Sony BMG Dropping DRM

Lally Singh writes "BusinessWeek is reporting that Sony BMG is planning on dropping DRM from their music. Salon's Machinest had an interesting take on this; 'Actually, what's happened is quite ironic. It was the industry's own DRM mandates that tied many music-lovers in to Apple's music storefront (we all had iPods, and the only way to buy digital music for the iPod was from Apple). Now Apple's become too powerful for the labels. They need an alternative distribution channel — they want to get music to our iPods, but they don't want to go through Apple to do it. The only way to do that is to offer retailers like Amazon the chance to sell songs as plain, unrestricted MP3s, which are iPoddable.'"

Comments

this should be nice

[yagu]

This should be a nice switch, I've already been purchasing from amazon's mp3 store and find the ergonomics, the quality, and price all to my liking. And, if I find something I really like I purchase the real deal, the CD. I for one welcome our former DRM overlords into the fold.

This only widens and expands the music industry's audience, it is the logical conclusion to a stupid experiment. I suspect there are other efforts in the works to try and keep a grip on their "property", but this is yet another death knell to the music industry as they (the execs, etc) know/knew it. Wait until some breakthrough artist figures out they no longer need to be beholden to the record labels for their livelihoods.

Now, if only we could see some of this sanity become contagious and spread into some of the other media. DRM is a pain and it's ineffective. Just 2 days ago I watched on DVD a movie still only in theater-release -- I won't say where (it wasn't at my house), and I won't say who (it wasn't someone I knew). I would never do this, but it's obvious DRM only makes life more difficult for the honest consumers. (Wasn't there an article recently here about someone's collection of media getting wrapped around the DRM axle because he bought a nice new monitor on which to watch his movies?)

Re:this should be nice

[Anonymous Coward]

They had to do this. Working with MP3 files are so simple that anything with DRM is a hassle to work with. When its alo more work to pay for stuff that gives you problems, the simpe to use and free stuff is way to tempting.

http://stld52.blogspot.com/2008/01/drm.html

Re:this should be nice

[sm62704]

I would never do this

I would. I have no problem whatever making life miserable for thieves and miscreants like those bastards who run the entertainment industries.

"The VCR is to Hollywood what Jack The Ripper was to women" -Jack Valenti, head of the MPAA when he made that stupid comment.

Fuck 'em all. When they start running respectable businesses I'l respect their businesses.

Re:this should be nice

[Em Adespoton]

Wait until some breakthrough artist figures out they no longer need to be beholden to the record labels for their livelihoods.

Actually, artists have a limited choice -- the big this is: wait until some breakthrough recording studio figures out that they no longer need to be beholden to the record labels for their livelihoods. THEN we'll see a revolution in music distribution.

Just imagine -- a recording studio that will give you access to high quality recording and post-production tools, AND will handle your international distribution and publicity, completely side-stepping the labels. There are a few mid-size indie labels that operate somewhat along these lines, but all you really need for music distribution are the artists, the performers (usually the artists, although studio musicians also play a part), the recording studios and a recognizable internet presence.

Studios could even modify their recording contracts so that some of the costs to the artists would be offset by website advertising, and the studio takes a (small) cut of every song sold through their site. This gives the studio impetus for doing a good job on the post-production, but also lets artists eat the cost when necessary.

Powerful?

[earlymon]

What does it mean, Apple's become too powerful, so Sony needs another distribution channel? Is Apple driving the prices up? Is Apple restricting Sony to only sell DRM'd music? Is Apple incapable of supporting non-DRM formats? Does Apple not reach sufficiently worldwide.

Like a guy who's murdered his parents pleading mercy as an orphan - Sony pleading innocence over where they're at with ecommerce of their music.

Re:Powerful?

[ivan256]

What does it mean, Apple's become too powerful, so Sony needs another distribution channel? Is Apple driving the prices up? Is Apple restricting Sony to only sell DRM'd music? Is Apple incapable of supporting non-DRM formats?

None of your hypotheticals. It simply means that Apple wants too big a cut of the profit. Sony feels it can't make money selling downloads that don't work on iPod, and Apple has said that they need to either use no DRM, or give Apple a big check to use Apple's DRM. Otherwise no-iPods. Sony has chosen to ditch DRM rather than pay Apple. It has nothing to do with Apple restricting, or failing to be able to support anything.

