Sony BMG Dropping DRM

Lally Singh writes "BusinessWeek is reporting that Sony BMG is planning on dropping DRM from their music. Salon's Machinest had an interesting take on this; 'Actually, what's happened is quite ironic. It was the industry's own DRM mandates that tied many music-lovers in to Apple's music storefront (we all had iPods, and the only way to buy digital music for the iPod was from Apple). Now Apple's become too powerful for the labels. They need an alternative distribution channel — they want to get music to our iPods, but they don't want to go through Apple to do it. The only way to do that is to offer retailers like Amazon the chance to sell songs as plain, unrestricted MP3s, which are iPoddable.'"

this should be nice

This should be a nice switch, I've already been purchasing from amazon's mp3 store and find the ergonomics, the quality, and price all to my liking. And, if I find something I really like I purchase the real deal, the CD. I for one welcome our former DRM overlords into the fold.

This only widens and expands the music industry's audience, it is the logical conclusion to a stupid experiment. I suspect there are other efforts in the works to try and keep a grip on their "property", but this is yet another death knell to the music industry as they (the execs, etc) know/knew it. Wait until some breakthrough artist figures out they no longer need to be beholden to the record labels for their livelihoods.

Now, if only we could see some of this sanity become contagious and spread into some of the other media. DRM is a pain and it's ineffective. Just 2 days ago I watched on DVD a movie still only in theater-release -- I won't say where (it wasn't at my house), and I won't say who (it wasn't someone I knew). I would never do this, but it's obvious DRM only makes life more difficult for the honest consumers. (Wasn't there an article recently here about someone's collection of media getting wrapped around the DRM axle because he bought a nice new monitor on which to watch his movies?)

Re:this should be nice

So when will the drop DRM for video? When will I be able to rip a DVD in iTunes and put it on my iPod?
One step at a time. This is a good step but not the last I hope.

Re:this should be nice

I would never do this

I would. I have no problem whatever making life miserable for thieves and miscreants like those bastards who run the entertainment industries.

"The VCR is to Hollywood what Jack The Ripper was to women" -Jack Valenti, head of the MPAA when he made that stupid comment.

Fuck 'em all. When they start running respectable businesses I'l respect their businesses.

Morals aside - what's the end result?

I have no problem whatever making life miserable for thieves and miscreants like those bastards who run the entertainment industries.

In context, I presume you mean pirating their work. Without getting into a moral argument, I do think you should consider the practical effects of your behavior.

We all know that labels screw artists and DRM is bad and blah blah blah, but what happens if your favorite action films cost $50 million to make, but suddenly all of the customers have "digital content wants to be free" philosophies?

Frankly, if nobody pays to see movies, no movies will get made - or at least, only cheap movies where the person making them can afford to eat the cost. No more magical Hollywood special effects. You're not going to see Lord of the Rings get produced under a Creative Commons license.

Even if the whole business isn't "respectable" by your standards, you obviously respect their work enough to watch it. To never pay is to vote for a world where that work is never produced.

Re:Morals aside - what's the end result?

We all know that labels screw artists and DRM is bad and blah blah blah, but what happens if your favorite action films cost $50 million to make, but suddenly all of the customers have "digital content wants to be free" philosophies?

This argument has no basis in reality, though... people are not going to universally stop paying to go to the movie theatre, and they're not going to stop buying DVDs.

I remember another industry that piracy was going to kill. It used to be called the Video Game industry, and man, were they cool. When we were kids, we used to play the darned things all the time. Unfortunately, rampant piracy put them completely out of business and there are no more video games.

Of course, in reality what's happened is that the video game industry has become one of the biggest modern growth industries there is... and you know what? People are still pirating the games too.

I'm not coming out for or against piracy here, but when we have these discussions, we should at least try to look at things from a realistic perspective instead of dogmatic positions.

Re:Morals aside - what's the end result?

