To DRM or not to DRM

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Music 2.0: To DRM or not to DRM
By Jim Welte - MP3.com
February 2, 2007 at 03:23:00 PM | more stories by this author

At a conference in Los Angeles, use of copy protection technology on downloaded music dominates the discussion.

Throughout the two-day Music 2.0 conference in Los Angeles this week, digital rights management (DRM)–technology applied to downloaded music that restricts what a user can do with it–dominated the day.

An anti-DRM poster.

It is a seemingly never-ending debate for the music business: how to make sure everyone gets paid in a world where digital files are easily shared, but doing so in a way that does not overly restrict or confuse the average consumer.

As it stands now, music bought on iTunes won’t play on anything but an iPod.

Music bought on services like Napster and Yahoo Music won’t play on an iPod.

Even music bought from MSN Music won’t play on the new Zune device, despite the fact that the MSN and Zune are owned by the same company, Microsoft.

It’s a situation with which no one in the industry seems satisfied, and everyone from label honchos to the digital music execs have hinted that DRM is hurting the business. Meanwhile, European governments and US consumers have suggested that iTunes’ FairPlay DRM unfairly restricts users.

One of those people, Yahoo Music President David Goldberg, sought to downplay his comments from last year’s Music 2.0 conference, instead saying that he thinks more major labels will be willing to test sales of DRM-free MP3s this year.

In 2006, Yahoo teamed with labels like Sony BMG, EMI/Blue Note, and Hollywood Records on MP3 sales for artists Jessica Simpson, Norah Jones, and Jesse McCartney, respectively.

Yahoo has been tight-lipped to date on the success of those tests. But in a Music 2.0 keynote speech Wednesday, Larry Kenswil, president of Universal Music’s eLabs division, suggested that sales of the Jones MP3 were low.

“Ask [Goldberg] how much Norah Jones has sold in open MP3, it might be an interesting answer,” Kenswil said.

Norah Jones

In his own keynote Thursday, Goldberg declined to give details on how the Jones MP3 sold, saying only, “We’ve had a series of experiments. They’ve all gone extremely well and you’ll see a lot more coming. I don’t think tomorrow you’ll see every song being sold as an MP3, but you’ll be seeing a lot more of it, that’s for sure. There will be a significant portion of our content that will be available in MP3s by Christmas time. I can’t say what portion or which labels, but that’s what we believe.”

Several execs emphasized that it is not the DRM itself that is the problem, but the lack of interoperability between the DRMs of the various players like iPod/iTunes, Zune, Napster, Rhapsody, and SanDisk, among others.

“DRM itself is not the enemy,” Albhy Galuten of Sony said. “Very few people complain about the copy protection that exists on DVDs. The problem with DRM in the music space is a terrible music experience and lack of interoperability.”

Galuten has been working to develop interoperability standards through a multiconglomerate organization known as CORAL. But whether those standards will take effect in time for the music business, which is struggling to sell digital music at a pace fast enough to counteract falling CD sales, is the big question.

Pedro Vargas of MP3 player maker SanDisk, whose company has teamed with Rhapsody and Best Buy to create its own integrated digital store and MP3 player, perhaps summed it up best.

“I’ve been hearing that DRM is going to go away for 10 years now, so…maybe this is the year,” he said. “It’s one of those things that we wish would go away but we all wish it would not go away.”