RSSJupiter Analyst: Interoperable DRM Won't Solve Music Industry Dilemma
By Scott M. Fulton, III | Published February 16, 2007, 5:58 PM
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Scott Fulton, BetaNews: The IFPI seems to be backing the Coral Consortium as a way of at least going forth, however slowly, with a single industry standard a la OMA. But the IFPI claims to represent the same people your study surveyed, and yet it appears the people in your survey are saying, "Yea, but..."
Mark Mulligan, JupiterResearch: Absolutely, and I think that's one of the things that's really clear from here: There's a really strong division of thought within the record labels themselves. For example, we looked at how the responses differed within each record label. Those are really significant variations. What that reflects is, the music market is bang in the middle of a very fast period of change, that is intensified by the fact that music revenues are declining, and therefore record labels are having to basically consider options that they've never been willing to consider before in order to try to turn around the decline in music sales. What that means is, sometimes decisions are made so quickly, it's before there has been unity within the label in terms of their position on certain issues.
As [evidence] of that, the day before Universal Music struck its deal with YouTube, one of the senior Universal Music executives went on record saying that he thought YouTube should be sued for infringement of copyright. And then the next day, the deal was struck. That gives you a sort of illustration of how much difference of opinion there is within record labels, let alone within the overall industry.
Scott Fulton: The CEO of Wurld Media, Greg Kerber, who runs the P2P service Peer Impact, frequently tells me that in the end, the record labels with whom he deals come to the conclusion that DRM is necessary because it's the only structural software you can provide which gives a latticework for online music operations to develop a business model for subscriptions, for downloading, for limiting terms of use. This implies that the Steve Jobs solution from last week - kicking all DRM aside - would eliminate that latticework, and not give the labels anything with which to structure a business model around.
Mark Mulligan: Three things I'd say to that: First of all, anything that happens with DRM now is not suddenly going to drive adoption of digital music. Interoperability issues are not holding back music adoption at the moment. It's simply not a consumer issue; despite that a lot of consumer groups have taken action, it's not consumers who are driving it. The very simple reason that isn't happening is because there's little or no reason for an iPod owner to want to buy music from anywhere else but from the iTunes music store.
It's not a consumer issue, but it will be sometime in the future, should an "iPod killer" arrive and give lots of people reason enough to want to have a device that isn't an iPod.
In terms of moving away from DRM, one side of the argument is that, until very recently, that's how the entire music industry worked. Vinyl, tape, CD - none of those had rights management on them. Home copying has been around for ages. Once the music industry lost its fight to stop having recordable cassette decks in in-home stereos, ever since then, the music industry has known and accepted that home taping is part of music consumption. People recording from the radio is part of music consumption. All of those things didn't stop the music industry having its strongest-ever decade of sales.
So you can make an argument that, well, selling online without any DRM at all would just be doing the same as selling a CD. But the difference with selling a CD is that the music industry is basically saying, "We trust you with this purchase. We know you're probably going to do a few things we'd rather you didn't," because in Europe, unlike the US, we don't have Fair Use, so it's not actually legal to be able to make a copy for your car or for your living room. "We trust you, but we accept the fact that you are going to go away and do some of the things you shouldn't do."
With digital rights management and digital downloading, it's actually a completely different ideological perspective. It's saying, "We don't trust you. However trustworthy you might be, we are not going to trust you. We are going to tell you very clearly what you can and can't do." There's a very different approach. It seems like digital rights management should be an absolutely fundamental part of the digital music market, but it's actually quite an alien concept in terms of overall music. You've seen how much backlash there has been from consumers, as those record labels have tried to introduce digital rights management onto CDs themselves. You've seen a massive backlash and move away from that.
But the final thing I'll say is: Jupiter isn't advocating a complete move away from digital rights management, but instead, an evolution of digital rights management to do exactly that: Rights management, not rights protection. There's many ways in which digital rights management can be used to manage and develop distribution of music, that enables it to a) give music fans the ability to do what they want with their music within reasonable bounds, and then b) develop and generate extra revenue on anything that happens beyond that. So for example, you can have music downloads that you buy once, you can burn onto CDs as many times as you like, you can put onto any of your registered devices. You could even send it to a friend, but if a friend tried to play it more than two or three times, then they have to pay for it. Those are sorts of examples of how digital rights management could be used in a creative way, that isn't just about restricting what people do.
Scott Fulton: Well, if Jupiter is, as you say, advocating more of the evolution of DRM, isn't that evolution only possible when the industry collaborates and agrees to a common platform?