Frankly, if nobody pays to see movies, no movies will get made

I guess all that TV I watch is just my imagination hard at work? 'Cause I haven't paid for any TV content (the signal, yes if you have cable/satellite, the content is paid by ads)

Don't confuse "how it's financed under the current system" with "the only way content will get financed"

Beyond that, you're also ignoring the fact that large percentages of the costs of making movies is clearing copyright -- if movies get made using cc content, then they won't cost what they do now. Furthermore, there is nothing that Actor-X does that makes him worth $20-million for a movie. He gets paid that because there is an expectation that the movie will make enough to pay him that. Stage actors make working-type wages (since that is what stage can afford to pay) and they are still able to attract talent. Clearly if movies make less in general, the Big Name Actors and Big Name Producers and Directors will be the first to take massive pay cuts. That doesn't equate to "no more movies being made"

And then the final question I always ask is: who cares if they don't make $100million films any more? If we actually care about the cost of a movie, then the question of "what could we do to make sure that $500-million movies get made?" becomes an equally valid question. Or perhaps 25% of the GDP should be directed at movies to make sure that multi-billion-dollar movies can be made?

Purely speaking, "cost" isn't really a factor in determining the artistic merit, or even quality. "Relative cost" seems to be positively related to quality (roughly), but still no relation to artistic merit.

So if the "cost" bar lowers from $50-million average movie to $1-million, those movies will still have excellent quality - the actors et.al will just be driving Toyota's like the rest of us instead of picking out the Porsche-du-jour.

Re:Morals aside - what's the end result?

But watching the films and listening to the music anyway just says you want the stuff but aren't willing to pay for it like everyone else.

Well...yeah.

Here's the thing: copyright is a balance between the insanity of allowing ideas to be owned, and the insanity of few people creating art because we need to eat. To maintain that balance, the government (the people) struck a deal with content creators--they get a limited monopoly on their work in exchange for creating it in the first place. But eventually, the people get the work, as they should, because owning ideas is idiotic.

Unfortunately, the content creators don't feel the need to honor the deal--they just want to own the ideas outright, forever and ever. I don't particularly blame them--everyone's always looking out for number 1--but the fact remains that they're violating it every time they ask for extensions.

It's not unreasonabe to wonder why one side should agree to a deal that the other side is violating.

The key is that it has nothing to do with the content. A boycott is generally useful for when you don't like what someone is saying, or even how they're saying it. Copyright is a weird beast that really doesn't fall into either of these areas.

Re:Morals aside - what's the end result?

Copyright is primarily an economic tool. It provides an incentive for people to create and share new works.

Copyright is not an incentive for people to create and share works. You should put the flavor-aid down.

Before copyrights and the concepts of IP, people were creating & sharing works. People naturally have a tendency to create, sharing is more of a cultural thing.

Copyright is there is enrichen the public domain(and thus human culture) by granting the author exclusive distribution rights for a limited time.

Copyright is basically a social contract between authors and society. Copyright has been perverted and no longer benefits society. It has become too one sided.

Is it really any surprise for the party being ripped off in the social contract, to start to disregard the social contract?

That's just one big straw man. We're not talking about copyright extensions here, we're talking about DRM and the ethics of piracy. And right now, give or take the current imbalance between fair use doctrine and technological protections (which is recent and mainly confined to the US), the use of DRM doesn't inherently break any part of the deal and piracy clearly does.

DRM is an under the table extension of copyright terms by the author both in length of the copyright and removal of the end user rights.

DRM doesn't know when a work's copyright expires, so this effectively puts the work under an never expiring copyright.

DRM also limits what the end user can do with the work; e.g. time or media shifting.

DRM and piracy both break the social contract of copyright. Kettle meet Pot.

If you get a chance spend some time hanging out with groups of artists(little kids, music, writers, coders, actors, etc). They're naturally creating stuff all the time, some good, some bad.

Re:this should be nice

Wait until some breakthrough artist figures out they no longer need to be beholden to the record labels for their livelihoods.