Whether this is what Apple intended or not, we should be thanking them for things like this.

Re:Powerful?

[tlhIngan]

What does it mean, Apple's become too powerful, so Sony needs another distribution channel? Is Apple driving the prices up? Is Apple restricting Sony to only sell DRM'd music? Is Apple incapable of supporting non-DRM formats? Does Apple not reach sufficiently worldwide.

More like, "Apple won't bend over and cede to our demands!"

Everyone knows that Apple has a standard iTunes contract. Now that iTunes has proven to be the #1 place to get music legally, and is something like #3 in marketshare for music, the labels are worried because Apple has this store that sells to the #1 music player, and no other store has that potential. Apple could very well dictate the terms, basically by saying "This is our offer. Take it or leave it." (whether that includes iTunesPlus or not... I don't know).

Amazon opens up a store that's DRM free, and backed by a relatively large and well-known company.

Labels have a choice - bend over and accept Apple's terms, and keep DRM, and be usable on the #1 music player. Option 2 - make their own terms with Napster/Zune/etc, keep DRM, but be usable on the small subset of players. Now with Amazon, option 3 is, negotiate with Amazon (they need music), drop DRM, and be usable on the #1 music player.

Labels have decided that temporarily, dropping DRM is better than Apple's terms, and hope to make it such that instead of Apple dictating the terms to the labels, the labels will be in the power to dictate terms to Apple ("We have Amazon. We don't need iTunes") and hope that Apple rolls over.

It's really a power play. The labels are afraid of having terms dictated to them, and see if they can make Amazon a powerful music store, that hopefully they can leverage Amazon against iTunes. If Amazon is too powerful, they can ditch Amazon for iTunes. But in the meantime, they know that by weakening iTunes, Apple won't be able to standard-contract them.

And if Apple closes the iTunes store, they can ditch Amazon as well, and we'll be back at square 1. So closing shop isn't a real option, but having iTunes and Amazon compete for labels is.

For the consumer, it's "ain't competition grand?" for now. Once Amazon saps some of iTunes' strength, they'll put back in their demands of "demand pricing" or whatever other crap they want, knowing Apple will want to compete with Amazon.

Interesting play, interesting times. I say, enjoy it while it lasts...

Re:Powerful?

[larry bagina]

the iTunes Music Store profit is negligible. The record label gets around 70% of the purchase price. The iPod is where the money is at., and Apple has (rightly) refused an RIAA tax on it.

Re:Powerful?

[earlymon]

Sorry, but Apple keeping prices down - on a breakthrough distribution method with a breakthrough product that expanded the market insanely - doesn't equate to Apple's fault that record companies are losing money.

What do you suppose Sony's income would have been without Apple forcing them into a viable online marketing strategy in the first place?

Re:Powerful?

[flanksteak]

What does it mean, Apple's become too powerful, so Sony needs another distribution channel?

Even if you're not currently getting screwed, it's usually not in your best interests to be dependent on a single distributor. FakeSteve summed it up nicely a while back.

It's almost like iTunes is doing to the record companies what they've been doing to the artists and record stores for so long: maintaining vise-grip control of the channel. Only with iTunes, nobody else seemed to want it in the beginning.

Re:Powerful?

[peragrin]

Apple makes 9 cents a song. with that they have to pay the credit card company, pay for the bandwidth, storage, ripping costs.

i would be surprised if apple has made 50 million dollar profit on the 3 billion plus songs sold. Amazon is one of the few who could compete on that level.

thanks Apple!

[larry bagina]

Apple convinced them to sell per-song downloads, then got so successful at it the big record labels had to abandon DRM to spite them.

serves them right

[circletimessquare]

they could have built their own portals in 1999. they didn't. they filed lawsuits against soccer moms and college kids instead

apple came, gave college kids what they wanted many years later, and so the big publishers, by denying reality of the changing business they were in, effectively handed apple all of the power they previously had, and could have retained

they screwed themselves

no sympathy

See? No Monopoly

[cmholm]

This plainly shows what was obvious to those who wanted to look, that any monopoly Apple has on electronic music sales is because the record labels chose to give them one. Since they seem to be having second thoughts about that choice, they are looking at an alternative: selling straight mp3 downloads.