Mark Mulligan: Not necessarily. What's fairly unique about the online music market is, with the concentration of so much important content within the major record labels, they are the gatekeepers. They have the ability to be able to dictate and shape what usage patterns the stores like Apple's iTunes can do with the music. That's how digital rights management came around in the first place.
Now, the record labels - should they want to - could say, "We will only license it to you on the following terms and conditions..." It can be actually implemented from the content providers themselves. And that is a very clean way of doing it, that doesn't require Apple being taken to court, it doesn't require some complex interoperable standards being developed.
What happened last time the record labels tried to stand up to Apple - about 10 months ago, with the negotiations about having variable pricing - they actually backed down and lost the negotiation against Apple. I think they learned a lesson that time, and there's a definite consensus that Apple's negotiated position is too strong, and the next time around that licenses are offered for negotiation, the record labels will take a much stronger stance. I would say that that's absolutely right, because however much Apple may be an important part of a digital music market, digital music itself is actually a really small part of the overall music market at the moment. You're talking just a few percentage points of total music sales. So that [could be the industry's tack] right now, to potentially aggravate one of the key partners, rather than setting in stone some usage patterns which are going to permanently inhibit the total potential of the online music market.
Next: Would an "iPod killer" change the public's mood toward DRM?
Words from the article.
"Vinyl, tape, CD - none of those had rights management on them. Home copying has been around for ages. Once the music industry lost its fight to stop having recordable cassette decks in in-home stereos, ever since then, the music industry has known and accepted that home taping is part of music consumption. People recording from the radio is part of music consumption. All of those things didn't stop the music industry having its strongest-ever decade of sales."
After that, corporations took over, cutting out the real musicians, replacing them with models. Quick turn over, very little investment, lots of return. That's the dilemma, popular music sucks. The music video culture, or vidiots, dancing around, selling soft drinks isn't my idea of music. It's Donny Osmond meets Micheal Jackson over and over again to that of beyond redundancy.
I despise the media industry with a passion. There's so many flakes and jail birds getting filthy rich off our teenage population it's disgusting. DRM is like gift wrapping garbage. Yeah, I'm old, so sue me. DRM+Jupiter, good combination.
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|So one day the old media companies are suing teenagers for having mp3 files in their shared folder, and the next day they are grea$ing up radio program directors to play the their music on free broadcasts.
Maybe it's not about the copying at all, maybe it's about controling popular culture.
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|Impersonal DRM, if it is coupled with lossless formats and if it is 'unobtrusive' is fine.
If you are asking, do I "like" it, the answer is no. But I understand the need for owners of digital property to establish usage standards to which each of us have a choice of accepting when we buy it (or not).
But the notion that our useage habits be tied to a personal data base that identifies what I buy, listen to, etc.etc.etc. is, with all due respect, crazy! We are already headed there already with the tracking of electronic 'money' and the potential for tracking each piece of paper money.
And if you are looking for an unobtrusive system that people might voluntarily adopt and cooperate with, such a system is NOT it!
I would be in the actively anti-DRM camp if only to prevent my personal information from being tracked - and I wouldn't care about the silly MP3 file!
But I am not prepared to surrender my right to anonymity. And I know that NO ONE would EVER misuse it! (Yeah!)
Neo, you almost sound like you are from the UK! As they are much further along that road.
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|While I don't believe in current DRM technology, I do agree that something has to be put in place to protect digital products. You don't walk into a store and walk out with a product you haven't paid for without some kind of bad consequence. Human beings unfortunately are opportunistic and some to the maximum degree. Some people have absolutely no problem whatsoever taking into possesion an item that they havent paid for....I'm 100% sure that absolutely no DRM will open the doors to thieves and leeches. And some hide behind the term "sharing"....Sharing is a black and white term, it's not grey. Here's a single definition for 'sharing' - "the full or proper portion or part allotted or belonging to or contributed or owed by an individual or group" - plainly put, since even though we buy music/movies/intellectual property in general; we don't own it. We purchase the right to listen to it but we don't own it, as far as sharing goes we can allow other people to listen to it through us, but we CANNOT/SHOULD NOT give it to someone else like a piece of food, it's not right. When you give away a 1/2 of an apple, we lose a half. When you give away an mp3 but keep a copy, we lose nothing. Now if you gave an mp3 away and lost it, I would consider that a fair trade. Anyway getting back on track....I think there is a need for SOME sort of protection because some people have no conscience, or at least bury it. Just like you have doors and alarms and car and house keys to protect these possessions, there needs to be some sort of digital protection. Therefore, I think an open drm standard would work IF they could figure all the kinks out. Attach digital purchases to people's SS# or some people id (Tax registration number, social security, etc)....noone is willing to give out their SS# publicly, so that would probably stop rampant piracy dead in it's tracks. Ofcourse the hackers would crack away, but who cares. What you want is the ease taken out of 'general' piracy, people who do it because they can and it's easy...mom's, dad's, friends who simply copy CDs etc., but put into customer activities with these files.
