Sony BMG + MP3 - DRM = Amazon

Sony BMG has given us all a roller coaster ride over the last week and half or so. They announced they would offer DRMless MP3s, and we all cheered. Then they announced their ill-conceived MusicPass initiative and put the fear into us all that was all they were going to do. Some even went so far as to say they were *trying* to fail with DRMless MP3s... "hey, we tried it and no one bought them so now put the shackles back on!"

Now there is a collective sigh of relief that they have, in fact, signed with Amazon to make their catalog available sans DRM at everyone's favorite online retailer.

Sony BMG Will Allow Amazon to Sell Its Music Without DRM | Listening Post from Wired.com: "Sony BMG made history Thursday by becoming the fourth and final major label to allow its music to be sold without digital rights management, issuing a announcement that Amazon.com's MP3 store would start carrying music from the label by the end of this month."

Phew, disaster averted....

2008 Digital Media/Music Predictions

I have been remiss in making my 2008 Digital Media/Music Predictions this year. Instead of putting it off until I could formulate some well-thought predictions, I figured I'd take the more lax approach this year and go stream-of-consciousness (and slightly tongue-in-cheek).

As a reference, here are my 2007 Predictions. Now, on to 2008!

• Apple launches a subscription music service (of one form or another). Dark Horse/Long Shot but I'm putting it out there.

• Rhapsody & Napster... "there can be only one!". Napster continues to run out of cash and sells subscriber base off to Rhapsody.

• Amazon siphons off all of eMusic's userbase - eMusic goes up for sale. Potentially to a major label - or a consortium of them?

• The Beatles *finally* make their digital debut - on iTunes. Apple sells millions virtually overnight. That's my "lock of the week".

• AmazonMP3's affiliate program takes off as their catalog of DRMless MP3's from all 4 major labels grow - virtually every site with music content moves to Amazon as primary affiliate partner (and away from iTunes) due to better terms from Amazon.

• Open Standards for music and taste portability finally start to make inroads (see www.openmediaweb.org).

• SoundExchange becomes successful in drastically increasing royalty rates for online radio (retroactively) - they put massive number of broadcasters our of business (and forcing companies like Pandora to change their product and/or business model or shut there doors), see a proliferation of "gray" services that don't pay royalties directly, and collect a fraction of royalty payments then they did before they raise the rates.

• Slacker is acquired - by Microsoft or Motorola. Their hardware/satellite delivery platform is integrated into a more holistic product line.
  

• The major labels (while tentatively supporting DRMless MP3s) will still screw around and not giving users what they want - by forcing users to jump through additional hoops to get the MP3 versions. I cheated on this one since Sony BMG just tipped their hand on this "plan".

• While 2007 saw explosion of new "media & music 2.0" companies hit the market, 2008 will be the year of the great shakeout. Smaller existing "music 2.0" companies are acquired - funding gets tougher to come by for new ones.

• AOL completes their "transformation" to become an ad network - they try to sell off their audience/portal business at bargain basement prices. There are no takers. On a related note, they sell off the AIM business to Facebook. What the hell, every once in a while you have to close your eyes and throw a dart.
  

I'm not going to make predictions on the work that I'm doing (it wouldn't be so much a prediction as a breach of confidentiality) but look for some very cool things out of MyStrands in 2008 too. :-)

What do you guys think? Anything to add? Anything that jumps out as you as "are you smoking crack?!".

MusicPass - Another Swing and Miss from Sony BMG

Am I missing something? Is Sony BMG forcing consumers to go to the store to buy a card that then then bring back to their house to redeem online?? Can you not just go directly to the site to buy? Add why do the labels continue to think that consumers know (or care) what label an artist is on? I don't want to have to buy my milk at one store and my eggs at another.... I want one place where I can find everything.

All of you planning to get my a gift card this year... don't get me this one. :-)

Ugh.

Musicpass: "New York, NY - Monday, January 7, 2008 -- SONY BMG MUSIC ENTERTAINMENT today announced the launch of Platinum MusicPass, a series of digital album cards that enable consumers to download full-length albums, and in many cases special bonus content, in the form of high-quality MP3 files. The first 37 titles in the series, which represent musical genres ranging from Rock and Pop to R&B and Country, will debut on January 15th, 2008 and by the end of the month will be available at 4,500 retail outlets across the United States. In Canada, MusicPass will debut in late January of 2008.

UPDATE: So, ValleyWag *doesn't* think this idea is crazy (at least for the labels and artists). But the more I think about this the dumber it seems to me...

