02.26.2007 - Submitted by: tablaunch
Steve Jobs has it right.
"DRMs haven't worked, and may never work, to halt music piracy," he says in an column titled, "Thoughts On Music," at the Apple Web site (www.apple.com/hotnews/thoughtsonmusic/).
"DRM" stands for "Digital Rights Management," a coding scheme designed to prevent the unauthorized copying of a digital song.
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DRM is the main reason why digital music you buy through iTunes won't work on mp3 players outside the iPod. It's the main reason why music you buy through Microsoft won't work on mp3 players outside the Zune.
DRM is the main reason why you have limited rights over how and where you can use the music you've legally purchased.
Apple is currently the world's most successful vendor of legally downloadable digital music - in 2006, over two billion songs were purchased and downloaded through iTunes.
But, as Jobs notes, in 2006, over 20 billion songs total were sold by the music industry in the form of music CDs - and music CDs are not copy protected. There is no practical DRM program for music CDs.
That means 90 percent of the music sold by the music industry is DRM free.
Nearly every song sold through iTunes in a DRM format also is available for purchase as a CD without DRM.
Indeed, Apple statistics indicate, on average, about 22 songs out of 1,000 on an iPod - only 3 percent - are purchased through iTunes. The remaining 97 percent of songs come from other sources - usually music CDs - and are DRM-free.
"The music companies sell the vast majority of their music DRM-free, and show no signs of changing this behavior, since the overwhelming majority of their revenues depend on selling CDs which must play in CD players that support no DRM system," writes Jobs.
So what is being protected here? For all the fixation on DRM and all the handwringing over allowing consumers to legally buy and download music, all it takes is one person to upload one copy of "Say It Right," by Nelly Furtado from her DRM-free CD to destroy all pretense of any DRM protection against copying and disseminating music.
What's baffling is how the music industry doesn't see the revenue-generating digital opportunities sitting before it. A fear of music piracy that goes beyond reason and rationality, coupled with a "circle the wagons" and "us against them" mentality, has led the industry to sail a DRM ship that is doomed to sink as surely as the Titanic went down.
All the industry has to do is look at why Apple's iTunes has done so well.
It's obvious, really.
People are not buying music via iTunes because it makes them feel good to legally purchase digital music.
People are not buying music via iTunes because they support DRM and limitations on how they can use the music they buy in exchange for making sure the music industry gets every penny to which it feels entitled.
People are not buying music via iTunes because they are getting more digitally than they would buying a CD. Indeed, the audio quality is lower and, with few exceptions, you don't get any album artwork or printed lyrics.
People are not buying music via iTunes because it is cheaper than storebought music. At a fixed 99 cents per track, buying a complete CD, song for song, costs more online than at the store.
So why have people purchased more than 2 billion songs through iTunes?
Convenience, single track selection, price.
It's easy to buy a song through iTunes. A few clicks and the music is on your machine in less than a minute. Immediate gratification. In the digital world, impulse buying is king.
In the iTunes digital world, people can buy specific songs from a particular artist. In the real world, you're forced to buy a CD with, say, a dozen songs you don't want just to get the two songs you do want (the music industry killed the single song business when CDs replaced vinyl 45 records and cassettes). As a result, your cost per song desired is $5 to $7 on CD, as opposed to 99 cents per song online.
If a person has $15 to spend on music and can either buy one CD with a few desired tracks or 15 desired songs online, which direction do you think that person will lean?
It's a simple, successful business model. And the music industry could dominate it in months if it wanted.
The iTunes store, the most successful digital music service to date, could be swept aside like a gnat if the music industry were to embrace a DRM-free online distribution opportunity.
Older or specialized music that appeals to a limited audience is often an unprofitable CD venture. But it could make money online, distributed digitally without the burden of CD overhead and manufacturing costs.
The opportunity and future is there. Instead, the music industry at the present time prefers suing its customers, imposing restrictive rights management technology, secretly installing spyware from certain CDs onto people's computers and focusing more on court subpoenas than customer service.
The solution to the industry's woes and fears is plainly in front of it. And it's free.
But then, maybe the industry has forgotten how to handle something that comes free, without any form of DRM around it.
Source: Bismarck Tribune http://www.bismarcktribune.com/articles/2007/02/25/news/columnists/darnay/129180.txt