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|I am not against DRM, I am only against people like Steve Jobs who claim they are against it, when it has made them millions of dollars.
If iTunes wanted they could allow you to have unlimited amount of devices to access the material you purchase, perhaps not unlimited, at the very least more then 5 devices.
Just think about my statement, if you were allowed to place the products you purchase on any device, what would the harm be, as long as you had to perhaps approve said placement of the device.
Perhaps the term unlimited is an extreme, since people would abuse that, although I suppose if they made it where if there so many devices past a certain point it would lock you from adding new devices. I do think it should be more then 5, or at least develop software that could be portable that would allow you to place said products on other devices then be able to remove them easily when your done.
At this time iTunes is much to heavy to do something like that. I also don't have an iPod so that functionality does me no good.
Really I see no problem with DRM I purchase everything I use, so its not a problem to me. I do feel you should be able to download the product as much as you want, I mean you did purchase the "right" to view it.
Music Industry is so freacking whacked, due to special interest groups that try to protect the rights of the music companies its not even funny, and it has nothing to do with the people that makes those companies millions and millions of dollars because they are able to write and bring us customers what we like.
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|Wow, you need to do some research before you look stupid AGAIN...
Steve Jobs was FORCED into using the "Big 4's" DRM scheme if he wanted to sell their music.
DO YOUR RESEARCH BEFORE YOU POST IGNORANT COMMENTS!
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|And the Big 4 FORCED poor ol Steve into entering the market and making big bucks!
Pooooooor Steve!!!!
But gee, if they didn't have to deal with competing incompatible DRM formats, one player could potentially address the ENTIRE market, instead of only portions of it!!
And then poooooor Steve could potentially "be forced" into controlling even more of it!
Don't you just hate it when they FORCE someone to expand their business in order to enter into a market?
Ignorance? Unfortunately that is one commodity that is present in spades!
ROFLMAO!
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|I'm going to keep my comments to DRM and music, as opposed to where some of the other commentaries have drifted towards.
Music has been, for close to 60+ years now viewed as something you purchase. When you bought a record, a cassette tape, or a CD, you were buying a physical product that was yours to do with whatever you wished. The idea that you were not buying the music itself only recently became the prevailing thought pattern when digital came into the picture.
In today's groupthink within the record industry, you no longer buy a physical product (even a CD) but rather a license to play the product. This goes counter to the way that we as consumers have believed. So when you purchase that CD, you don't have any rights to the music that comes along with it. It still belongs to the record companies who can and do dictate what you can do with it and how it can be played. DRM provides the industry some measure of control, but it's control at the expense of alienating your customer base who have been copying music since the first portable tape players existed.
Now, if the industry came up with a common system to protect their product while at the same time allowing the consumer the right to be able to make copies *as they have been since those early days* then it's possible for a compromise. But as long as the industry treats the consumer as the enemy, then we will continue to treat the industry with the lack of respect that they give us.
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|I hope none of these folks discoverers that basic file and data encryption is a form of DRM.
Nope, wouldn't want to employ anything exotic such as that!
Besides, no one cares if their personal data or credit card information is compromised. The lack of any form of DRM is more important than secure data.
Well, except when it affects someone accessing 'your' information, and so long as it doesn't stop 'you' from accessing someone else's information!
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|DRM is doomed to fail as well because the first time it misbehaves (and it will,) or locks down a system with some critical data on it, that system will be abandoned.
Which is why I'm so surprised at Vista and Windows Server's success. DOn't admins realize that they are headed down a very scary path of Microsoft controls your data?
Oh well. It'll be fun to watch.
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|(sigh) Microsoft doesn't control your data, mjm, because it's not their DRM.
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|Why I don't like DRM:
1. Many viruses have better interoperability than the DRM programs (if you can call them that) do.
2. Internet makes any software countermeasures completely useless--one hacker hacks it, and everyone in the world can bypass it.
3. It's a waste of time, resources, and technology to build the ultimate DRM that is cracked withen days.
4. Interferes too much with operation of the computer EVEN WHEN IT WORKS AS DESIGNED (cpu utilisation, resources, etc. Reminds me of ScamWare: the programmers obviously don't give a rat's a** about code optimisation!)
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