• If I'm buying this for myself, when wouldn't I just buy the CD instead of the plastic "trading card"? Isn't the CD inherently more collectible then a plastic gift card? It comes with whatever bitrate MP3 (or other codec) I want to rip it in, and already has all of the "extra" like album art and liner notes. Besides, I can sell it when I'm done with it.

• If I'm at Best Buy looking for a gift card for a friend, why wouldn't I just get them a Best Buy gift card that can be used for *any* CD not just one of the 37 albums they can redeem with this card? Or anything else in the store for that matter...

I sincerely hope I am missing something in this announcement, but I fear I am not.

2008: Already Turning Out to be a Good Year for Music Consumers

Ding, dong, the witch is dead! It looks like the remaining two major labels made great New Year's Resolutions and have already delivered by offering (at least some) of their catalogs available sans DRM (for a la carte purchases - subscription services is another creature).

Sony BMG Plans to Drop DRM: "In a move that would mark the end of a digital music era, Sony BMG Music Entertainment is finalizing plans to sell songs without the copyright protection software that has long restricted the use of music downloaded from the Internet, BusinessWeek.com has learned. Sony BMG, a joint venture of Sony (SNE) and Bertelsmann, will make at least part of its collection available without so-called digital rights management, or DRM, software some time in the first quarter, according to people familiar with the matter.

Sony BMG would become the last of the top four music labels to drop DRM, following Warner Music Group (WMG), which in late December said it would sell DRM-free songs through Amazon.com's (AMZN) digital music store. EMI and Vivendi's Universal Music Group announced their plans for DRM-free downloads earlier in 2007."

Time to buy Amazon stock?

UPDATE: I just saw TechCrunch's headline (also referencing our favorite witch-melting ditty). I swear I didn't see that before I posted, but I get a kick out of the fact that so many people have that same view of (and imagery) of DRM...

In Over Their Radioheads - Technically Speaking

I love what Radiohead is doing with their name-your-own-price, flip-off-the-record-industry, new DRMless digital album. It (sort of) went live this morning at www.inrainbows.com. I firmly endorse their DIY stance on the sales, distribution and marketing of this album - and when it's all said and done I think it is going to make them a fortune. Even if you only pay a couple of bucks for it, virtually *all* of that couple bucks goes in their pocket. That's roughly equivalent to all they would see on the sale of a $15 CD released and distributed by a major label. So, worst case they basically get what they would have gotten... best case they get about 10x what they would have gotten in their old deal. Granted, these numbers are very rough (someone from the label side of the business can better model this for sure), but you get the picture.

The problem? It appears their DIY stance is crippling them technically speaking. I've been on the site for the last 20 minutes trying to buy the album. You can practically see smoke coming off of the site as it tries to handle the load. I don't know who built/is running the "store" part of the site but I can only imagine a couple of guys running around with their hair on fire with scotch tape and bubble gum trying to piece Humpty Dumpty back together again.

* Pages are taking minutes to load
* Ugh... prices are only in british pounds. Time to do some conversion... off to another site.
* I just had to enter my price 3 times before it would "stick" (for what it's worth I'm paying 2 Pounds plus the 45 pence service fee, or roughly $5)
* Ugh, now I have to register... more pages to load
* OK, got it... it's a zip file
* Extracted and imported into iTunes
* Listening!
* 160kpbs MP3? Really, that's it?! Amazon is giving us 256kbps. Incomplete metadata (track 1 of ___), no album art.

It is sounding pretty good. But all in all I would have preferred to a storefront in Amazon.

UPDATE: Apparently most people aren't having as many issues as I had. In fact, check out today's playcounts by the MyStrands community.

Drowning Victims - Sink or Swim?

A couple of months ago a wrote a post (The King is Dead (and has no clothes). Long Live the King) about my coming to terms with the failures inherent in the current music subscription models. Or, more specifically, the failures caused by the convoluted DRM requirements inflicted by the major labels onto their partners and thereby passed along to the consumers. Well, the list of people that have been frustrated beyond repair by this short-sightedness is Ian Rogers - GM of Yahoo Music.

Ian just presented at Digital Music Forum West and had a wake-up call for the industry. Some good stuff in here... you should read the whole post.

Convenience Wins, Hubris Loses and Content vs. Context, a Presentation for Some Music Industry Friends at FISTFULAYEN: "I’m here to tell you today that I for one am no longer going to fall into this trap. If the licensing labels offer their content to Yahoo! put more barriers in front of the users, I’m not interested. Do what you feel you need to do for your business, I’ll be polite, say thank you, and decline to sign. I won’t let Yahoo! invest any more money in consumer inconvenience. I will tell Yahoo! to give the money they were going to give me to build awesome media applications to Yahoo! Mail or Answers or some other deserving endeavor. I personally don’t have any more time to give and can’t bear to see any more money spent on pathetic attempts for control instead of building consumer value. Life’s too short. I want to delight consumers, not bum them out."