If Apple ever locked down the iTunes application so that users couldn't import mp3s, then we'd have a reason to whine. But, there would still be Sandisk and the rest, as well as places to buy music for them. Choices still! Imagine that.

Fucked by their own dick..

[db32]

Is anyone surprised at this? Let us examine the Sony portfolio of media...

Betamax - fucked themselves - now deal with VHS gear
Minidisc - fucked themselves - now deal with CDs
Memory Stick - fucking crap - everyone else deals with SD, waiting for them to realize they are fucking themselves
Blueray - nothing exciting - everyone is still basically on DVDs with no incentive to change

Now we can add

DRM digial music - fucked themselves - now drop DRM to sell more.

Pick one: DRM or copyright infringement lawsuits

[compumike]

They want to protect their intellectual property, which is understandable (although I'm sure some slashdotters will argue this point). But I think fundamentally we're going to have to accept one of two mechanisms by which they can do that. The first is DRM, and the problem is that it undermines lots of legitimate (fair, free) uses of the content. The second is lawsuits for civil or criminal copyright infringement, which have significant statuatory damages.

So I'm happy that people are waking up to the problems with DRM, and that companies are realizing it too. But realistically this means that more enforcement burden will be on legal action, which tends to be economically burdensome on individuals, although it is more likely to produce a socially acceptable result (allowing certain cases of fair use).

--
Educational microcontroller kits for the digital generation.

Why should the labels be in control anyway?

[jhfry]

What I don't understand is why the labels have such influence in the sales of music. Contrast it with retail sales and you will understand what I mean. In typical retail sales, the retailer purchases X items from a distributor or direct from the manufacturer and sells the for whatever they choose, allowing the retailer to compete and allowing the manufacturer sell the items for their desired profit margin, the only people who's profit margins are influenced by competition (of the same product) are the retailers.

In the online music world, the Label places all kinds of stipulations and requirements on the seller. Wouldn't they simply be better off selling X licenses for Y cents per license to as many online sellers as possible and let them duke it out over selling as many as possible. You would see Apple's, and many other sellers', profit margins drop as competition raged. Consumers would be buying at lower prices, which would increase overall sales, and advertising would increase as different sellers tried to attract new buyers.

Overall, a simple Manufacturer -> Distributor -> Seller -> Buyer structure where the manufacturer is hands-off on the sales end would probably make the most money for them. Even with piracy raging in the background, I guarantee that if I could pick up a bunch of music for $.25 per song (with $.24 going to the label), I'd be all over it. If the label want's more money for a newer track, simply sell it to the distributor/seller for a higher price and let them figure out how they want to move it.

I would imagine you would see 2 for 1 deals, free downloads, and all kinds of other schemes where sellers would take a loss on the low cost music to see higher profit margins on the higher cost tracks.

All I can say is... stop letting the labels set the retail prices, let competition and demand dictate the price. It's worked for almost every industry since the dawn of trade and there is a good reason, it makes everyone happy because they feel like they are getting a fair deal.

Re:Sometimes happens

[MightyMartian]

How is Apple being monopolistic? You can play straight MP3s on an IPod. As much as I think the Apple fanboys are pack of twits, the Apple anti-fanboys are every bit as stupid.

Your computer doesn't have an optical drive?

[Cajun Hell]

the only way to buy digital music for the iPod was from Apple

WTF? This isn't 1992; CD-ROM drives are ridiculously affordable, and even Macs aren't locked into Apple-brand drives. This guy is wacked if he thinks iTMS is the only place where someone can buy digital music that can be loaded onto an iPod. Even Sony has been selling it. For decades. Without any DRM.

Morals aside - what's the end result?

[Nerdposeur]

I have no problem whatever making life miserable for thieves and miscreants like those bastards who run the entertainment industries.

In context, I presume you mean pirating their work. Without getting into a moral argument, I do think you should consider the practical effects of your behavior.

We all know that labels screw artists and DRM is bad and blah blah blah, but what happens if your favorite action films cost $50 million to make, but suddenly all of the customers have "digital content wants to be free" philosophies?

Frankly, if nobody pays to see movies, no movies will get made - or at least, only cheap movies where the person making them can afford to eat the cost. No more magical Hollywood special effects. You're not going to see Lord of the Rings get produced under a Creative Commons license.

