“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!
About the Author: Shelly Palmer is Managing Director of Advanced Media Ventures Group LLC and the author of Television Disrupted: The Transition from Network to Networked TV (2006, Focal Press). Shelly is also the 1st vice president of the National Academy of Television Arts & Sciences, NY and Chairman of the Advanced Media Committee of the Emmy Awards. You can read Shelly’s blog at http://www.emmyadvancedmedia.com. Shelly can be reached at shelly@palmer.net.
