Between the Lines

Larry Dignan, Andrew Nusca and Rachel King

DRM: The hearse is right on schedule

By | August 10, 2007, 8:58am PDT

Summary: Universal Music Group on Friday said that it will sell “thousands of its albums and tracks” without DRM for a limited time. Universal said in a statement that its test will run from August and January and track “consumer demand, price sensitivity and piracy in regards to the availability of open MP3s.” And then when [...]

Universal Music Group on Friday said that it will sell “thousands of its albums and tracks” without DRM for a limited time.

Universal said in a statement that its test will run from August and January and track “consumer demand, price sensitivity and piracy in regards to the availability of open MP3s.” And then when Universal finds that demand increases it’ll ditch DRM permanently (I added that last part).

But the writing is on the album cover (more on Techmeme). EMI is already doing the DRM-free dance. And others will follow. Sure Apple CEO Steve Jobs may have prodded things a little but DRM’s days are limited.

If the Universal and EMI experiments go well–and they probably will–other labels will view DRM as the handicap it is. Universal will also use Google’s AdWords to drive traffic to the DRM-free downloads.

Universal was sure to note that it “will continue to support innovative digital models such as subscription and ad-supported services which rely on DRM as an enabling technology.”

Of course it will. For the music industry one big appeal of the DRM-free movement is that it may break Apple’s dominance in the business.

In fact, this paragraph in the Universal statement is telling:

Participants including Google, Wal-Mart, Best Buy Digital Music Store, Rhapsody, Transworld, Passalong Networks, Amazon.com and Puretracks, will offer downloads to consumers in the DRM-free audio format of their choice in a variety of bit rates. For the most part, the DRM free downloads will be offered at standard wholesale prices.

One question: Where’s Apple?

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Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic.

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Larry Dignan

Larry Dignan has nothing to disclose. He doesn’t hold investments in the technology companies he covers.

Biography

Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CNET News.com. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism and the University of Delaware.

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Talkback Most Recent of 36 Talkback(s)

  • Re: Where's Apple?
    Right where they wanted to be to begin with.

    Selling iPods.
    ZDNet Gravatar
    Letophoro
    10th Aug 2007
  • ZDNet Gravatar
    itanalyst
    10th Aug 2007
  • No way
    Don will, of course, deny ever making any such prediction.
    ZDNet Gravatar
    Yagotta B. Kidding
    10th Aug 2007
  • Who is this No_Axe Hole anyway?
    He's on all the TalkBacks with a million opinions--mostly wrong opinions. Does anyone know WHO he is?

    This is the same guy that is an unabashed Microsoft lover, isn't it?
    ZDNet Gravatar
    JohnBoyTheGreat
    7th Sep 2007
  • RIP DRM ...
    DRM doesn't sell ... so much for the tail wagging the dog strategy. No amount of effort on the part of the content industry and no amount of effort on the part of their flag waving fans like Don Rupert is going to make this pig fly. In the end, it is the consumers that drive the market, not the vendors. The vendors like to think that they are in control, but they are only dreaming. It is the consumers that put the money in their pockets, and when that money stops coming in, the party is over. RIP DRM ...
    ZDNet Gravatar
    George Mitchell
    10th Aug 2007
  • ZDNet Gravatar
    P. Douglas
    10th Aug 2007
  • Oops...another ignorant comment...!?!?
    Dude...if DRM doesn't sell, how the hell did Apple and iTunes build an entire business model out of doing exactly what you said couldn't be used to do such a thing?!?!?!?

    Personally, I can't WAIT for DRM to go away, but, for #@*$ sake...are you kidding?

    Help. I'm drowning in bulls**t...
    ZDNet Gravatar
    GuyAlanDye
    10th Aug 2007
  • It wasn't DRM that was selling those sexy devices ...
    DRM was just so much baggage that the consumer was forced to accept in order to use the device. As soon as a competing product becomes available WITHOUT DRM, watch Apple make a hasty retreat. Actually, I think they are already retreating. The attraction is the iTunes format, not the fact that it is saddled with DRM.
    ZDNet Gravatar
    George Mitchell
    10th Aug 2007
  • You might enjoy this..
    Red Dwarf's "Kryten" (Actor Robert Llewellyn) and his opinion of the DRM'd BBC iPlayer

    http://www.youtube.com/watch?v=Zv82S7q5Qw0

    Considering that Red Dwarf was a BBC production (7 series of it....)
    ZDNet Gravatar
    bportlock
    10th Aug 2007
  • To H*ll With That...
    These, my friend, are your quotes:

    1) "DRM doesn't sell"
    >>> It already has. A lot. Millions of dollars worth of it are sitting on millions of dollars worth of hardware designed to play specifically those DRM-laden files as I type these words.

    2) "no amount of effort on the part of their flag waving fans like Don Rupert is going to make this pig fly"
    >>> This "pig" has been flying obviously too high for YOU to notice for several years. Whatever happens next doesn't change the fact.

