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EMI — Ditching DRM is Going To Cost You 220

33rpm writes "EMI has told online music stores that selling its catalog without DRM is going to cost them a lot of money. 'EMI is the only major record label to seriously consider abandoning the disaster that is DRM, but earlier reports that focused on the company's reformist attitude apparently missed the mark: EMI is willing to lose the DRM, but they demand a considerable advance payment to make it happen. EMI has backed out of talks for now because no one will pay what they're asking.'"
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EMI — Ditching DRM is Going To Cost You

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  • by garcia ( 6573 ) on Monday February 26, 2007 @01:50PM (#18155404)
    $9.99 albums of lossy content and no physical medium supposedly make up for the fact that I have no recourse if I lose the data I purchased. So how can they justify charging more than that (closing in on the average cost of a CD) when it costs them money to have the CDs pressed, packaged, and sent to stores?

    They can't. This is simply an attempt to say, "see, we tried to go DRM-less but people wouldn't do it."

    Fuck that.
  • by crazyjeremy ( 857410 ) * on Monday February 26, 2007 @01:52PM (#18155456) Homepage Journal
    Funny, considering one of the main reasons I won't buy DRM products is it already costs more to do so. If I want my favorite Britney song from Itunes, it costs 99 cents. If I want a ringtone of the same thing, Verizon charges me up to a couple bucks for a much smaller clip of exactly the same song. Why would I pay twice for something I can rip from my (wifes') CD and create myself anyway? Don't they see it's costing THEM more money in the long run to include this garbage?
  • by Anonymous Coward on Monday February 26, 2007 @01:58PM (#18155560)
    The extra charge is because they automatically assume that if you purchase it, you'll commit copyright infringement; the charge is a tax/levy.
  • by Dogtanian ( 588974 ) on Monday February 26, 2007 @02:19PM (#18155882) Homepage

    If I want my favorite Britney song from Itunes, it costs 99 cents. If I want a ringtone of the same thing, Verizon charges me up to a couple bucks for a much smaller clip of exactly the same song. Why would I pay twice for something I can rip from my (wifes') CD and create myself anyway?
    Well, *you* wouldn't obviously. But the record/ringtone companies likely figure (probably rightly) that enough people will buy the ringtone, either because they're stupid (don't know that it's possible to rip, or don't know how) or are simply lazy.

    Whether it's good value or not is irrelevant. If people are willing to pay silly money for tiny snippets of music, of course they're going to sell it.
  • Re:Not Surprising (Score:5, Insightful)

    by moore.dustin ( 942289 ) on Monday February 26, 2007 @02:23PM (#18155928) Homepage
    It is not just the question of making profits though. They want and need to be able to _maximize profit_ for their company and shareholders. When they can say that DRM free media is the avenue which will yield the most profit, they will go that route. Again, it is not enough to just make money, they need to make the most they can with the product they sell. Right now, DRM'ed media appears to hold the promise of maximized profit.
  • People will do it (Score:5, Insightful)

    by Mateo_LeFou ( 859634 ) on Monday February 26, 2007 @02:24PM (#18155972) Homepage
    We are going DRM-less in droves. EMI and friends can go with us or not.
  • Question / Answer (Score:5, Insightful)

    by ACAx1985 ( 989265 ) on Monday February 26, 2007 @02:27PM (#18156020) Homepage
    For $10 I can buy a physical CD, and get: 1) Liner notes. 2) Artwork. 3) Plastic casing. 4) Plastic compact disc. 5) Files on said disc which are lossless. I can then convert the lossless files into any format I want depending on my needs, put them on my iPod, put them on my hdd. If I lose the CD, I still have the files. If I lose my iPod, or my hdd, I have the CD. Why would I spend $10 on low-quality files that are DRM-infected that I can't do shit with, and that I can lose much easier? Oh yea, I won't. -ACA
  • Capitalism at work (Score:5, Insightful)

    by Dracos ( 107777 ) on Monday February 26, 2007 @02:28PM (#18156044)

    EMI has backed out of talks for now because no one will pay what they're asking.

    That should tell EMI that their extortion price is not "what the market will bear".

