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Music Execs Say Apple's DRM Hurting Industry
EMB Numbers writes "C-Net says last year saw a 131 percent jump in digital sales, but overall the industry still saw about a 4 percent decline in revenue. Some executives at this week's Digital Music Forum East conference lashed out at Jobs, blaming Apple and its CEO for their troubles. The impression at the conference was that Jobs' call three weeks ago for DRM-free music was anything but sincere. As the article puts it, 'Apple has maintained a stranglehold on the digital music industry by locking up iTunes music with DRM ... and "it's causing everybody else who is participating in the marketplace — the other service providers, the labels, the users — a lot of pain. If they could simply open it up, everybody would love them.""
DRM is what's hurting the (online) music industry. It needs to be eliminated, not "opened up".[1] Looks like the industry is a little irked at Jobs' statement.
Apple has already laid down its cards. "Open" DRM (can there be such a thing?[2]) is just as bad as any other DRM. It does not serve the customer.
The labels are hurting the industry with DRM. Apple is willing to ditch it wholesale (i.e., isn't interested in iTunes/iPod "lock-in").
The ball's in the music industry's court, not Apple's.
[1] Arguments about whether or not there would have been an iTunes store in the first place aside. There is one now, and online music has made a good showing. It's up to the industry to decide how to proceed, not Apple. Simply changing the face of DRM isn't a "step in the right direction."
[2] Yes, I know what they mean by "open" DRM. But who's it open to? Only other competitive music stores? So we can have one universal DRM "standard"? Aside from the massive technical hurdles to coalescing DRM with all the disparate formats and stores, is that really the right step to take?
No matter what the customers say, all the music execs understand is one word ... "blah blah blah blah DRM blah blah"
From the article:
... up (a lot)
CD sales fell 23 percent worldwide between 2000 and 2006.
Last year saw a 131 percent jump in digital sales
overall the industry still saw about a 4 percent decline in revenue.
So CD sales... down... (a lot)
Digital music sales
Overall down... ( a little)
Blame Jobs!
Brilliant!
What color is the sky in their world?
Rhymes that keep their secrets will unfold behind the clouds.There upon the rainbow is the answer to a neverending story
So do the music execs *WANT* DRM, or do they *NOT* want it? They can't have it both ways. They should just be happy that people are buying music at all lately, what with the production-grade excrement coming out of most labels lately.
There is no mod option "-1: Disagree" for a reason. "Overrated" is not an acceptable substitute. Post something instead.
As I understand it, Apple is the technological source of this DRM in question, but not the muscle that pushes for its incorporation into the files. If Disney wants DRM on its digital downloadable movies as a provision for Apple to sell them, then it's Disney that is failing to "open up." If Apple refuses to put DRM on their products, then I'd guess they wouldn't have those products to sell.
iTunes is not the problem, but the insane rules that govern the content that is distributed through it. Recently Apple said that they would drop DRM if the industry allowed. NOW the industry is crying that the DRM that THEY mandated to be inplace are actually hurting sales!?!
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So the customers don't want it, the music execs don't want it, the vendors don't want it, and I don't think he musicians are clamoring for it either... Why do we have DRM again?
I say someone needs to call the bluff.
It seems like there are two dimensions to the 'DRM problem,' and that Apple and the music companies disagree on which of these needs to be changed:
In Jobs' letter (whenever that was) he called for DRM-free music, because he said an open DRM standard wouldn't work (it would be too easily reverse-engineered, since many entities would have access to the code, or whatever).
An open DRM standard is exactly what the music companies want, however, and that's the point of this story. The music companies don't want to give up their (ill-gotten) rights over the music they sell but they want to appear like they're doing something for the consumer, so they argue for open DRM and call Jobs insincere. Ahh, it makes me angry.
How about driving you to refusing to buy the music in the first place?
Vote with your wallet, because that's the only vote that counts. Just buy used CDs. There are tons of places to do it online, and plenty of stores that sell pre-owned CDs as well. The RIAA and company gets zero money from it, and they can't stop it unless they wipe out the first-sale doctrine for everything, not just music. I wonder how much those music executives would enjoy being told that they have no right to resell their Jaguar to a dealership when they want to get a down payment on that nifty new Porsche.
Let's see, if I were Jobs and I had a near-monopoly on sales of digital music, would I give it away?
DRM is a financial fact of life, just like circumventing it is a technical fact of life. The only thing that will kill the DRM-monster is the sword of falling profits, and it looks like that is lost for the moment. No ammount of wishful thinking about open source DRM or Apple giving up its strangle hold will change this story.
Money. It is ALWAYS about money.
Here will be an old abusing of God's patience and the king's English.
Are you going to have to buy it all over again? Will they give you new copies of what you purchased? Will all the new DRM-free players also be able to handle any media with any outmoded DRM to allow backwards compatibility of things I've already bought?