AOL and Yahoo *should* have been able to become the de facto destinations for play-on-demand music. Both companies are good corporate citizens - have ad supported and paid music services - and play by the letter of the law (generally speaking). But, by doing so they have both gotten surpassed by smaller start-ups that are willing and able to take some risks (see Imeem, Project Playlist, etc.) - choosing a path where they ask for forgiveness after the fact instead of permission beforehand. It's not like there aren't exceptionally smart people at these companies (AOL/Yahoo) that haven't been whiteboarding and spec'ing out these use cases for years... it's just been that these companies have been "playing nice" with the labels and are therefore getting dragged down with them as their failed business models fill with water.

I was reminiscing this week while on vacation about my lifeguarding days back when I was a teenager. The thing I learned then that had the most lasting impact was - if you go out to save a drowning victim, and they start to pull you under to the point that your life is endangered, extricate yourself as quickly as possible and leave them to drown on their own. Better to lose one life then two.

It is a sobering thought, but one whose time has come in this space. I hear you Ian... time to head back to shore until the labels are ready and willing to be rescued.

WiFiTunes & DRM (Correction)

So, I updated by iPhone with the latest firmware so I could get "WiFiTunes" support on it (you also get a newly skinned calculator for some unknown reason). The store looks pretty sweet at first glance, but what I didn't notice was anywhere I can buy the DRMless "iTunes Plus" tracks. Are they not offered?! And if not, I can only imagine that this was purely a business decision and not a technical one?

UPDATE:

Sorry, false alarm. I did indeed fine "plus" (DRMfree) content... it appears your preferences are synced over from your iTunes client.

Also, other new features of this update include (bold added by me for emphasis):

Listed new features in this 152.3MB update include:

* iTunes Wi-Fi music store
* Louder speakerphone and receiver volume
* Home button double-click shortcut to phone favorites or music controls
* Space bar double-tap shortcut to intelligently insert period and space
* Mail attachments are viewable in portrait and landscape
* Stocks and cities in Stocks and Weather can be re-ordered
* Apple Bluetooth Headset battery status in the Status Bar
* Support for TV Out
* Preference to turn off EDGE/GPRS when roaming internationally
* New passcode lock time intervals
* Adjustable alert volume

Undocumented features There are also few new features that Apple didn’t mention:

* There is now the ability to change your voicemail password directly from the iPhone. Tap “Settings,” then “Phone,” then “Change Voicemail Password.”
* You can now change the sound that is played when a new text message is received. Tap “Settings,” then “Sounds,” then “New Text Message.”
* There is now a “Debug console” for Safari, which shows HTML errors when rendering Web pages. Tap “Settings,” then “Safari,” then “Developer”
* There are new options for Video playback. You can start playing videos where they left off or from the beginning, and you can use closed captioning. Tap “Settings,” then “iPod.”

The King Has No Clothes (and is Dead). Long Live the King.

I have been on both sides of the subscription music business. I led the product group at AOL that acquired/relaunched AOL Music Now (unfortunately dealt away to Napster) - and I have subscribed to virtually all the competitors. I have been a big fan of the value proposition that subscription music business brings - in spite of itself and all the hoops it makes consumers jump through. If you haven't already, you should read some of my (ever-evolving) thoughts about the state of the market in some of my older posts.

But, as a consumer I have recently sworn off DRM (and Microsoft products/technologies in general to a large degree, but that's a different story) - after years of trying to convince myself and others that DRM is "no big deal". Admitting you have a problem is the first step to recovery, right? The turning point for me was the realization that people (like my wife) would have a portable player full of content (that I had to put on there for her) that would never play because all of the licenses were expired. With her being only a part-time computer user, the job would then fall on my shoulders to continually manage her player, download the tracks she wanted and keep it all working. Major pain in the ass.

And yes... Apple obviously uses/has used DRM for a long time too - but to their credit, they simplified the model so that you would never run into the issue of "dead" content on an iPod (since they don't do subscription they don't have to worry about renewing the licenses on a monthly basis).

I still give Rhapsody my $15/month - although I'm not sure for how long considering I broke down and got an iPhone (more on that later). Their issues (and those of the new "Rhapsody America") are the same as they have always been... subscription content doesn't play on an iPod/iPhone. And who in the marketplace doesn't want/have an iPod or iPhone? It's like the kids 30 years ago who's parents bought him a "Magnavox Odyssey2" video game system when the rest of the planet had an Atari 2600 (unfortunately, that was me).