  • by fyoder ( 857358 ) on Monday February 26, 2007 @02:30PM (#18156076) Homepage Journal [] would like to thank you for your business. It knows you have no choice in DRMless online retailers who offer high quality files without DRM at a good price (well, with the exception of magnatune [], but they have a limited catalog), and appreciate your choosing them for your online music needs.
  • by Anonymous Coward on Monday February 26, 2007 @02:32PM (#18156094)

    Closing in on the average cost of a CD? I rather suspect that $9.99 already exceeds the average cost of a CD. It approaches the average cost of a new, currently-on-the-charts CD. I can't tell you how many bargain bin $5 CDs there are out there. And then, there are music clubs (gross, I know, but they exist) that average out to a buck or two per CD. And then you have the used CD market. Plenty of cheaper stuff on Amazon.

    No, it's clearly just a bunch of music execs who are, as you say, trying to pay lip service to DRM-free music while imposing rules that ensure that they'll never have to put their money where their mouths are. That's okay, though. EMI music has been on my blacklist since they started doing DRM-encrusted CDs anyway.

  • by thyrf ( 1059934 ) on Monday February 26, 2007 @02:34PM (#18156138)
    That seems like a plausible argument, but then like most things in life it's not that simple. I'm not willing to dare and guess the amount of money that music and video provides to some of our nations economies. Think of all the shops that will close, the people that will lose their jobs and the public uproar that will follow. Most of us live in a society where we've been fed this for our entire lives - it wouldn't go down too well if it was taken away from us. Then there's the bands (let's be fair, most movies are made by multi-million pound companies). There are some remarkable musical talents out there and unless we buy direct from them they're sure to find other ways of making money.

    I'm all for de-commercialisation and the cutting out of the 'fat cats' but stopping our spending altogether seems a little drastic. DRM is a proce that needn't be paid, it's just an excuse to sponge more money from us.
  • by JustNiz ( 692889 ) on Monday February 26, 2007 @02:43PM (#18156298)
    is how much its going to cost them in lost sales through pissing off customers by keeping DRM.
  • by dgatwood ( 11270 ) on Monday February 26, 2007 @02:48PM (#18156394) Homepage Journal

    Some readers have indicated to us that they'd happily pay more for DRM-free downloadable music from an online retailer, yet it is unclear as to why DRM-free music should cost more. To return to a point made famous by Steve Jobs, the overwhelming majority of CDs sold today already come without DRM on the discs. Furthermore, pirated copies of music are readily available online. As a result, it's not very clear to us why online music that is sold without DRM would need to cost more, but given the razor-thin margins in that market, a "no DRM tax" is quite likely to be passed on directly to consumers.

    I'm not sure where I've seen any evidence the music industry is running on razor-thin margins. This sounds like pure BS, and only hurts their credibility every time they try to state their "case"... So far, I'm not convinced.

    A more interesting question is why the music industry thinks that DRM matters. Their logic violates a very simple law of computers: if one copy exists in an unprotected form, all copies exist in an unprotected form. If somebody says "Hey, check out this cool song," and somebody else asks, "Can I get a copy of that," and the answer is, "No, it has DRM, but you can download it from eMule," that's not an improvement over "Sure, here's a copy." Actually, it's worse than "Sure, here's a copy" because it is encouraging the second person to pirate the music, while giving someone a copy is encouraging that person to watch for other music by that band and maybe buy the CD.

    And I'll say it again: ignoring the one-hit-wonder teeny-pop crap, real musicians benefit overwhelmingly from music piracy. It increases exposure, which in the long term, increases sales. Therefore, all anti-piracy measures are, by definition, short-sighted foolishness by people who don't understand the basics of doing business in a modern economy. Is it any wonder, then, that music sales continue to be in the toilet despite substantially decreased piracy? Guess what? Music copying and sharing was going on before Napster. The only thing that Napster did was bring it out into the open where the industry could total it up and say "Oh, no, we're losing all these sales!" when in reality, by shutting down those services and annoying their customer/fan base, they really killed one of their biggest sources of advertising....

    But I guess some people will never learn.

  • by elrous0 ( 869638 ) * on Monday February 26, 2007 @03:16PM (#18156898)
    Yeah, I think that's what EMI is missing. We ARE going DRM-free. People are sick of DRM and it has reached a tipping point. The only decision they have to make at this point is whether they want us to pay them $.99 a song or $.00 a song.


  • by AusIV ( 950840 ) on Monday February 26, 2007 @03:25PM (#18157050)

    We are going DRM-less in droves.