Even if the whole business isn't "respectable" by your standards, you obviously respect their work enough to watch it. To never pay is to vote for a world where that work is never produced.

Re:Morals aside - what's the end result?

[Anonymous Brave Guy]

Even if the whole business isn't "respectable" by your standards, you obviously respect their work enough to watch it. To never pay is to vote for a world where that work is never produced.

It's a shame my mod points just expired, or you'd have had one.

It's about time a few people around here realised the hypocrisy of advocating piracy as a counter-strategy to DRM. If you don't like the way the material is offered, fine, vote with your wallet and tell people why. That's your right. But watching the films and listening to the music anyway just says you want the stuff but aren't willing to pay for it like everyone else.

Re:Morals aside - what's the end result?

[deathy_epl ccs]

We all know that labels screw artists and DRM is bad and blah blah blah, but what happens if your favorite action films cost $50 million to make, but suddenly all of the customers have "digital content wants to be free" philosophies?

This argument has no basis in reality, though... people are not going to universally stop paying to go to the movie theatre, and they're not going to stop buying DVDs.

I remember another industry that piracy was going to kill. It used to be called the Video Game industry, and man, were they cool. When we were kids, we used to play the darned things all the time. Unfortunately, rampant piracy put them completely out of business and there are no more video games.

Of course, in reality what's happened is that the video game industry has become one of the biggest modern growth industries there is... and you know what? People are still pirating the games too.

I'm not coming out for or against piracy here, but when we have these discussions, we should at least try to look at things from a realistic perspective instead of dogmatic positions.

Re:Morals aside - what's the end result?

[Ash Vince]

Frankly, if nobody pays to see movies, no movies will get made - or at least, only cheap movies where the person making them can afford to eat the cost. Some of us actually prefer low budget, made for the love of it movies just like you describe.

One example that springs straight to mind is Clerks. I far prefer this to any of Kevin's more recent works. I still like his more recent stuff like Chasing Amy, but it does not hold a candle to the film he made just for the love of film.

Another example which is not so well known is El Mariachi (http://www.imdb.com/title/tt0104815/). This is the forerunner to Desperado but is far superior in plot and storyline. It lacks the huge explosions (no rpg firing guitar cases) but this is not a loss in my opinion. Far too often the drive to spend huge amounts of the studios money on special effects actually detract from other areas of the film that usually have much longer lasting appeal.

Another problem with Hollywood movies is the actors. They frequently bitch and moan trying to get their own role "enhanced" just to get their useless overpaid faces on the screen for more time since this will increase their future earning potential. Or they try and get less well known actors with far more talent entirely removed from productions or their scenes cut if they are clearly better actors and show them up on screen.

Usually the director will have to go along with a certain amount of their whining in case they threaten to walk off set. Unless the director is more well known than the actor quite frequently the lead can get their part substantially changed on a whim.

Then there is the studios notoriety at tax avoidance. You do not get a type of accounting named after you for nothing:

http://en.wikipedia.org/wiki/Hollywood_accounting

So even after all this you want me to feel sorry for them if they go out of business? Be serious.

The fact is that there will always be an entertainment industry, since people love to be entertained. If the current form of it died out it would be replaced by something else since someone will always fill that gap and try and make a few pennies out of us in the process. This is not a bad thing, but trying to just skip to the pennies without providing original entertainment first is.

I say original in the previous statement because of the number or sequels or remakes that Hollywood turns out. But this rant has gone on long enough so lets not start on that.

Re:Morals aside - what's the end result?

[Sancho]

But watching the films and listening to the music anyway just says you want the stuff but aren't willing to pay for it like everyone else. Well...yeah.

Here's the thing: copyright is a balance between the insanity of allowing ideas to be owned, and the insanity of few people creating art because we need to eat. To maintain that balance, the government (the people) struck a deal with content creators--they get a limited monopoly on their work in exchange for creating it in the first place. But eventually, the people get the work, as they should, because owning ideas is idiotic.

Unfortunately, the content creators don't feel the need to honor the deal--they just want to own the ideas outright, forever and ever. I don't particularly blame them--everyone's always looking out for number 1--but the fact remains that they're violating it every time they ask for extensions.