I truly believe that a marketplace with ubiquitous high-speed IP access and multi-function mobile phones solves all of theses issues - but realistically that is still a couple of years off (keep an eye on Sprint... uh, I mean "Xohm"... and their 4G/WiMax rollout) for early adopters and probably 5+ years for the mass market.

So, until then my new digital music M.O. is iPhone + eMusic + DRMless MP3 purchases (some from iTunes even they are actually AAC files, some from gBox, some from Amazon) + free-range MP3 streaming and "acquisition" (SkreemR, Hype Machine, Seeqpod, etc.) + library sharing (via Simplify Media) + personalized streaming services (more on that soon). What the market really needs is a destination that aggregates all these options into a single place - there are a couple that are starting to do this now - and I'm sure more will follow (will it be Google?).

The two year AT&T contract that I had to sign for my iPhone will expire just as it is time to move back to an all-you-can eat subscription model....

An Apple a Day?

Rumors are popping up again that Apple could move into the subscription music business. I don't know if there is any validity in this, or whether it is just a clever ruse by Intent MediaWorks' CEO to get some press coverage, but either way it's interesting.

Media Biz Apple changes its iTune? «: "Les Ottolenghi, CEO of INTENT MediaWorks, a digital distribution system that works with peer-to-peer networks, said he’s had meetings with people from Apple and he believes the company will announce a subscription service for iTunes within the next six months. “I think Apple is seriously considering a subscription offering right now even though they will probably tell you otherwise,” he said. Spokespeople for Apple were not immediately available for comment."

When this rumor first surfaced a couple of years ago, the whispers were that it would be really hard for Apple to pull off without a major change to their iPod hardware. One of key components of a portable subscription plan is that the hardware must have a secure clock to enforce the business rules (so that you have to keep paying in order to keep listening). The word was that the iPods of a couple generations ago didn't have the secure clock, so a subscription plan from Apple at that time would force all users to upgrade their hardware. Now, a couple of years - and Nano and Shuffle models - later the boys and girls from Cupertino have had time to slowly add the required hardware components to their current product line that this could now be a possibility without alienating their entire customer base. After all, everyone has already upgraded themselves and if they haven't, isn't it just about time?

Why would they even consider it now? Well, subscription services keep you locked into a specific ecosystem - something Apple may be looking for again considering EMI's move (and the other majors possibly following) into unprotected MP3s breaks their existing lock and key of Fairplay protected tracks. Indubitably, it would be pretty cool if the iPhone rolled in conjunction with a subscription service - which by definition supports "sharing" with other subscribers. So, it's feasible that one iPhone user could "beam" tracks to another - and more.

I know lately all I do is speculate about what Apple may be up to, but given their history, when June 11th rolls around there will be far more to the story than just "iPhone now available". Mark my words.

How Price Sensitive Are You?

It should be no surprise that the recent EMI announcement has spurred lots of discussions of late. In general, most people I've talked to are excited by the prospect of buying DRM-free tracks. If you take subscription models out of the discussion, you'd be hard-pressed to find anyone who wouldn't want more rights and freedom associated with the content they buy, regardless if they ever plan to exercise those rights.

The real nut of the discussion is whether you think it is worth a 30% premium. If I bought tracks (which I don't because a subscription service better serves my needs), I think I would gladly throw down another 30 cents on each track. Or - as the labels indubitably hope will happen - I'd just buy the whole album which are offered sans DRM without the premium.

But, I think the stipulation above is the key to it all... for people that currently buy tracks, I think they will pay the premium. The real question is, will those people that don't buy pay more for the same rights and content they currently get (for free). This is very similar to the recent announcement about Rhapsody raising their prices. It's a near-term win in that they will generate more revenue out of their EXISTING users. But I'm not convinced either will actually generate more users (certainly not the Rhapsody price change).

I recently read an interesting paper by economist Will Page arguing that the price of recorded music is quickly moving towards zero. I can see the logic in the argument, but it got me wondering... we, as consumers, seem to love to pay for things that are virtually free. How does the music industry learn from this?

At work, there is free coffee provided for those who want it. Yet, everyone goes and pays $2/cup for Starbucks. Same for water.... their are water fountains all over this country. Remember when we used all drink from them? Now everyone walks right by the free water fountains on their way to pay $1/bottle for the same stuff. Why do we do this? There is some perception that the quality is better for these premium products, even if that's not the case (Consumer Reports rated McDonald's coffee higher than Starbucks, but which do you drink?).

