DRM and iPod Success
I just read an interesting Reuter’s article suggesting that DRM is responsible for what is referred to as Apple’s stranglehold on the digital music industry. According to the author, some competing music services are blaming DRM and the labels for their inability to do as well as Apple.
eMusic is pointed to as an example to prove their point. The only digital music site with more downloads than eMusic is iTMS. eMusic offers completely unprotected MP3s, and digital music sources claim that this is the reason it is as successful as it is.
Of course, anybody who follows DRM issues knows that there is controversy having nothing to do with the success of the iPod. Many people feel that DRM doesn’t protect the artist at all. Some would suggest that DRM is just another way to protect the labels.
Record labels, of course, are for-profit organizations. I’m not a fan of DRM (who is?), but I’m not surprised that record companies want to protect their sales. Apple and other companies do the same.
Yet when it comes to DRM, the writer makes a good point about the lack of protection that DRM offers artists and labels. It isn’t all that difficult to work around for the average user. For those who enjoy the challenge, every DRM offered has been hacked.
David Goldberg of Yahoo! Music states that digital sales of legal downloads have remained flat all year. In fact, after an all-time high at Christmas, average sales have slightly dipped. Goldberg blames DRM for this. He claims that DRM is keeping people from buying music legally.
The Reuter’s quotes Goldberg as saying that there has been no growth at all this year in the digital download industry. Numbers from SoundScan contradict this. Though weekly average sales may have slumped recently, individual track downloading has increased 72% and album sales have increased 115% during the last year. The only drop is in physical sales, which have decreased by 8.3%.
I suspect the iPod phenomenon has more to do with the design and marketing of iPod/iTMS than with the industry’s DRM requirement. Goldberg suggests that DRM is preventing some who download illegally from moving into legal downloads. Maybe he’s right. Then again, maybe there will always be a large number of consumers who refuse to pay anybody for music they can get for free. Fortunately, companies like Apple proved that people are willing to pay if the price is right and the download is relatively painless.
No matter how good the product, and with or without DRM, download sales will eventually stall. They have to. Nothing continues to grow forever. Digital download sales are currently in the millions every week. That seems like a pretty good number of sales to me.
If the industry is looking for ways to promote growth, offering more variety could be helpful. Everything doesn’t have to be commercial, especially when offering digital downloads is so inexpensive. eMusic.com doesn’t offer the major artists, but it still manages to thrive. This is good for the entire industry.
As reported here and other places, Yahoo! Music is offering limited DRM-free music. If DRM is the only thing standing in the way of increased digital downloads, this will be the beginning of gathering the information that can prove it. If DRM is the only reason people use iPods and iTMS, people should be flocking to Yahoo! Music to download their DRM-free offerings.
Like others, I’d like to see DRM go away. In the meantime, if the industry wants to increase sales, they should try promoting a wider variety of music.
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Comments
I agree, DRM is a straw man.
I am still waiting for a review of any competing MP3 player that says the whole package (consisting of player and compatible content management software/site) is hands-down, far and away, unequivocally better than the iPod-iTunes package.
Majority of iPod content is either illegal downloads or songs ripped by the owner’s own or shared CD collection mixed in with a few legal downloads from iTunes. So, DRM is not the reason for Apple’s success - great innovative players and iTunes software combo one-two punch is and will be for the forseeable future, brown Zune’s notwithstanding.
It isn’t all that difficult to work around for the average user. For those who enjoy the challenge, every DRM offered has been hacked.
And yet, a big criticism of the Zune is that its DRM is (inexplicably) incompatible with PFS, which will make it less attractive to those with PFS libraries of music or subscriptions.
But if DRM is a strawman and so easily circumvented, then this isn’t a legitimate criticsim. So is it, or isn’t it?
As for whether competitors are locked out, the surest way to tell will be if or when some competitor comes along and takes the market away from Apple, with a music store and DRM that are incompatible with the iPod. And if that store is owned by Microsoft, I’m sure you WON’T hear howls of protest from the Mac-bot community about it.
That depends on whether Microsoft forces vendors to make their music software/store the default in order to install Windows on it.
Of course we couldn’t possibly have a discussion without Beeblebrox trying to make it about why Apple fans are all Kool-Aid drinking myrmidons. Every single post!
DRM is designed to protect the interests of those who invest in the creation, promotion and distribution of music. Perhaps those cnsumers who prefer not to have DRM would prefer free music with ads?
</i>That depends on whether Microsoft forces vendors to make their music software/store the default in order to install Windows on it.</i>
Install Windows on what? We’re talking about a player and music store owned entirely by Microsoft, the way the iPod/iTunes integration is owned by Apple. There would be no other vendors.
Of course we couldn’t possibly have a discussion without Beeblebrox trying to make it about why Apple fans are all Kool-Aid drinking myrmidons. Every single post!