Actually, artists have a limited choice -- the big this is: wait until some breakthrough recording studio figures out that they no longer need to be beholden to the record labels for their livelihoods. THEN we'll see a revolution in music distribution.

Just imagine -- a recording studio that will give you access to high quality recording and post-production tools, AND will handle your international distribution and publicity, completely side-stepping the labels. There are a few mid-size indie labels that operate somewhat along these lines, but all you really need for music distribution are the artists, the performers (usually the artists, although studio musicians also play a part), the recording studios and a recognizable internet presence.

Studios could even modify their recording contracts so that some of the costs to the artists would be offset by website advertising, and the studio takes a (small) cut of every song sold through their site. This gives the studio impetus for doing a good job on the post-production, but also lets artists eat the cost when necessary.

I Preferred the Root-Kit

Back when Sony was putting root-kits in it's music CDs I felt justified in pirating their music.

Now I just feel OK about it.

Powerful?

What does it mean, Apple's become too powerful, so Sony needs another distribution channel? Is Apple driving the prices up? Is Apple restricting Sony to only sell DRM'd music? Is Apple incapable of supporting non-DRM formats? Does Apple not reach sufficiently worldwide.

Like a guy who's murdered his parents pleading mercy as an orphan - Sony pleading innocence over where they're at with ecommerce of their music.

Re:Powerful?

What does it mean, Apple's become too powerful, so Sony needs another distribution channel? Is Apple driving the prices up? Is Apple restricting Sony to only sell DRM'd music? Is Apple incapable of supporting non-DRM formats? Does Apple not reach sufficiently worldwide.

More like, "Apple won't bend over and cede to our demands!"

Everyone knows that Apple has a standard iTunes contract. Now that iTunes has proven to be the #1 place to get music legally, and is something like #3 in marketshare for music, the labels are worried because Apple has this store that sells to the #1 music player, and no other store has that potential. Apple could very well dictate the terms, basically by saying "This is our offer. Take it or leave it." (whether that includes iTunesPlus or not... I don't know).

Amazon opens up a store that's DRM free, and backed by a relatively large and well-known company.

Labels have a choice - bend over and accept Apple's terms, and keep DRM, and be usable on the #1 music player. Option 2 - make their own terms with Napster/Zune/etc, keep DRM, but be usable on the small subset of players. Now with Amazon, option 3 is, negotiate with Amazon (they need music), drop DRM, and be usable on the #1 music player.

Labels have decided that temporarily, dropping DRM is better than Apple's terms, and hope to make it such that instead of Apple dictating the terms to the labels, the labels will be in the power to dictate terms to Apple ("We have Amazon. We don't need iTunes") and hope that Apple rolls over.

It's really a power play. The labels are afraid of having terms dictated to them, and see if they can make Amazon a powerful music store, that hopefully they can leverage Amazon against iTunes. If Amazon is too powerful, they can ditch Amazon for iTunes. But in the meantime, they know that by weakening iTunes, Apple won't be able to standard-contract them.

And if Apple closes the iTunes store, they can ditch Amazon as well, and we'll be back at square 1. So closing shop isn't a real option, but having iTunes and Amazon compete for labels is.

For the consumer, it's "ain't competition grand?" for now. Once Amazon saps some of iTunes' strength, they'll put back in their demands of "demand pricing" or whatever other crap they want, knowing Apple will want to compete with Amazon.

Interesting play, interesting times. I say, enjoy it while it lasts...

Mistake..weakening itunes

Everybody talks as if Apple dies or thrives on Itunes sales.

WRONG!

Most analysts agree and Apple has all but confirmed they make almost NO money on the itunes store. Rather it's just a vehicle to sell more hardware (ipods, iphones, isomethings). Geeks like devices that have lots of options, and we like to crap on the ipod due lack of this or that feature. Normal non-geeks have been buying the ipod and associated devices due to other reasons other than for the the online itunes store. The idea if itunes goes away the ipod will vanish into oblivion is crazy. If Amazon gets bigger than itunes and Apple can still make a player that sells better than the others it's a win-win situation for them.

