p2pnet - rss feed: DRM becomes the ‘D’ Word
p2pnet.net news:- I listened to the live stream of the Apple/EMI news conference this morning from London.
The good news:
* Apple will be providing the option of premium priced EMI material DRM free and at double the bit rate for higher quality - 256 kbps AAC encoding.
* Any tunes already bought from iTunes can be upgraded for USD $0.30.
* Steve Jobs hopes that other majors will soon follow suit.
The bad news:
* The bad news is that these premium singles will cost 30% more.
I don’t know how many times I heard Jobs and EMI Group CEO Eric Nicoli refer to ‘DRM Free’ music. It seems that DRM is becoming the ‘D’ word - even in the highest corporate musical circles.
Interestingly, Jobs himself kept repeating that DRMs can already be stripped form iTunes songs by making a CD copy - which lots of folks know. This is a ‘hassle’ as he calls it - but not an insurmountable one. It will disappear now - but for a price.
Jobs also explicitly mentioned the SONY root kit episode as an example of how DRM doesn’t work.
Nicoli conceded that file sharing might become easier now. The implication here is that any losses due to increased private copying due to file sharing will be more than capitalized into the purchase price of the download. It will, of course, be difficult to separate out what relative premium consumers notionally allocate to the two improvements - i.e. ‘DRM free’, and higher fidelity. It remains to be seen what the take up will be.
All of this goes against the suggestion by Sandy Pearlman and others of lowering the price to a nickel or some other attractive price point and thereby increasing unit quantity sold by a far greater factor than the lowering of the price - in other words far greater revenue for the record companies and artists. Remember, the marginal cost of delivering a tune online is or will be very close to zero. Many of the costs associated with traditional sales of vinyl and CDs have simply vanished - i.e. manufacturing, distribution, shipping, inventory, accounting, etc. Consumers have yet to see this dividend.
So greater revenues = greater profits. In direct proportion. It could be that simple.
It’s Economics 100 time.
At the right price point and with friendly online music stores, unauthorized downloading and file sharing would all but disappear - and all without the need for increasingly draconian, technologically harmful and interventionist copyright laws.
So - today’s announcement might be seen as the right move technologically but in the wrong direction on cost. Hopefully, the latter will get corrected before it’s too late.
And where are the Beatles? Both Jobs and Nicoli said they too wanted to know.
And therein lies much of the problem in the music industry today - at least to this old curmudgeon’s ears. We have nobody of the quality of the Beatles, Elvis, or Frank Sinatra - or even the Stones or early Michael Jackson - who can sell multi-platinum simply by virtue of compelling quality.
The majors are left with a few vaguely OK current ’stars’ that offer passing entertainment, lots of ambition, and ‘MUCH’ mediocrity. And it does take a lot of marketing hype to convince lots of people to pay for this music. But there is not a lot of music that people really want to buy in great quantities just because it’s irresistibly great music that crosses over a vast range of categories.
There’s also the matter of intense competition with other new forms of entertainment, including video games, DVDs, etc., etc. that drain budgets very quickly.
One thing ought to be clear, if anything. Suing customers into submission mostly certainly isn’t the answer. It’ll be interesting to see if EMI achieves enlightenment on that front.
Howard Knopf - Excess Copyright
[Knopf is an Ottawa-based copyright lawyer who’s been lead counsel on legal challenges both at the Copyright Board and in the Courts against the excesses of the music industry establishment. He’s regularly quoted in the mainstream media and acted against the CRIA in the file sharing litigation, and continues to act against the CPCC, in which the CRIA is still a major stakeholder, on the levy front.]
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April 2nd, 2007 at 3:24 pm
If EMI wants to sell music without DRM why not just cut out Apple and sell .MP3s, .FLACs, and .OGGs on their own website?
This is a step in the right direction, though.
By the way, what other players besides an IPOD will play a file directly in an AAC format without transcoding?
April 2nd, 2007 at 6:12 pm
not sure but transcoding is a lot easier than removing drm…
April 2nd, 2007 at 7:48 pm
What they don’t want to hear is that the DRM makes the offer useless. That’s why no one is hitting the iTunes in major amounts. They also don’t want to hear that it is over priced at the old price of 99¢. Raising the price won’t bring flocks more people to buy. With the low quality bit rate these offerings are in, they still aren’t worth the 99¢ price much less a higher price.
The days of hits in the Top 10 staying for months at a time are over. There are no great crossover artists putting out great tunes across the whole cd. So no one is buying cds for the most part, seeing the cost as rather expensive considering all the filler stuffed in. Much to the chargin of the cartels, people are saying so with their wallets when they do buy. The old model is broken. Charging more for less isn’t going to work either. Until they get the message they will continue to go downhill.