As I’ve stated repeatedly, nothing would make me happier than if you (among others) WEREN’T a Kool-aid drinking Mac-bot. It remains, however, an elusive dream.
I suspect the iPod phenomenon has more to do with the design and marketing of iPod/iTMS than with the industry’s DRM requirement. -Janet
I agree. Most iPod owners, including yours truly, do >90% of the storage capacity on non-DRM content. That is, content ripped from your CD collection and non-DRM’d downloads (audio/video netcasts). Apple claims the word “pod” so I will use Leo Laporte’s open-sourced version.
Apple, from the start, was reluctant to implement a DRM but the content owners (labels) insisted so we have FairPlay. I still think FP is more flexible than any of MS’s DRMs, PlayForSure for one is so strict and ridiculous that media using this DRM are now called exploding content.
The Zune uses a derivative but otherwise incompatible with the current WMP’s PlayForSure DRM. And therein the rub with MS’s tactics. Why another DRM? Why not a fairer version of FPS?
For those wanting to know, if you have a collection of PlayForSure content already, don’t expect to migrate those to the Zune despite what you’ve heard.
Unlike iTunes, the encryption keys are managed via the internet not locally handled in the file headers. The Zune’s decryption occurs in the player’s firmware not with the PC client. Both of these approaches differ from Apple’s approach which lets iTunes handle all the hard task of encryption/decryption even without net connections.
If Apple have a choice today, they would strip FairPlay from iTS. As for the “lock-in” it was a derivative causal effect of the DRM and I do not believe Apple had it in mind when the iPod was introduced in 2001.
DRM is designed to protect the interests of those who invest in the creation, promotion and distribution of music. -ss
I doubt that is entirely correct. DRM was pressed-on by the labels to protect their own interests and not the artists. If DRM is keeping sales flat as the article says, how is this in the best interest of either? Less unit sales = less revenue, period.
It is these content holders’ blind faith in encryption that makes them so greedy. They do not understand that if technology made it possible to encrypt, technology can decrypt (by means of greater collected intellect and sheer will of crackers).
It will take a long time for these greedy men to realize that DRM is not the answer. These men only listen to the sound of money (getting sucked in a vacuum of DRM, that is) and if we keep on getting our content someplace else, perhaps they will eventually listen.
Ah, Robo… The music labels ARE the ones who invest in the creation, promotion and distribution of music. Of course the artists do also, but without the work of the labels, many successful artists may still be unknown…
Why are they greedy? Because they market content developed by someone else? I am no apologist for the music companies, but illegal copying or downloading of music removes revenue from every point in the music distribution chain, including from the artist.
“If we keep getting our content somewhere else” - I guess you don’t mean on CD so, presumably, you mean illegally… What do you expect “the greedy men” to do? Abandon DRM altogether? To demand that all artists release their content in a form which is readily copied is akin to demanding that all commercial patents be disallowed…
The bottom line is that a piece of music does not belong to you - it remains the property of the artist and everyone else with an investment in the music. Just because it is easy to copy, it doesn’t mean you should…
Its easy to copy software too - do the anti-DRM agitators demand the right to acquire software for free? What about books and other intellectual property - should you be able to republish and distribute films, tv programmes, books and magazines? If not, then why music?
Why the big fuss about DRM? In the Apple iPod world it doesnt seem to impose any major dramas - you can still burn a CD of your downloads, listen to them on your Mac or PC as well as your iPod(s). What else (that would not deprive the copyright owners of income) do you want to do?
Is DRM really slowing down sales? Or is it just that legal downloads cost money - in other words, it is not the DRM which acts as the deterrent, but the cost? I suspect this is the true cause if sales are flatter than expected… If I am right, then freeing music from DRM will just result in a greater shift to illegal copying. And I am sure that is the view of the music labels.
The market is shifting away from live performances, tours and albums, to individual songs and downloads. DRM helps to sustain the current financial structure which sees huge investment by “the greedy men” in talented artists - leading to chart-topping hits. If DRM proves unsuccessful, then what? Without a return on their investment, the labels will not invest in promotion and marketing. So perhaps we will revert to unknown artists making their money on live appearances, and posting their songs on the net as free downloads merely to serve as advertising for their live shows…
Either that, or free music with ads…
Matey S^2…I will try to keep pace with your long , thoughtful counter-rebuttal, a piecemeal at a time. Here goes…
...but without the work of the labels, many successful artists may still be unknown… -ss
I agree that the labels spend a great deal of risk when marketing their newly discovered diamonds-in-the-roughs yet any form of business will incur great sums of dough anyhow. No biz is a sure thing. Does adding DRM to content make them so???
Say, I develop a product, a friggin’ expensive gizmo and to make my investment protected is to add some sort of a DRM? The content is the PRODUCT. Crappy products = Crappy results. It is no different for any product, SS. You know that. DRM will not make their product fly off shelves like getting a spray of pixy dust.
