What would be the impact of DRM-free music?

Last week Apple's Steve Jobs called on the record industry to drop DRM and adopt a more open approach to the distribution of music.  Then rumors started to circulate that EMI was in talks with Snocap, a company founded by Napster creator Shawn Fanning, to release music in MP3 format on MySpace.  But what impact would a DRM-free music industry have on the music industry and piracy, as well as on those who listen to music?

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Personally. I don't think that issues surrounding DRM are as clear-cut as the media make out.  I'm certain that the feeling here on ZDNet amongst the readers is that DRM is evil and should be eradicated.  However, if you go to a wider audience I'm certain there is a real blind spot where it comes to DRM.  To most people, the fact that they music is locked up or tied to a particular system isn't something that they are aware of.  People with only one PC (and there are a lot of them out there) just don't see many of the problems that DRM introduce.  They can play their music on their PC and move it to a portable device.  I've come across a number of people who have lost DRM-protected music because of a system crash who believe that they did something wrong or that it's normal to lose everything when the system crashes.

And that's the problem.  Outside of a small circle of techie or geek users, there's isn't a real understanding of what DRM is, which means that as a whole, consumers don't really care about the issues (in much the same way that there's a huge browser apathy which leads to big companies such as Wal-Mart’s download site, choosing to support only one browser, usually Internet Explorer).

So, what effects would having no DRM on music have?  Here's my view:

• Effect on the music industry:
  I think that while the music industry would fuss about losses due to piracy – and while I have no doubt that there are losses, I'm certain that these are small and akin to the kind of shop-lifting losses that any bricks-and-mortar store has to shoulder – the true effect would be pretty small.
• Effects on piracy:
  Despite making use of DRM and having herds of lawyers on a retainer, piracy exists and you can find and download pretty much anything you want right now.  Doing away with DRM would remove the ripping the CD step out of the piracy workflow, but that's no major hassle for any determined pirate.
• Effects on those listening to music:
  Again, I think that the effects would be negligible.  It would be harder to lose music as a result of a system crash and easier to share music between different devices but I don't see this turning everyone into a pirate.  I wish that the recoding industry would have more respect for their customers than to think that everyone is a potential thief. 

If the recording industry does actually decide to drop DRM, I think that they'll start off by releasing other older, less popular stuff (from a commercial perspective) without DRM.  Over time the studios might realize that we're not all thieves.

Thoughts?