Wonder if they feel their imminent doom coming?
April 3rd, 2007 at 12:12 am
You are correct. The rising price is just a vain attempt to offset the basic law of diminishing returns. Any increase in price in an attempt to gain back money loss will only lead to greater money losses. These pin-striped shiny suits at the RIAA are all MBA’s…that is, Master’s of Business Atrocities. Their degrees are better for squeezing than Charmin’s…but for some reason smell worse before they’re used.
April 3rd, 2007 at 3:19 am
Transcoding in this particular case means converting from one audio format to another. Since we would likely be dealing with lossy formats (for example aac to mp3) there would be a further reduction in quality , first from the compression to aac then further loss caused by compressing to mp3. It only gets worse from there. The only way to avoid this is to use no compression or lossless compression.
http://en.wikipedia.org/wiki/Transcoding
http://www.google.com/search?hl=en&q=transcoding&btnG=Google+Search
Interesting history:
Back in the early 90s the effects of transcoding killed minidisk and DCC. DCC stayed dead, but minidisk just kind of migrated into a niche market. Guess nobody wanted to pay $700 for cassette quality back then. There was a time when you could go into a “record store” and buy prerecorded DCCs and minidisks as well as CDs (but not records). That shows they marketed these formats directly to consumers, not just professionals. CD-R was very expensive and ultra-new back then too.
http://en.wikipedia.org/wiki/Digital_Compact_Cassette
You just wait until sales of lossy compressed tracks flatten out. They’ll start pushing lossless and wanting you to repurchase your music AGAIN. Let’s just demand lossless NOW, download it ONCE, and be done with it forever.
April 3rd, 2007 at 9:35 am
Customers who have already purchased EMI tracks will only pay the 30₵ difference. It’s not like they have to pay full price for the same thing.
The Zune plays AAC, although in my opinion you’d have to be pretty stupid to purchase a Zune. All the other manufacturers could easily send AAC support for customers’ existing players through a firmware update (and I imagine they will, given Microsoft’s stab in the back with the Zune Marketplace). The player is not inherently limited to a particular format; it’s up to whether the firmware supports it, just like a computer can play any format with the right software. If not supported through official firmware, free/open source firmware can always be written for a player to achieve this. Rockbox, for example, allows all iPods to play Vorbis and FLAC formats (as well as Theora with the video models). The vast majority of iPod users use Windows, and already have to reformat their HFS+-preformatted iPods to FAT32. If iPod customers are willing to put up with this, I don’t see why everybody else won’t be.
April 3rd, 2007 at 10:35 am
“And where are the Beatles?” Much as I loath big music I think the lack of some big names in online music catalogs may not be directly due to the recording industry. I think the artists are refusing to have their music released digitally. One reason, is I believe they get less money per song than they do from CD sales. (note earlier where I say “directly”). Another issue may be unreasonable fear of piracy(Sorry Paul, all your stuff is already on p2p). I think if the music industry(fat chance) would up the per song % paid to musicians for digital sales and artist would deal with reality(your stuff is going to get pirated) you would see more big names on ITunes. Is this likely to happen? Don’t hold your breath.
July 4th, 2007 at 10:40 pm
It’s very difficult to believe what record company executives tell us these days. I read a story just today about Prince’s attempt to give an album away for free through a London paper. At least one executive was quoted as saying that this act was unforgivable and would result in Prince being essentially blackballed from working with any production company in the future. This means that the unremitting greed in the industry cannot even abide an artist who is willing to give out free music – it isn’t the artists who are dictating these higher prices. It is the record companies themselves. Your point about the basic distribution costs for the companies rapidly approaching zero is but another example of this same kind of greed. Until more artists decide to boycott the current systems will change happen, and I’m not sure if any such migration is possible, at least in the near future.
July 25th, 2007 at 4:04 am
Interesting topic. Are you aware that stores users’ names and emails in its DRM-free music offered through iTunes? Why? Apple refrains from making any comment. I thought it was a good news when Apple removes any copyright protection on music, allowing users to playback music on virtually any device if they purchase the the more expensive DRM-free version of the song. But why is there a need for Apple to include the information with each song?
January 17th, 2008 at 9:40 am
There are no great crossover artists putting out great tunes across the whole cd. So no one is buying cds for the most part, seeing the cost as rather expensive considering all the filler stuffed in. Much to the chargin of the cartels, people are saying so with their wallets when they do buy. The old model is broken.