Has anyone thought that perhaps the 180 degree change of opinion from Apple's side might find you paying twice for your "Best of The Rolling Stones" album?
The music executives demanded that every bit of music that comes out be "protected" with ConsumerRightsArentPermitted, and got, at least with Apple iTunes, exactly what they asked for.
So now they are reaping the consequences of their own shortsighted greed and contempt for their customers and they blame the messenger?
What is the porblem?!? I don't get it, the iPods are open for others. They happily support MP3's. Or don't they?! You just need to sell MP3's and the customer can play them. Ah, you do not want to sell MP3's?! Not my porblem, I am happy with it... :-)
You spelled "MONEY" incorrectly
Is it just my observation, or are there way too many stupid people in the world?
Cohen then proceeded to shackle his brother to a chair and ordered a subordinate to inject 8 units of pain serum, all the while screaming "WE DON'T WANT TO DO THIS. JUST TELL US WHERE THE MONEY IS."
Music Industry: We want DRM.
Steve Jobs: You got it. Hey, it only works with iPods as well. Isn't product tying great!
Music Industry: Can we have more control over our product?
Steve Jobs: Nope.
Music Industry: Oh. Uhm... We'll leave
Steve Jobs: No you won't.
Music Industry: Oh. Ummm can you open up Fairplay. This will mean there's some competition and we can afford to ditch you.
Steve Jobs:: Nope. Why would I ever do that?
Music Industry: We'll make you look like the bad guy.
Steve Jobs: You can try. I made downloadable music viable, produce the gadget all the cool kids want and I don't sue children and old ladies. Not only that, but I can plausibly blame all your troubles on you.
Apple, in it's traditionally clever way, has turned the tables on the music industry. The music industry, in initial negotiations, simply stated that they wanted "DRM." Apple designed and built a form of DRM that (A) minimally inconveniences their customers, (B) complies with the letter of the agreement, and most importantly, (C) uses the DRM to lock iTunes to its player, thereby profiting from the arrangement and effectively killing any other competitors. (Even MS can't break into the market.) As Apple has the only digital music store anybody would want to use, they use their considerable muscle to bully the music industry into doing what they want.
This is NOT what the music industry wanted. When they say "DRM," they mean DRM that protects *them,* not resellers. So now they're crying for Apple to "open" their DRM. They still want DRM, just DRM that doesn't give Apple the above benefits, the goal being to effectively give their competitors a chance to flourish. If this happens, the music industry will regain the upper hand in negotiations, and start forcing Apple to do its bidding. This will, of course, result in higher prices and poorer service.
The music industry is betting the public won't understand the difference between "opening" DRM, and doing away with it. The former helps nobody but the music industry. If they succeed in convincing consumers that the industry is opposed to DRM, and mean old Apple is forcing it on them, they'll be able to turn public opinion against Apple and get their demands met. This has nothing to do with helping the consumer, and everything to do with the music industry trying to wrestle its way out of Apple's iron grip on its throat.
We'll see how this turns out.
Formerly GNU/Anonymous Coward. This message has been determined to cause cancer in laboratory animals.
Not only have the Labels demanded DRM their license agreements basically prevent the sharing of that DRM with others. As steve Jobs said in the same dissing DRM speach. Apple is responible for the DRM if it fails Apple has to upgrade it to fix it. If Apple suddenly licenses it out to a dozen different companies they can no longer insure the DRM will be updated properly across all systems in the timely fashion that the Labels demand.
Just look at all the problems MSFT has had with getting playsforsure to actually play for sure.
i thought once I was found, but it was only a dream.
Look at the numbers in the article... online sales more than double but overall is down 4%. What should this be telling them? People WILL purchase music online, they are willing to pay and not pirate.
What else will it tell the **AA? It says people are fed up with thier practices and are starting to vote with their wallet. Revenue goes down they cannot possibly be at fault so it must be Steve Jobs. He did it! We did not make any bad decitions we are doing what our customers want and protecting our artists.
Well... the reality is Jobs is selling the music because he is comming closer than anyone to what customers ACTUALLY want. Online sales more than doubled and who caused that? Also of note is that they never said CD sales are down... only that revenue is down. Expenses such as suing so many people might drain revenue no?
The music industries realize that Apple's grip over the DRM distribution used for mose music is also the key to its elimination.
If Apple holds control over popular use of DRM, then it is inevitable music companies will have to offer DRM free music - because it's the only way to get the pricing control they really want. They don't want to be without DRM, which is why the demand Jobs give it up... it's like they built a giant castle, and just as it was done Jobs snuck in and raised the drawbridge. Now he's threatening to set a match to the powderkegs inside and destroy the whole castle. They don't want the general population to be able to enjoy the castle, they want it back for themselves.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Then you need just one hack, and you can have all your music be DRM-free everywhere! No more multiple-different-hacks for different DRM's.
stuff |
It was modded up three points, in the time it took me to comment. Thats a fairly accurate portrayal of whats actually going on. Don't believe the crap around here that "open drm" isn't possible. Thats exactly what MS has done, and exactly what the labels want out of apple.