    3) "it is the consumers that drive the market, not the vendors"
    >>> This is the only line I agree with. The consumer will decide. And they have. (Re-read my response to "DRM doesn't sell.") They have so curbed their spending on shrink-wrapped music that the industry is now responding with whatever they can to make what appears to soon be their primary means even more appetizing to the consumer.

    Another would-be pundit talking as if the industry is frothing at the mouth for their pearls of wisdom born from zero knowledge of an industry they so obviously know nothing about.
    ZDNet Gravatar
    GuyAlanDye
    10th Aug 2007
  • IF DRM is selling so well...
    then why are EMI and Universal even experimenting with DRM free content? I mean, if it's a help and not a hindrance, why would they ever change their sales model?

    Maybe it's to do with the fact that online music sales make up less than five percent of all music sales with CDs still going strong (only the Big Five's CD sales are down) and two major record labels have finally woken up to the fact that DRM is not helping.

    So unless you have some kind of figures that contradict mine, and that the vast majority of people rip their CDs (had for cheaper off Amazon than the Album would be off iTunes store) and load the DRM free content on their iPods, it's best you shut up until you know what you're talking about.
    ZDNet Gravatar
    odubtaig
    12th Aug 2007
  • The truth is . . .
    "Millions of dollars worth of it are sitting on millions of dollars worth of hardware designed to play specifically those DRM-laden files as I type these words."

    Yet the vast majority of music on these devices is DRM-free (usually ripped from CDs), as Apple themselves admit.
    ZDNet Gravatar
    CobraA1
    12th Aug 2007
  • In addition, here's an open letter by Steve Jobs you should read
    In addition, here's an open letter by Steve Jobs that you should read that confirms what I've said about DRM.

    http://www.apple.com/hotnews/thoughtsonmusic/

    In particular these paragraphs should be interesting - I have highlighted a key phrase:

    "Let?s look at the data for iPods and the iTunes store ? they are the industry?s most popular products and we have accurate data for them. Through the end of 2006, customers purchased a total of 90 million iPods and 2 billion songs from the iTunes store. On average, that?s 22 songs purchased from the iTunes store for each iPod ever sold.

    Today?s most popular iPod holds 1000 songs, and research tells us that the average iPod is nearly full. This means that only 22 out of 1000 songs, or under 3% of the music on the average iPod, is purchased from the iTunes store and protected with a DRM. The remaining 97% of the music is unprotected and playable on any player that can play the open formats."


    Sorry to burst your bubble, but people are not buying a lot of DRMed music. They're just buying the iPod. 97% of people are voting with their wallets - and they're voting for DRM-free music.

    DRM is on the way out. Apple is already offering DRM-free music for EMI, and claim that half of their catalog is likely to be DRM-free by the end of the year. IMHO the hearse is indeed right on schedule.
    ZDNet Gravatar
    CobraA1
    12th Aug 2007
  • Misguided to the Max
    What does make me laugh is when some doorknob who know jackcrap about a subject gives others hell about their take on a matter and then proceeds to tell them they know nothing about the industry. This last line of GuyAlanDye is a real killer:

    "Another would-be pundit talking as if the industry is frothing at the mouth for their pearls of wisdom born from zero knowledge of an industry they so obviously know nothing about."

    Wow. I have never seen anyone burn themselves so bad like that before by laying a claim at the feet of another which so clearly applies to themselves. If GuyAlanDye really thinks DRM is selling for any other reason then it comes embedded in the songs, which are the products people really want, then he should leave the sane people of the world alone so they don't have to risk wasting their time on his babble.
    ZDNet Gravatar
    Cayble
    4th Jan 2008
  • It isn't selling that well
    DRM music isn't selling well. How many DRM ladden services have started up and died? Only Apple has survived and they do so off hardware sales that don't require DRM. Also I-Tune while it has DRM has clear paths set out to allow you to bypass the DRM. Burn to CD and rip to another DRM free format. Music site that offer DRM free music from independent recording artists have been booming with business too. It seem DRM is not selling but it has been stagnating for years while a few buy and the rest go for DRM free music and buy CDs.

    Another thing about DRM. Consumers will buy it, unaware of what they have bought, then they go a few years with no problems till they lose that IPOD and buy a new ZUNE only to find the hundreds of dollars worth of music they bought won't play on it. Then they stop buying and pirate the music they paid for so it can play on their Zune.

    DRM encourages piracy and I think some big fat cats are learning this. In 10 years we'll look back on this all and talk about how stupid the RIAA was back then just like we talk about how the MPAA was stupid in the 80s. In the end instant gratification offers a lot of money to made if they sell the music for reasonable price.

    I still think a buck a song it too much. Sure I might buy a song or two that I know I want for a buck each. But sell them for a quarter each and I'll try two dozen songs sampling in a search for something new to listen too. So that's $2 or $6 bucks. If you were in business which would you pick when you're talking about a market this size that extra $4 turns into very huge number really quickly. $6 to download 24 songs will occupy a few hours of my time and $6 isn't much money. The price of coffee in some shops. But if I just know of 2 songs that I know I want that's all I'll buy. I won't spend $24 sampling music, it's not worth it and cost too much.
    ZDNet Gravatar
    voska
    13th Aug 2007

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