You Won't Own EMI's DRM-Free Music!

Can recorded music sales get much worse? The simple answer is, yes they can -- and they will.
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"EMI is taking the next big step forward in the digital music
revolution. This is something that will become very popular" said
Apple's CEO, Steve Jobs. He was referring, of course, to the fact
that Apple and EMI are going to start selling DRM-free music (no copy
protection) through the iTunes Music Store. The tracks are going to
be higher quality and cost $1.29 (as opposed to $.99 for their lower-
quality DRM-encumbered counterparts).

Wow! A recorded music company is going to start selling a digital
music product that an average 11 year-old can get for free or from
friends. Is this news? Did EMI miss the part where 95+ percent of
music found online is already free and already higher quality than
you can buy from Apple? Is there any song you might want that you
can't find as a free download in under 15 seconds? Hey everybody!
It's April 2007 -- this ship has sailed!

So what's in it for Apple? Will iPod sales go up? iPods already play
unprotected .mp3 files and iTunes can already organize
everything ... even the stuff you pirate. It's the other hardware in
the world that can't play Apple DRM-encoded files.

Your next question has to be, "Will this help or hurt the recorded
music sales?" The cheeky answer is the punch-line to the old chicken
soup gag, "...it may not help, but it couldn't hurt." Can recorded
music sales get much worse? The simple answer is, yes they can -- and
they will. Like I said, this is not news. If you want high
quality .mp3 files of a song, search the title online or rip it from
a friend's CD. If you want a real doom and gloom scenario, take the
number of households with broadband connections, the fact that
computer and hard drive prices are in a freefall add the popularity
of social networks and plot them against the highest quintile of
music consumers. The resulting business forecast will make you very,
very sad.

Is there any reason you should care about this announcement? I don't
think so. If an iTunes customer has a choice between purchasing the
same song with DRM and without DRM why they wouldn't drop the
additional 30 cents and have the convenience of moving it easily from
device to device. Will consumers understand the value proposition of
DRM-free? Bottom line -- it's nice to have, but I don't see it
impacting the idea that people with more time than money pirate songs
and people with more money than time pay for convenience. The price
points are just too close to each other. And for album purchases
there is no difference at all.

Kudos to EMI for trying something new. I would love to care about
this issue and I would love for EMI's sales data to prove that this
mattered at all. Not for a short-term bump, but as an important
change in the value chain of the music business. I don't have high
hopes.

What the industry really needs is legal ways for consumers to pay for
music that is owned by others that they use in their user-generated
content, mash-ups and uploaded videos. We need a fully automated
version of the Harry Fox Agency (for mechanical rights), check boxes
on iTunes and other online music stores that let us pay for other
rights (like sync rights, source licenses for public performance,
parody and master rights) that most people don't even know to ask
about. We need education for music consumers about the value chain
and we need it simplified. There are dozens of rights associated with
each piece of music and there can be dozens of rights holders to
negotiate with. Most people can't articulate these rights, how can we
blame them for not paying. There's no easy way to do it.

DRM free does not mean free to use. It means free of copy protection
and usage tracking. The biggest result of this announcement may be
that people believe that for another 30 cents they actually own the
music -- which they absolutely will not. Talk about the law of
unintended consequences!

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