DRM-free music will hurt the iPod
By George Gardner
After much discussion with Apple over the past couple weeks, record label EMI said, starting this May, they will begin selling music without DRM piracy protection via the iTunes store. But is Apple actually in favor of DRM-free music on iTunes? I believe they are not. And strangely enough, DRM-free music could have adverse effects on Apple and the sales of the iPod.
I am a firm believer that Digital Rights Management (DRM) simply doesn’t work. Given that, I am also a strong supporter of what EMI is doing with online music downloads. These freedoms allow purchasers of online music to make multiple copies of their music (much like it would had they purchased a CD) which will most importantly allow the transfer of their songs from one device to another.
Perhaps the most logical thing I’ve heard from any record label was from EMI’s own Managing Director, Mohan Mahapatra, who said, “If you think you can steal music, you will steal it anyway. Even if it has DRM, you would crack it and steal it. So if you don’t want to steal it, you will buy it. So you might as well give the people who buy music legally a better proposition.”
Many music labels are restricting material that we have purchased, while the ones who pirate copyrighted material (those who actually justify the use of DRM) will do so in any case with DRM cracks.
To make matters worse, DRM is even forcing genuinely honest people to resort to illegal activities just to get their media on other portable devices.
Apple’s Steve Jobs talked previously about the disadvantages of DRM, stating he would surely switch to DRM free music in a heartbeat, if only the music labels would let him. The time has now come; the anti-DRM movement is starting to come to fruition, and it’s only a matter of time before other labels follow.
However, many seem to miss what DRM has done for Apple, the iPod, and iTunes. People are even willing to pay a premium cost to download music without restrictions, according to a recent poll on Pocket Lint. It may possibly be a good time for Apple to re-think their strategy.
Apple’s downloaded files come with restrictions on their use, enforced by FairPlay, Apple’s version of digital rights management. Of course, Apple’s format, AAC, combined with FairPlay-encoded files are not compatible with any music devices other than Apple’s media players.
By providing downloads without the anti-copying “digital-rights management” software, “we aim to address the lack of interoperability, which is frustrating for many music fans,” EMI CEO Eric Nicoli said.
‘Lack of interoperability’ meaning that iTunes purchased music will no longer be exclusive to the iPod, giving consumers the freedom to use ANY device they wish to play their media.
Jason Reindorp, head of marketing for iPod competitor, Zune, said this move ”does open things up a little bit. It potentially makes the competition more of a device-to-device or service-to-service basis, and will force the various services to really innovate.” As for Microsoft’s Zune, an EMI spokesman confirmed that negotiations with other platforms were still ongoing.
According to Boyd Peterson, an analyst at Yankee Group, the iTunes Music Store isn’t the moneymaker; it’s only used to sell iPods.
That method has worked quite well for Apple, with 48% of all Apple revenue being attributed to the iPod alone. But the times are changing, and giving users the freedom to choose any media player they want may prove to put a dent in the sales of the fastest selling music player in history. If anything, it will certainly open the door for 3rd party mobile media devices and other devices to gain popularity in the market.
So what will Apple ultimately do? Within the next couple years, they are likely to shift their attention from the iPod to iTunes; Apple’s innovative attention to detail, while creating a clean and simple user interface, has clearly made the iPod what it is today. But to keep “all things Apple”, they may be forced to overhaul the iTunes service.
Some have hinted towards iTunes adopting a subscription service, where members will pay a flat rate per month and have the ability to download anything and everything they wish.
A subscription-based model sounds good for the consumer, and possibly good for iTunes to keep their customers. But given the move toward DRM-free music, it would never stand a chance; subscribers would sign up for service, copy the entire list of music, and simply cancel their subscription the following day.
Adding more media has always proved a good approach for iTunes; the recently announced deal with MGM Studios to offer classic movies such as “Dances With Wolves” and “Rocky” has expanded the iTunes catalog to offer over 500 movies making it that much more ‘attractive’ over competitors.
But the real winner in this game will ultimately be the first service who adopts an across-the-board DRM-free music collection at a reasonable price.
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Stumble It!
April 15th, 2007
The “DRM doesn’t work” camp must be a collection of communist sympathizers or Econ 101 flunkies. I am so tired of hearing whining children say “DRM doesn’t work so get rid of it.” Well, they’re right about one thing, DRM in its current form doesn’t work, and that’s because there are several versions which aren’t hardware agnostic, i.e. not interoperable. What we need is a single DRM standard that lets consumers do with the music as they see fit within the confines of the law. That would mean copying to other owned devices and a limited amount of sharing among friends, but not via P2P. It is possible to get this and MS is purportedly working on it with something called PlayReady. Getting rid of DRM altogether would juice online sales temporarily but it would only be a matter of time before sales level off and slowly decline to the point where no one made any money. Without profit incentive not even a starving artist can survive. Stop whining for something that fundamentally won’t work and get behind a real solution that works for everyone.
April 15th, 2007
“Of course, Apple’s format, AAC…”
Fairplay is proprietary and thus Fairplay protected files only play on iPods, but AAC (Advanced Audio Coding) is part of the MPEG-4 standard, it’s not Apple’s format.
http://www.iis.fraunhofer.de/fhg/iis/EN/bf/amm/index.jsp
“Fraunhofer IIS is the leading international research institution in the field of high quality low bit rate audio coding. It has been the main developer of the most advanced audio coding schemes, like MPEG Layer-3 (MP3) and MPEG AAC (Advanced Audio Coding).”
“That method has worked quite well for Apple, with 48% of all Apple revenue being attributed to the iPod alone.”
The iPod alone accounts for 35-50 percent of Apple’s revenue, depending on the quarter. About half during the holiday shopping season, but only a third during the three other quarters. 39.7% for the fiscal year 2006.
“But the times are changing, and giving users the freedom to choose any media player they want may prove to put a dent in the sales of the fastest selling music player in history.”
The times are not changing, sorry. Most music played on iPods (and other players) is ripped from CDs or illegally downloaded from the Internet, and these MP3 files have always been interoperable, people are free to play these files on any player since forever. The iTunes store accounts for a little part, a handful of songs per customer.
“So what will Apple ultimately do?”
They will sell millions of iPods. :-)
“A subscription-based model sounds good for the consumer, and possibly good for iTunes to keep their customers. But given the move toward DRM-free music, it would never stand a chance; subscribers would sign up for service, copy the entire list of music, and simply cancel their subscription the following day.”
Are you joking or something? Of course a subscription-based service would require DRMs.
April 16th, 2007
“I am so tired of hearing whining children say “DRM doesn’t work so get rid of it.””
I suggest taking a nap, then.
“Well, they’re right about one thing, DRM in its current form doesn’t work”
Despite being tired of them, you do not seem to disagree… You then go on to propose another solution:
“What we need is a single DRM standard that lets consumers do with the music as they see fit within the confines of the law.”
Guess what: The solution of abandoning DRM entirely will accomplish this just as well, and much cheaper, too.
“Stop whining for something that fundamentally won’t work and get behind a real solution that works for everyone.”
You haven’t proved that abandoning DRM won’t work, and it would seem that a number of people with clout are in disagreement with you. And as yo the whining, it seems that you are doing most of it. As to getting behind a “real” solution, I think you have it backwards there, too: It is you who is advocating a solution that doesnt even exist in favor of the -real- one that everybody else is backing. But it is not too late to stop your whining and get on the right train.
April 16th, 2007
does anyone really think that the availability of DRM free music from the iTunes Store will make people want to buy crappy MP3 players?