Re:Powerful?

With the rise of e-commerce and it's new sales methods, is there any reason not to think that a lot of shopping in the future will be like using eBay? Sports teams and event venues are already experimenting with it, since ticket brokers have shown that they can take more profit on popular events than the organizers themselves. Will we see this sort of thing for initial releases of future products? Say, instead of Nintendo doling out Wii consoles to retailers while supplies are short, hungry buyers bid on them directly from Nintendo?

Apple's reluctance to allow variable pricing does seem weird. Why not do it? The only reason I can think of is the extreme price sensitivity of online shoppers. Even just a small increase in one song over another may result in increased piracy at the most or lowered customer satisfaction in the least, but who knows? It seems like such an easy thing to try out to determine the price elasticity of songs and videos based on their ever-changing popularity. Change prices each week based on ratings and expected purchase volumes. Even just a few cents change can add up.

Actually, the whole thing is kinda scary and may be subject to price discrimination laws, but IA soo NAL.

Re:Powerful?

Such an idea would work if they were to create a limited supply of the content. That's why it works with venue tickets, hardware and the like. There is only so much available, so consumers compete for it. With digitally distributed content, there is no such limitation.

  Now if Amazon started a new program where they would only release x copies of a song a day at a starting bid of 1 dollar, and people had the option of bidding to try to get one that day, or to wait until the next day to bid. Yes, there might be a market for such thing. And prices would likely be high to start as everyone tries to get the latest greatest and they would tapper off as more and more of the demand is satisfied.

  But in reality, such a system would bomb horribly. People who are buying music online usually want to listen to that music right away, so having to bid and wait until the end of the bidding cycle to get the music would turn off a huge portion of your clientel. Not to mention that the purposeful limitation of content for which you are the soul distributor of when no limitation is required could lead to some form of legal liability or monopoly rulings.

-Rick

serves them right

they could have built their own portals in 1999. they didn't. they filed lawsuits against soccer moms and college kids instead

apple came, gave college kids what they wanted many years later, and so the big publishers, by denying reality of the changing business they were in, effectively handed apple all of the power they previously had, and could have retained

they screwed themselves

no sympathy

Fucked by their own dick..

Is anyone surprised at this? Let us examine the Sony portfolio of media...

Betamax - fucked themselves - now deal with VHS gear
Minidisc - fucked themselves - now deal with CDs
Memory Stick - fucking crap - everyone else deals with SD, waiting for them to realize they are fucking themselves
Blueray - nothing exciting - everyone is still basically on DVDs with no incentive to change

Now we can add

DRM digial music - fucked themselves - now drop DRM to sell more.

What's the news?

AllofMP.com has been pioneering the model all along.

Pick one: DRM or copyright infringement lawsuits

They want to protect their intellectual property, which is understandable (although I'm sure some slashdotters will argue this point). But I think fundamentally we're going to have to accept one of two mechanisms by which they can do that. The first is DRM, and the problem is that it undermines lots of legitimate (fair, free) uses of the content. The second is lawsuits for civil or criminal copyright infringement, which have significant statuatory damages.

So I'm happy that people are waking up to the problems with DRM, and that companies are realizing it too. But realistically this means that more enforcement burden will be on legal action, which tends to be economically burdensome on individuals, although it is more likely to produce a socially acceptable result (allowing certain cases of fair use).

--
Educational microcontroller kits for the digital generation. [nerdkits.com]

Why should the labels be in control anyway?

What I don't understand is why the labels have such influence in the sales of music. Contrast it with retail sales and you will understand what I mean. In typical retail sales, the retailer purchases X items from a distributor or direct from the manufacturer and sells the for whatever they choose, allowing the retailer to compete and allowing the manufacturer sell the items for their desired profit margin, the only people who's profit margins are influenced by competition (of the same product) are the retailers.

