Seeing the light on DRM
p2pnet.net news special:- While much of the northern hemisphere has been experiencing heretofore unseen spring-like weather conditions in January, disrupting the hibernation and mating habits of many of the world’s animals, a group of snakes and other cold blooded, skin-shedding reptiles and amphibians have gathered in the warm sunshine of southern France for the 41st annual MIDEM conference of, “nearly 10,000 international music (labels, publishers, artist managers and many more), digital and mobile professionals gather to do business”.
Besides the usual back-slapping, self-congratulatory butt kissing on how well the industry is doing – and they are doing well despite a reported decline in CD sales (Digital music sales soar 80 percent in 2006 ) – there’s an unexpected and welcome turn of events, that of the major players finally starting to see the light on DRM and file-sharing: DRM is bad, very bad. Files-sharing is good, very good. DRM inhibits sales, industry growth and artistic endeavours, while file-sharing promotes artists for free, jump-starts careers, and increases sales of CDs. The market dictates what works, not the marketers.
At least one of the four major labels is expected to begin sales of unrestricted MP3s this year, something the major players had previously vowed they’d never do, capitulating to the demands of the customer “which has destroyed their monopoly over the worldwide distribution of music in the past decade and allowed file-sharing to take its place”. Independent labels and artists are way ahead of the majors in this respect, having listened to consumers and been offering their works in this way for years, often for free, and have reaped the benefits the majors have denied existed.
“Free is the new paid,” said Kenneth Parks, chief operating officer of Brilliant Technologies, a company based in New York and Melbourne that is developing a service called Qtrax, which will provide free music – legally – to Internet users.
“We could release our products without digital-rights management restrictions on them in the way that consumers want and still make a lot of money,” Gary Shapiro, president of the Consumer Electronics Association, said at Midem. “And I think we’ll be hearing more and more about that.”
But Mitch Bainwol, chairman of the Recording Industry Association of America, says, “We’re for interoperability, and there’s nothing intrinsic to DRM that prevents interoperability.”
Tell that to Apple, which has dominated online music purchases for years, incorporating their own brand of DRM into every download, which can then only be played on an iPod. Apple, which sells works by RIAA artists, doesn’t seem to share Bainwol’s ‘enthusiasm’ for interoperability.
That could change sooner than Steve Jobs might like, especially if French lawmakers have their way. In recent years, France has been in the forefront of protecting consumers’ rights, including forming a commission to oversee measures to force interoperability, stifling DRM, and protecting file-sharers from illegal prying eyes.
Italy has also declared that file-sharing is not illegal, stating downloading computer files containing films, music or software isn’t a crime if not done for profit. The top criminal court’s ruling throws out convictions of two former students who had set up a p2p network in 1994, and undoubtedly will pave the way for more quashed convictions and the refusal of courts to hear file-sharing cases brought by the cartels.
Economists such as Jacques Attali, a French author and music aficionado, understand that the market decides what restrictions it will accept, and what it won’t. Attali predicts the current business models employed by the cartels will be discarded and all recorded music will be free in the next several decades, reflecting the old radio model: free online music supported by advertising.
“A lot of people will still make money out of it,” he said during an interview at Midem.
Ad-supported, DRM-free file-sharing and download services are now being seriously considered by the major cartel members.
With companies such as EMI offering free streaming music on Baidu.com in China; VirginMega and FNAC selling DRM-free tracks from indie labels; Yahoo! continuing their ‘experiments’ in offering DRM-free tracks from selected artists; and, Amazon.com planning a DRM-free download service, the industry has finally smelled the coffee and opened their eyes and ears to what file-sharers and consumers have been saying and demanding for years.
“It will happen between next year and five years from now, but it is more likely to be in one to two years,” said Rob Glaser, chief executive of RealNetworks. “DRM-free purchases is an idea in ascendance and whose time has come.”
And, DRM is a “pain in the neck” for consumers, says Julian Ulrich, general manager of VirginMega.
As the winter of 2006-2007 has been a mild one, in most of the world the mildest in recorded history, it would seem the music industry has got the jump on famed groundhog Punxsutawney Phil, coming out of hibernation several weeks early and declaring an end to the icy chill of DRM Winters and the start of free, unrestricted entertainment and information Springs and Summers.
Free file-sharing networks will never go away, but perhaps the cartels are finally admitting that you can’t sue their customers into buying ‘product’, and that DRM was a bad idea, poorly conceived and implemented, largely despised by consumers and retailers, and that the physical and virtual marketplace can support all types of content distribution, and still earn them a pretty penny.
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January 25th, 2007 at 2:53 am
…and that is that this model implies that all legal P2P services will consist of one network and one client.
I don’t like this idea. The multitude of networks and clients, many of which are now free rather than proprietary, have really paved the way for P2P innovation. This model, although pleasing for most, will most likely consist of either setting up or choosing an “official” network where such actions would take place, choosing only one client to connect to that network, and persecuting all other clients and networks, including all clients that reverse-engineer that new proprietary network in order to bypass ads. Although the ad model seems like a good idea, let’s not forget how the early proprietary clients used adware to an extreme, which in turn spurred national attention to the spyware epidemic and led to the creation of free networks and clients. Closing P2P would not only destroy all of the progress that these innovations brought, but would also cause a monopoly in the P2P market.
A mandatory “tax” on monthly payments for Internet usage would solve this problem, as compensation would occur regardless of which network or client the users choose. The only downside is that users who might not ever use P2P would still have to pay this service, but I believe that this is better for the P2P market than closing off all other networks and clients.