Therein the truth, ain’t it? These bastards think DRM is some kind of pixy dust that magically give them impressive returns-on-investments (ROI), even crapshoot stinkers galore.
“If we keep getting our content somewhere else” - I guess you don’t mean on CD so, presumably, you mean illegally… -ss
I never said that anywhere in my post, did I? I am not advocating or promoting illegal content sourcing.
What I want these “greedy men” to allow is to abide by the “Fair Use Principles” from the precedent of then Hollywood vs. Sony Betamax. From that court verdict, we, as consumers, were given the rights to use the content we purchase anyway and anyhow we want. We were also given the right to protect our investment in the form of transferring that content to another medium.
Why can’t these “greedy men” abide by that verdict handed to them by the courts? These blind men reasoned that since the content are now digital that, somehow, the content transcended to a level that no longer falls under the Fair Use Principle.
These content owners can lock these medias, for all I care, but they must respect my rights as a consumer. I want to be able to make a backup of my purchases, whether physical or digital download. I also want to be able to play that content on any of my media players whether they are all iPods or Sandisks or Creatives.
In short, for me to respect their current DRM methods, they must respect my F.U.P. rights as a consumer. Anything less than that is fair game, don’t you agree?
Is DRM really slowing down sales? Or is it just that legal downloads cost money - in other words, it is not the DRM which acts as the deterrent, but the cost? -ss
If the cost of $0.99 per track is so prohibitive then iTS have no future. That is what you’re saying? I myself do not download that much from iTS, not due to that wallet-walloping cost, but I don’t like the current DRM’s restrictions.
Yes, you can burn those to a CD and re-ripping those into a non-DRM’d version. Yes, it is easy as that, blah, blah, blah…But the point is, I did not spend that $0.99 so I can waste my valuable time so I can play the content to a media player of my choosing. Another, I paid for a content with certain quality, not a re-ripped de-valued version. Yes, I may not hear the difference for my hearing is no longer 20-20kHz, but that is not the point in this argument.
If DRM proves unsuccessful, then what? -ss
The labels (and artists) can live richly without all these DRM trickeries. Yes, there will always be those who sneak under the table for the crumbs no matter how inexpensive the content get. But those same people will, DRM or no. Law abiding netizens (the majority of us) will happily fork-over our $1 per track so long as we can do anything with that within our persons.
Remember, even with the ongoing cat-and-mouse DRM game, people will exercise their F.U.P. rights as bestowed upon them by the Supreme Court two decades ago. Do these “greedy men” think they can live above the law?
* I realize many of our readers are outside the jurisdiction of the US Supreme Court but I am sure your national assemly has ascertained similar doctrines for your people, so organizations like the RIAA and MPAA can’t shove DRM down your throats. -Robo
Hi Robo… I can see a robust discussion developing here… Please indulge me while i offer some further argument…
1. The key disagreement here seems to be that some of the anti-DRM lobby propose that unprotected music will not be illegally copied at any significant level, so the artists and the industry have nothing to fear. Yet it is quite clear that the artists and the industry are not at all convinced by this argument.
2. Fair use. You do have fair use. You can burn any of your music to a CD - at which point it is no longer protected by the DRM, so there is no need to re-rip it. If you have a non-iPod you can transfer a playlist to it and listen to it as often as you like. Or play your CD in the car, or on your PC or Mac. Or anyone else’s. You don’t have the right to further distribute this music - which would be quite UNFAIR to the artists and distributors.
3. I don’t think the industry believes that DRM is any sort of pixie dust. Or that it will make music sell better. I think they DO believe that DRM will reduce the level of copyright infringement which currently bedevils the industry.
4. You are being disingenuous… You do appear to be advocating illegal copying in your statement about obtaining music “somewhere else”. If the public did as you seem to advocate, and there was a substantial rise in the level of copyright infringement, then the industry would have to move to try to stem this. This is not being greedy - but simply preserving their investment and protecting their assets (the songs).
5. At even 99c per song, the cost of downloading a large selection of music soon adds up. I know many people who use free sharing sites to download free music in preference to buying songs from iTunes.
6. You are wrong about the legality of DRM in other jurisdictions. The only country in the world where Apple is having a problem with DRM is in Norway. And even there, the issue seems to have gone away.
7. Your downloaded music is already “denatured” by the conversion to mp3 or AAC. If you want CD quality, you have to buy a CD right now.
