The music industry should be in a state of panic right now, but not because of piracy. The confusion surrounding digital music and the future of DRM was compounded this week by Steve Jobs’s open letter to the recording industry. And if the responses from the Norwegian Consumer Council and the RIAA were graded like reading comprehension questions on the SAT, neither group would make it past high school.
Jobs’s articulate plea to the Big Four labels to allow sales of un-DRM’ed content at online music stores is a masterpiece of wildly spun logic. The idea that since CD sales still make up 90 percent of record labels’ revenue so what’s the point of squabbling over a mere 10 percent is very short-sighted. He blatantly overlooks the fact that CD sales are declining, and digital downloads are increasing.
The media loves to point out that digital downloads aren’t compensating for tanking CD sales. To expect digital downloads and CD sales to remain in some kind of perfect balance, with downloads stepping in to fill the gap seamlessly, is foolish. Downloads really will replace CDs–just not until technology like DRM ceases to be a factor in purchasing decisions.
As Torgeir Waterhouse of the Norwegian Consumer Council astutely points out, Jobs goes on to turn the whole issue on its head by stating iPod owners are not locked into [the] iTunes Music Store–the issue our complaint [addresses] is of course the opposite, iTunes Music Store customers are locked to the iPod.”
Waterhouse then turns it around yet again and says it’s Apple’s responsibility to axe DRM rather than that of the labels. “It’s Apple and [the] iTunes Music Store [that] should be addressing the issue of record companies and DRM themselves if it needs to be addressed.” C’mon. If Steve un-DRM’s the music, he’ll either be sued into oblivion for breaching his contract with the devil majors, or they’ll pull their catalogs and cost Steve a huge chunk of change.
Equally outlandish is the RIAA’s response (via the LA Times): “Apple’s offer to license FairPlay to other technology companies is a welcome breakthrough and would be a real victory for fans, artists and labels.” Apparently the herb over there at the RIAA is potent enough to cause them to hallucinate. Steve made no such offer–he said opening up FairPlay would mean Apple “can no longer guarantee to protect the music it licenses from the big four music companies.”
How can the majors be persuaded to give up a $2B annual business that they’re grooming to be their bread and butter within the next 5 years as physical media disappear? Part of that money comes from un-DRM’d music, but that’s a small slice of the pie. Besides, for all Steve’s pandering to consumers, he does point out that in the current DRM situation “customers are being well served with a continuing stream of innovative products and a wide variety of choices.”
One major thing that’s being overlooked in the DRM debate is that the RIAA isn’t really interested in DRM to prevent piracy now. If they were, they’d attack CDs with the same vigor as digital music. They’re interested in getting the DRM system going for the future precisely so they can avoid what happened with CDs.
Am I saying that DRM is not only here to stay, it’s going to be pervasive? Yup. But as I’ve written before, the landscape will change because the majors eventually realize that consumers want the rights to not just a single file, but to a song, a la what Navio is trying to do.
You’ll pay more than current prices, but it’ll still be (marginally) cheaper than buying CDs, and you’ll be able to download songs in whatever DRM format you need, whenever you need them. You’ll still be subject to limitations like how many devices or computers you can play the files back on, but it’s a lot better than being locked into a single player depending on where you buy music. This eliminates the need for Apple to open up FairPlay, too.
Think this’ll push people to illegal downloads? Maybe, but according to the NPD Group, “In the US, lawsuits were the most cited reason by computer users for changing from unauthorised P2P to legal downloading.” So far and there’ve been 10,000 lawsuits against file-sharers in 18 countries. Now we now where all that money we’ve been paying for music is going….
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