In the online music world, the Label places all kinds of stipulations and requirements on the seller. Wouldn't they simply be better off selling X licenses for Y cents per license to as many online sellers as possible and let them duke it out over selling as many as possible. You would see Apple's, and many other sellers', profit margins drop as competition raged. Consumers would be buying at lower prices, which would increase overall sales, and advertising would increase as different sellers tried to attract new buyers.

Overall, a simple Manufacturer -> Distributor -> Seller -> Buyer structure where the manufacturer is hands-off on the sales end would probably make the most money for them. Even with piracy raging in the background, I guarantee that if I could pick up a bunch of music for $.25 per song (with $.24 going to the label), I'd be all over it. If the label want's more money for a newer track, simply sell it to the distributor/seller for a higher price and let them figure out how they want to move it.

I would imagine you would see 2 for 1 deals, free downloads, and all kinds of other schemes where sellers would take a loss on the low cost music to see higher profit margins on the higher cost tracks.

All I can say is... stop letting the labels set the retail prices, let competition and demand dictate the price. It's worked for almost every industry since the dawn of trade and there is a good reason, it makes everyone happy because they feel like they are getting a fair deal.

Resistance is Futile.

If you go to Nine Inch Nails [nin.com] website you'll find the results of an experiment they just ran through. They offered an album for free with the option to pay if you felt like it. To cut to the chase, 18% paid for it (at $5 a pop). That may sound like a poor result and it would have been if it was fifteen years ago. Today however, the game has changed, the music industry used to be based around the concept of scarcity. They had a physical product and the only method of distribution involved moving that product around. Today, information can be replicated for almost zero cost instantly world-wide. Scarcity as a assumption in the business model no longer applies. So if traditional media companies are to save themselves they need to radically change their mode of operation or go extinct. Without scarcity, the only other tangible benefit they have to offer is the experience itself. This means shifting where they expect to get the majority of their revenue away from what is no longer scarce - the music itself - to what is still in short supply: live concerts, t-shirts, mugs, unique (signed?) physical items and such. The music itself can almost be written completely off as a promotional expense to attract business to the items that for are still scarce. Information networks have completely changed the rules of the game in many areas and media companies are just the people to experience it first. If they lack the vision to capitalize on products and services that are still scarce then they will remain as relevant as the steam engine. And there's nothing they can do to stop it - no matter how much "protection" they place on their wares there is a whole new generation of artists growing up right now that don't really see a pressing need to sign with a big label in the first place so if the labels don't adapt and continue to offer something of value then, well, economics is a bitch.

An interesting artifact from the fossil record

From http://www.apple.com/hotnews/thoughtsonmusic/ [apple.com]

Apple, Microsoft and Sony all compete with proprietary systems. Music purchased from Microsoft's Zune store will only play on Zune players; music purchased from Sony's Connect store will only play on Sony's players; and music purchased from Apple's iTunes store will only play on iPods. This is the current state of affairs in the industry, and customers are being well served with a continuing stream of innovative products and a wide variety of choices.

and also

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.

That's from 11 months ago - so please, no sympathy for Sony's actions in this.

Re:That crackling sound you hear..

This is THE company known for proprietary ways to do everything. Skies help them if they make an accidental mistake after their "intentional" ones.

And what's with the timing? "We didn't want to ( ?? ) to Christmas sales, so we saved this announcement for the day people got back from vacation / finished inventory."

P.s. Is there a rootkit in your skates?

Re:That crackling sound you hear..

The change of heart only happening after Christmas may have been because the holiday sales of CDs this year sucked [arstechnica.com], down 20%.

Re:Travesty, thats all I have to say.

In Soviet Russia, where the real hacking studs live, hackers soon will massively distribute DRM-ed versions of Sony's DRM-free music, just to show the world how much they hate the established music industry, irrespective of what it does.

In the US, some wannabe high-school hackers will briefly attempt the same, but will be sued into the ground by RIAA laywers intent on showing who still owns the copyrights to and patents on the DRM concept.