Now, my little challenge. You are now an exec at Acme music studios and you are meeting with a band that you wish to sign. Are you going to propose that their music be available on iTunes? Are you going to propose that a non-DRM version be made available on another download site? How will you answer the concerns of your band about copyright infringement? Knowing that if you do not, you will lose the band…
There is fierce competition in the music world. If the organisations involved in music publication and distribution really were being “greedy men” then it is likely that new, less greedy, competitors would be squeezing their profit margins by now. In any industry where there is high risk (and there is a great deal of risk in promoting new acts) there must be high profits. Or everyone goes bust…
Whatever annoyance you experience with DRM - no alternative to DRM will be acceptable unless it protects the rights of the artists and copyright holders as well as the music industry.
Finally, tell me, now that you understand that the quality of your music wont be reduced by burning to a CD and uploading to your Sandisk mp3 player - what is the exact nature of your beef with DRM?
Pre-digital music era, there was a natural barrier to copyright infringement on recorded music. I’ll call it the Pain-in-the-Ass factor: The inconvenience of manually playing the tracks on your LP and recording it with your cassette deck. Because of the time and labor intensity of this task, LP owners pretty much limited their reproductions to fair-use purposes.
The ideal DRM, (in terms of the best compromise between consumers’ fair-use rights and copyright owners’ intellectual property rights) is a DRM that approximates the Pain-in-the-Ass factor of the vinyl age.
Apple’s DRM is pretty close to striking the ideal compromise. You can do all the fair-use things that you want to do (make DRM-free back up copies for personal use) but it’s inconvenient enough to discourage people who want to do wholesale violation of copyright.
Most people aren’t bothered at all by the current state of DRM.
Whatever annoyance you experience with DRM - no alternative to DRM will be acceptable unless it protects the rights of the artists and copyright holders as well as the music industry. -ss
Thank you for the campfire lessons, SS, but I beg to differ from your above assesment of DRM. There can a be “fairer” form of DRM that respects the consumers F.U.P. rights to take that content to their persons.
I happen to believe that freeing DRM from content will not increase infringements significantly yet may actually decrease them. Casual infringers take the red-light district due to DRM and not cost. Only the minority of extremists will not be convinced either way. And that is a very small percentage of us law-abiding netizens, mind you.
In your counter-argument, you side with the labels that issuing content with onerous and unfair DRMs (PlayForSure is a good example) ensures that infringements becomes a thing of the past. Hello? Wake up! Has any form of DRM wilted the will of these infringers? Never in the history of tech that this problem has been conquered by a form of DRM.
So, as a publisher, you have to set aside some percentage of your possible sales to a loss figure - write-offs, etc.
It’s when the publishers start adding these outrageous DRMs that they are now acting that the majority of their loyal customers are now would-be pirates. Is this one way to treat your only source of the golden egg? I demand fair treatment and not be classified as one of them.
Last I read, these menace constitute a very small minority, but a thorn otherwise.
As for my personal gripes due to DRM, I happened to have downloaded several tracks from iTS when it was still in its infantile state (the first edition from its SoundJam MP incarnation). So, one day, I wanted to transfer those to my new Mac. They were able to propagate to the libray but all were unplayable and iTunes no longer recognizes my credentials. My old AOL and Apple usernames no longer valid. What the f——?!
I tried re-downloading them from iTS but iTS refused saying I have already downloaded them!!! What the f——?! They know its me and they know I paid for them. Why can’t I download again??? It is my right that they’re offending this time. I should be able to re-download any of my purchases at anytime, anywhere. It is my F.U.P. right to carry that content everywhere I wish so long as the copyright owner are respected - that is, I do not make it available for free.
I agree that FairPlay goes a long way to respect your F.U.P. rights but it can be much better. Just look at my limitations and certain restrictions with my legally purchased content above.
As for the ability to burn a CD from a downloaded 128kbps AAC, I admit it, I will not do it for I know it isn’t the same as lossless AAC. Apple should offer lossless AAC as an option when purchasing tracks at the same price. It is the same content so why should it be different?
As for the proverbial mega-band-to-be, if they had any biz instincts and common sense they would go DRM-free and be the trailblazers for others to follow. The reasons they will sign-up with DRM contracts are that their wits are poisoned with greed while they are holding the quill about to sign the golden contract. Greed makes men weak and evil…
Robo… We will have to agree to disagree… I cannot say why you had problems getting your downloaded tracks recognised on a new Mac (did you contact Apple for assistance?). Your assertion that removing DRM may actually decrease infringements is, of course, just supposition - such a belief, no matter how dearly held, is of no value if not based on thorough research.
“poisoned with greed”. Ahem. If you are a band, this is your business. Open source software is nice - but it doesnt mean that everyone who charges for their software development skills is “poisoned with greed”.
Fairplay gives you all the rights you need to enjoy your music. Call Apple, resolve your technical problems, and get over it…
We will have to agree to disagree… -ss
You know, SS, that’s the best darn advice I ever heard. After all, DRM = politics! And politics is pointless. Pick your side and go on with life. Same with DRM, I suppose.
G’day mate!