Score:5, Interesting)

    by mce (509) on Monday January 22 2007, @12:50PM (#17712672)
    (http://science.slashdot.org/ | Last Journal: Wednesday August 13 2003, @04:18PM)
    Last week I had a chat with the former managing director of one of the big four labels in my country (and in a few others as well). His personal opinion is that DRM has to go. When asked directly, he stated that in the music industry boardrooms, about 50% of the people are by now convinced that it has to go, whereas 50% have not yet reached that point. One of the things that's holding them back, is that the movie and especially the games industries are putting pressure on the music one not to drop DRM because they fear the domino effect.
  • Looks like I was wrong. (Score:5, Insightful)

    In a previous post on a different article, I commented that the music industry was stupid not to look at the success of allofmp3.com and learn from it. While allofmp3 was bad for the RIAA in that the revenue stream broke down between the user and the RIAA (it ended at allofmp3), its success proved that users ARE willing to pay for their content if provided conveniently at a reasonable price in a usable format.

    In short, they need to make themselves cost competitive with P2P. How do you make yourself cost competitive with something that is free?

    The same way people compete with (and/or make money from) freely available open-source software. Don't market the product itself, market convenience associated with that product. For open-source software, that convenience is packaging and tech support/customization contracts. For music, that convenience is selection and a guarantee of quality. allofmp3 succeeded for three reasons:
    Very low prices (Probably too low for the RIAA's tastes, but even twice the price of allofmp3 would have appealed to many. RIAA could make up for the low per-track revenue via significantly higher volume. e.g. back in the days of pyMusique, I bought quite a few single $1 tracks, but no complete albums. With allofmp3, I frequently would purchase an entire album for $3-$4 even though I was only looking for one track from that album initially.)
    Convenience - allofmp3 had a great selection that made it far easier to find music than on any P2P network. Only the RIAA has the capability to actually beat that selection. Also, people would be more willing to give credit card info to a "trusted" source rather than a clearly shady Russian company with apparent mob ties.
    Last, but clearly not least - no DRM. DRM goes way beyond nullifying the above "convenience aspect", and in fact makes P2P the more convenient option, free or not.
    • Re:Looks like I was wrong. (Score:5, Insightful)

      by Znork (31774) on Monday January 22 2007, @01:15PM (#17713070)
      "In short, they need to make themselves cost competitive with P2P. How do you make yourself cost competitive with something that is free?"

      That's the rub; the entire industry is built upon monopoly control, it is _not_ cost competetive. Allofmp3, eMusic, last.fm, etc have proven there are a multitude of models around convenience that work fine for music distribution (even for uncopyrighted classical music), but _only_ if you have a cost structure that supports the model.

      That means no more media blitzes. No huge launches. No payola. No hundreds of thousands of free cd's sent to dj's and radio stations. No half a million dollar videos for MTV. No coke parties.

      But without those things, they cant control the market anymore, they wont be able to shove their particular artists down the listeners throats and push the independents to the side. They need the huge per-artist revenue and expenditures to minimize the variability and risk in the market, and that entails a high level of control and a high unit price to recoup the expenses.
      [ Parent ]
    • Re:Looks like I was wrong. by fyoder (Score:3) Monday January 22 2007, @02:35PM
    • Re:Looks like I was wrong. by LazyBoy (Score:2) Monday January 22 2007, @02:52PM
      • 1 reply beneath your current threshold.
  • Wrong problem, wrong solution (Score:5, Insightful)

    by UnknowingFool (672806) <minh_duong @ y a h o o .com> on Monday January 22 2007, @12:51PM (#17712704)
    The music companies seem to think that by making online music without DRM, they will help their sagging sales. I don't think that what plagues the industry. Like all industries, the music industry wants growth every year. But they compare sales today to what it was in the boom days. Back then, sales were booming because the CD was replacing tape and vinyl as the preferred medium. The industry didn't seem to see that some sales were people replacing their collection as opposed to buying new music. There are other reasons too (some which were self-inflicted), and it was covered in a Frontline episode called The Way the Music Died [pbs.org] that chronicles the music industry today.
  • Mulled Whine (Score:5, Interesting)

    Can you imagine what "mulling" is like at the executive level of these big music publishers?

    A roomful of people unfit to work in any industry not underwritten by a century-old monopoly. Whose added value lies in conning artists into working for a tiny fraction of the value they create, or their weight in drugs, whichever is less. Or in conning consumers to pay over and again for either some good products produced as "pop" generations ago, or some awful products produced more recently that they sell to children as soundtracks to free music videos and the lives of talentless celebrity models.

    These people don't "mull". All they can do is whine and fail when their crooked old tricks don't work so good any more. Years of lying about DRM and piracy hasn't reversed the drop in their profits, as the least-dumb people have all fled their business. Their decisions are made mainly by listening to tech vendors tricking them into broken tech protection of a broken business model, instead of changing the model. If they do drop DRM before they go permanently broke, it'll be because they can't afford it themselves, or just because they screw up their stupid strategy by making irrecoverable mistakes implementing it.

    Information might not want to be free, but nature abhors a vacuum. The empty space at the top of the music content pyramid is sucking control of all that content inevitably out to unimpeded access by any consumer who wants it.
  • Goodbye DRM (Score:1)

    by bubblewrapmaster (1054500) on Monday January 22 2007, @12:58PM (#17712830)
    (http://www.abcomrents.com/)
    It is about time, maybe DRM will die off. Then maybe I won't feel so guilty for stripping it from my downloads from itunes and napster ;-)
  • by disasm (973689) on Monday January 22 2007, @01:02PM (#17712866)
    I don't know about the average person, but before I got a computer, I would borrow a friends cd, press play, pipe it into the casette deck and press record, and probably collected 100's of cassette tapes for my walkman like this. They can't claim the Internet is what started all this, it just made it more public to them (they can crawl the file sharing sites, but they weren't spying on the friend at my house bringing his cd collection over).

    Sam
  • In other news .... (Score:2)

    by scharkalvin (72228) on Monday January 22 2007, @01:11PM (#17713002)
    (http://www.qsl.net/wa2mze)
    Pigs warmed up and ready to fly, Temperature in Hell drops to 75F, and "W" announces we are pulling out of Iraq.

    Sounds like the RIAA's IQ has risen by a few notches. Now I wish they'd also offer the choice of ogg in addition to MP3. You know, they could still 'finger print' the music files with tags to identify who the original customer was that paid for the download. That way, they could still sue anybody who shared their purchased music. The finger printing would NOT prevent inter-operation of the files.
  • Flagging Sales? (Score:4, Funny)