It's not unreasonabe to wonder why one side should agree to a deal that the other side is violating.

The key is that it has nothing to do with the content. A boycott is generally useful for when you don't like what someone is saying, or even how they're saying it. Copyright is a weird beast that really doesn't fall into either of these areas.

Re:Morals aside - what's the end result?

[dwandy]

Frankly, if nobody pays to see movies, no movies will get made

I guess all that TV I watch is just my imagination hard at work? 'Cause I haven't paid for any TV content (the signal, yes if you have cable/satellite, the content is paid by ads)

Don't confuse "how it's financed under the current system" with "the only way content will get financed"

Beyond that, you're also ignoring the fact that large percentages of the costs of making movies is clearing copyright -- if movies get made using cc content, then they won't cost what they do now. Furthermore, there is nothing that Actor-X does that makes him worth $20-million for a movie. He gets paid that because there is an expectation that the movie will make enough to pay him that. Stage actors make working-type wages (since that is what stage can afford to pay) and they are still able to attract talent. Clearly if movies make less in general, the Big Name Actors and Big Name Producers and Directors will be the first to take massive pay cuts. That doesn't equate to "no more movies being made"

And then the final question I always ask is: who cares if they don't make $100million films any more? If we actually care about the cost of a movie, then the question of "what could we do to make sure that $500-million movies get made?" becomes an equally valid question. Or perhaps 25% of the GDP should be directed at movies to make sure that multi-billion-dollar movies can be made?

Purely speaking, "cost" isn't really a factor in determining the artistic merit, or even quality. "Relative cost" seems to be positively related to quality (roughly), but still no relation to artistic merit.

So if the "cost" bar lowers from $50-million average movie to $1-million, those movies will still have excellent quality - the actors et.al will just be driving Toyota's like the rest of us instead of picking out the Porsche-du-jour.

Re:Morals aside - what's the end result?

[Anonymous Brave Guy]

I'm not coming out for or against piracy here, but when we have these discussions, we should at least try to look at things from a realistic perspective instead of dogmatic positions.

I believe you're missing the underlying ethical implication of the GPP. The point isn't that it's realistic for everyone to suddenly stop watching movies. The point is that for a behaviour to be ethical, it has to remain realistic if everyone in society did choose to act the same way. In this case, if everyone ripped content illegally and no-one paid for it, there would be very little content available for anyone. That means that the people who do act in that way today aren't just getting the content for free; they're actively taking advantage of everyone who does play by the rules for their own selfish benefit. The more people who choose to follow that path, the worse things get for everyone, and such a policy is unsustainable.

Re:Morals aside - what's the end result?

[grimwell]

In this case, if everyone ripped content illegally and no-one paid for it, there would be very little content available for anyone.

Maybe more content would be created... have you heard of the Grey Album

Or maybe

When in the chronicle of wasted time
I see descriptions of the fairest wights,
And beauty making beautiful old rime,
In praise of ladies dead and lovely knights,
Then, in the blazon of sweet beauty's best,
Of hand, of foot, of lip, of eye, of brow,
I see their antique pen would have express'd
Even such a beauty as you master now.
So all their praises are but prophecies
Of this our time, all you prefiguring;
And for they looked but with divining eyes,
They had not skill enough your worth to sing:
For we, which now behold these present days,
Have eyes to wonder, but lack tongues to praise.

--William Shakespeare Or put another way...

Immature poets imitate; mature poets steal.

--T. S. Eliot Strengthening the author's side of the copyright agreement is a folly. It is society's side that needs to be restored.

Re:Morals aside - what's the end result?

[stefancaunter]

Excellent example. People don't copy stuff they don't like. People who copy movies watch movies. People who copy music listen to music. People who copy games play games. Don't do this work if you don't want people to copy your stuff. Go work somewhere where what you do won't get digitized and copied. Clean the floor somewhere. Cool. Can't copy that. Otherwise, shut up. People like what you do. You have an audience. Congratulations. That's what you wanted. Oh, you want money? Do us a favour and pick another line of work. An artist wants an audience. A business wants money. Go into business. Sure, by all means, go in to the business of attempting to sell easily digitized and copied art. Just stop calling yourself an artist. An artist wants an audience. Everyone else just wants a paycheck.