It *is* possible, but Apple is either trying to maintain it supremacy, or is actually trying to wrest control of music distribution away from the labels. The latter seems a bit too idealistic for me, but its a consequence of them following the former.
I think we'll end up with more expensive, but drm free music from the major labels. Unfortunately, no company is in a similar situation to do the same with the movie studios, and given the close relationship between apple and Disney I don't see that happening for a long long time.
Well.. maybe. Or Maybe not. But Definitely not sort of.
Man, I laughed my ass off when I read this one. So, there's a 4 percent decline in overall revenue. The only reason they could find is Steve Jobs? Of course, it wouldn't have anything to do with the fact that their products suck, would it? No, they would never look at themselves and wonder why sales are down. I guess their latest "pop tarts" aren't bringing in the money they were a long time ago. Oh, and I'm sure the lawsuits aren't affecting the revenue line. Nah - it's got to be Steve Jobs, isn't it?
Please. How lame can you get?
It is not our abilities that show what we truly are... it is our choices.
In other words: Code is Law. Whoever controls the code controls what happens, no matter what happens. It's the moderm version of "possession is nine points of the law".
RMS figured it out in 1883, Lessig figured it out in 2000, Jobs figured it out in 2001 (probably read Lessig), the music industry figured it out two minutes ago.
How many songs are there that are on multiple "albums"? How often do record companies put out a "Greatest Hits" compilation and add a new song just to get the fans of that band to "need" to buy it?
Now, they don't need to. The iTuner gets the new "<fiction>Van HalenRunning With The Devil f. Alanis Morrisette on vocals</fiction>" for a buck, instead of shelling out $17.99 for that and 17 reruns. That's a 94.4% drop in revenue, and DRM has nothing to do with it.
A simple online search will lead you to several sites that offer commercially available MP3s for download without DRM. The same music, the same bands. Just no DRM. And these sites are growing at an insane rate as peolpe are getting fed up with DRM. Afterall, if I pay $1 for a song from a CD, it should be useable like anything else I own, just like how I can do anything from making a telephone answering machine message to a mix for my car or even make a mobile out of the CD I buy.
And that's not counting the hundreds of bands that aren't even with a major label. One co-worker of mine is the bass player for a quite well known indie band and they still aren't with a major label yet. They do tours in Europe to packed venues and yet do fine without a record deal.(or DRM as a result).
In fact, there's so much music that's NOT released by the major labels(dare I say Cartels?) that it's astounding. Just get out and look for it - and enjoy, bcause most of it is also free.
I don't know how you wound up modded up.. that is the whole issue though. Its EASY for people to transfer from iPod to iPod and near impossible to transfer from iPod to some other mp3 player.
Apple is probably aware that many people don't buy from iTunes Music Store because they don't want DRM-crippled music. Perhaps they are sitting on market research which indicates that *more* people would buy from iTunes Music Store were it not for DRM. (If you're like me, and I know I am, you buy music on a CD and rip it to your iTunes player then sync it to your iPod. DRM-free.)
If you mod me down, I shall become more powerful than you could possibly imagine.
they're the problem. they are not in control any more, customers are, and that's why they are running wild as wolves on crack in the courts trying to get some control.
they won't.
worst case is, we become a police state on rent to the RIAA, and the commercial music business completely dies out. you'll have your bar bands and individuals making their own music, no more supermegagroups and no more boy/girl band of the month bullshit.
best case is, the back libraries become fully availiable, every scratch and warped tape of it, in unlocked downloads for which the licensor (for there are no purchasers of music without all the suits on one end of the boardroom table and overwhelmed band members on the other) gets perpetual personal enjoyment for a half buck a track.
musicians, control your own back catalog, get it back from the pigopolists now. that way you get all the revenue. you don't need a label to catalog it, just a google search.
if this is supposed to be a new economy, how come they still want my old fashioned money?
i think you are dismissing the posts as fanbois, but they have a point.
1) before iTMS Apple had that iTunes Rip-Mix-Burn ad campaign that got the RIAA in such a tizzy. they are never happy. that ad was about making mix CDs with your own content. it wasn't download-mix-burn.
2) the iPod was huge BEFORE iTMS existed, so don't blame the store for people buying iPods
3) the iPod can play most any DRM-free music, as can the other popular music players. they can sell non-DRM music and everyone can play!