    Do you have any sources on this? There are certainly some more technically minded people who have avoided DRM from the beginning, but I'm not aware of too many average consumers who have much opposition at all to DRM, generally because they aren't aware. I may be wrong, but I haven't seen the masses flocking towards DRM-free alternatives.

  • by troll ( 593289 ) on Monday February 26, 2007 @04:15PM (#18157758) Journal
    Just look at any other 'protected media' market. All it takes is one person to break it and make it public, then EVERYBODY can just use that person's broken copy. If the Videogame or App scene is any indication, this usually happens about a week or two before the game hits retail. Don't think audio will be any special
    The first time they put out an unprotected copy (say, an actual cd, the only way you could make significant money off of selling music) it will be ripped and spread. Even if you went all 'secured', all it takes is one of the 'secured' formats having a bug and you'll have lost. Then theres the analog hole (cable running from your line out to your line in on soundcard). Then theres just sniffing your computers memory or using hacked drivers to grab the PCM raw. Or any other number of ways you ca get it out, admittedly mostly beyond the common user but all it takes is the first person to break it.

    Want my money? Give me something worth paying for, and incentive to pay for it. I'll gladly pay for music when I believe its's going to actually support an artist that I want to support (like local bands that are unsigned and truely need the money). I'm not going to pay for some top40 song where paying equates to giving money to the very people treating me like criminals so they can fund their next law they need passed, assinine DRM scheme to slow down my computer even further like whatever the audio equiv of Safedisc will be.

    Honestly the only thing preventing me from paying more for music right now is its just inconvenient. Those artists that are actually worth supporting are probably the hardest to get money too. Ordering CDs from half the world away via creditcard just doesn't seem like the most convenient way to do things. Maybe if one of these online music stores would open up and allow indy artists to put their music on them and not ruin it with DRM then you'd see a rise in people paying for music. Until then we're stuck with p2p, which has been here since before computers and isn't going away now. Even if we had to resort back to the equiv of copying tapes for people..thats what people will do.
  • by Crizp ( 216129 ) <> on Monday February 26, 2007 @04:21PM (#18157838) Homepage

    When asshat companies like Maxis are still requiring the CD to be present for The Sims to run (in this age of half-TB drives), they can kiss my ass -- I'll go download the version with the No-CD crack.

    ...after you've bought the game? Why not just download the crack and apply it to your legal, installed version, saving some bandwith and waiting? ;)

  • by GiMP ( 10923 ) on Monday February 26, 2007 @05:10PM (#18158536)
    I know I'm preaching to the choir, but... what I don't understand, is why EMI hasn't yet figured out how that DRM costs them money?

    I went into a CD store recently, saw a number of alums for sale by EMI, considered buying them, but saw the largely-printed "DRM" warning. Perhaps I'm unusual, but this prevented me from buying a single one of those albums. If not for the DRM, I would've bought one of the albums, and I would have likely purchased the others over time. Over the last few years, I've probably spent few hundred at AllOfMp3. Why? Because I could buy the music I wanted, not only at the price I wanted, but in the format I wanted.

    Does the music industry really think if people didn't want CDs, that they would've switched from cassettes and vinyl? Of course people switched, because they WANTED compact-discs, there was an advantage. Does EMI think that if the masses wanted CDs and they only sold cassettes, that anyone would continue to buy EMI's music? Likely, the masses would just put their money elsewhere. Customers buy what they want, remember: "The customer is always right." As long as the layman wants MP3 files, and the audiophiles want FLAC files, DRM will not sell. If music is only available underneath DRM, then music will not sell.

    I only assume that EMI believes that stopping DRM will stop illegal downloads, and the revenue gained by recouping the "losses" of illegal downloads will outweigh the losses that they now incur due to DRM. However, I believe that of those illegally downloading, there are the following groups:
      1. People that would purchase the product if there was no DRM, but download illegally instead.
      2. People that won't pay regardless.
      3. People that use illegal downloads as time-shifted radio, driving sales.

    Based on this list, I can only see DRM hurting EMI. Group #2 won't pay regardless, and they're driving away users from groups #1 and #3. Thus, their DRM is only removing a significant number of potential customers. There is NO advantage to EMI to continue pushing DRM.

Money is better than poverty, if only for financial reasons.