4) supposedly *most* iPod owners still do not acquire content from iTMS, and the heavy buyers are really heavy buyers. the bulk of users (in terms of a head count) buy some singles here and there. therefore most are not locked into the iPod platform. i have personally spent maybe $5 at iTMS, the rest i rip from my CDs. i could take that $5 loss in stride if i changed teams.
what about people that were previously "locked in" to 8-tracks? they got no compensation from the industry for buying a format that died off....
Imagine apple opened up it's DRM to other stores. Now Sony goes to store B, C and D, which are rivals, and says we'll let the first one of you agree to our new rules have exclusive access toour top artists. Namely we want you will charge $7.99 and bundle them in sets of 5. No more singles and no more $1 songs.
Well duh, one of them will Kowtow. And it won't be apple which will sputter along trying to enforce the $1-single song rule.
Thus the only thing keeping the status quo which we all like ($1 songs and ability to buy singles) is apple's exclusive control of it's DRM. The moment that vanishes the Music INdustry has us in its claws.
So pray that apple does not open it's DRM to other stores.
Now on the flip side if all music is sold without DRM, well then there's another enformcement mechanism. If the music industry charges too much and forces song bubdling too much then Gnapster like trading services make a comeback, made all the easier by the lack of DRM on a much large song base.
So Jobs I think was right, but for different reasons than he stated. The most consumer freindly situation is that DRM be apple only or not at all. Apple is a good watch dog in this case because they profit from keeping song prices and tersm consumer freindly since that favors iPod sales as long as there is DRM. Second, they make a good watchdog because they are not threatened if DRM entirely vanishes. THe only thing threatening them is if the Music industry starts dictating higher prices and bundling songs because that will move sales off to crappy user unfreindly sites and diminsh the appeal of the ipod.
Some drink at the fountain of knowledge. Others just gargle.
is that the music execs' comments are anything but sincere. So they are calling for the elimination of DRM? The RIAA and MPAA are the litigious SOBs who insisted upon it! They are okay with just opening it up without restriction and fundamentally giving the content away, huh? Riiiiiight.
So what gives? Did the execs sign an exclusive contract with Apple? How is it they have a strangle hold when the RIAA has the copyrights to the content? What stops them from using Microsofts store (hehehehe)?
They have access to multiple distribution channels and when one becomes successful enough to obtain brand identity they cry foul!
Some shit, different episode. These guys aren't playing with a full deck. Or at least they think we aren't.
You are checking your backups, aren't you?
Doesn't Sony already have the Connect store for that?
The music industry wanted a system that is draconian in control, that "permanently" tied music to specific systems, that can't transfer control easily. Congrats, they got it! Oh but wait, the music industry really didn't want it to be draconian against them. Now they are claiming that they can't control it because it is draconian, permanently ties music to systems, and they can't get control. It seems to me that it isn't Apple/Steve Job's fault at all. The industry got exactly what they begged for.
Sounds like they made their bed, now they got to sleep in it. Pleasant dreams.
The best argument Jobs made in his letter was that the music industry is already selling the same files they want locked down with DRM in a completely un-encrypted format on little plastic disks.
It's like they are insisting on having at least three deadbolt locks on their back door of their house, while they have no plans to even install a lock on the front door.
People who want to scatter their content to the four winds can already do so by getting a CD and ripping it.
Therefore, DRM on the iTMS files protects absolutely nothing.
The only effect it is having is that it hurts on-line sales, because DRM-encrypted files have less value than those on CD.
If I were a cynical person, I would suspect that this was their agenda all along. But since I'm not *cough*, I have no explanation for their position.
Information wants to be anthropomorphized.
That explains the beard - it's to hide the neck scars from when Sean Connery almost cut his head off.
I think the original poster was saying that at the moment, power is not in the hands of the RIAA but in the hands of Apple. As soon as Apple licences FairPlay, the power shifts back to the RIAA, as then any company can sell music for the biggest player in town, the iPod.
It's better now to have the power not rest with the RIAA and try to force the end of DRM rather than give them back everything they need to retain full control over the market.
Does Apple have a monopoly on music? Maybe online music, and while I'd argue they don't, it's not straightforward.
Does the RIAA have a monopoly on music? Absolutely. They control almost all music in every sphere of commerce except online sales, where Apple has the upper hand.
Should we give them more power over online sales? Well, given their history of trying to force price increases (variable pricing on iTunes) and extorting money for players sold ($1 per Zune) it's hard to see that giving them even more power is a good thing.
I agree with the other poster - having Apple control FairPlay completely gives them a bigger wedge to open the RIAA up for dropping DRM. Once DRM is gone, the power shifts away from Apple, but not to the RIAA. It goes to all the music stores, who can now compete fairly against the iTunes Music Store and sell songs for the iPod. This would seem against Apple's interests, until you think about the cost of adding DRM to each track, maintaining DRM systems and all that.
Steve Jobs is right in my opinion - the options are no DRM, or all DRM and we've seen that all DRM isn't working. Licencing destroys the ability to bargain.