The problem for the music industry is that virtually no one cares about audio quality (in terms of bitrate), and even less can tell the difference - particularly when listening through a pair of 20 cent earbuds, or even a $200 "home theater in a box" system. There are people who claim that audio quality matters and that they can tell the difference between 192kbps MP3s and 128kbps MP3s. Yet, if they really cared about audio quality they wouldn't be listening to MP3s in the first place (it is a very lossy compression scheme). Freedom, portability and interoperability trump audio quality every time.

Don't get me wrong, I applaud EMI and I hope that the other majors follow suit. Actually, I think the other labels *have* to follow suit for the consumers to benefit. Having different content with different rights is going to confuse the hell out of people in the near term, and unfortunately the labels suffer under the delusion that consumers know and/or care what label an artist is on (and what that label's parent company is). It's like asking a moviegoer what studio put out the movie they just watched. Why would they care?

I don't claim to have the answers, but I certainly have a lot of questions....

The Other Shoe: Amazon & eMusic?

Is the other shoe precariously dangling? Is it possible that all of this happens at once, or is this some cruel April Fool's joke that has gone on a day too long? Hypebot is now reporting that Amazon could buy (or have already bought) eMusic in the next day or so.

hypebot: Has Amazon bought eMusic? What Announcement Does EMI & Apple Have Planned For Monday Morning?: "The chatter is hot and heavy again that #2 digital download site eMusic is very close to being sold. Speculation is flying hotter than ever before that a sale is virtualy complete and that Amazon is the purchaser. Some even have an announcement happening on Monday or Tuesday. Neither company responded to Hypebot's weekend inquiries for comment."

The timing makes sense. Once the labels start selling DRM-less content, then they can quickly turn on an iPod compatible store (which would undoubtedly sell even more iPods). As for as a competitor goes, Amazon is probably the most appealing to Apple, because even if they lose (or song sales), the win (on hardware sales).

What a fun Spring this is turning out to be...

EMI, Apple & Free Range MP3s

Thud. That's the sound of the first shoe dropping....

EMI Music Launches DRM-Free Superior Sound Quality Downloads Across Its Entire Digital Repertoire

LONDON--(BUSINESS WIRE)----EMI Music today announced that it is launching new premium downloads for retail on a global basis, making all of its digital repertoire available at a much higher sound quality than existing downloads and free of digital rights management (DRM) restrictions.

The new higher quality DRM-free music will complement EMI's existing range of standard DRM-protected downloads already available. From today, EMI's retailers will be offered downloads of tracks and albums in the DRM-free audio format of their choice in a variety of bit rates up to CD quality. EMI is releasing the premium downloads in response to consumer demand for high fidelity digital music for use on home music systems, mobile phones and digital music players. EMI's new DRM-free products will enable full interoperability of digital music across all devices and platforms.

I've seen other stories saying that The Beatles catalog is *not* included in this intial release, but I'm sure as the story continues to develop today we will learn more.

I made a prediction a couple of months ago about "The Perfect Storm" involving Apple, EMI and The Beatles. I originally predicted this to all happen in February, but know I have a sneaking suspicion that the June 11th iPhone release date would make a great day to announce The Beatles catalog availability...

Major Labels' Digital unStrategy

A couple of weeks ago I attended the Digital Music Forum East conference in New York. There were some very amusing and enjoyable debates (albeit few surprises), with many conversations - if not most - focused on "To DRM or to not DRM" and licensing ("we want more, even if it is of less").

Reuters was obviously covering the same conference as well, and have basically summed it up in this story:

Record labels' digital strategy -- do nothing - Yahoo! News: "So what are labels doing other than licensing their music to digital services that they hope will become successful? According to many service providers and industry analysts, the answer is -- nothing."

One thing that I found very useful in the conference was the use of Mozes. Basically, there was a large screen on stage during all of the keynotes that had an SMS number and code displayed. Attendees could send questions and comments to that number and within a few moments would be displayed on screen.

In some ways it's reminiscent of the PartyStrands service from MyStrands. Although they are focused on bars/nightclubs and giving the crowd a way to interact with each other, influence the DJ and basically create a temporal music micro-community.

Yahoo Music Shakeup

Industry shake-up.... Yahoo's Music group is undergoing a changing of the guard. It will be interesting to see what effect it has on their strategy and commitment in the subscription music space.

paidContent.org: The Economics of Content: "two of the longtime fixtures at Yahoo’s music group have resigned, and the company says it is for personal reasons. Dave Goldberg (VP) and Bob Roback (GM), both of whom came into Yahoo through Yahoo’s acquisition of Launch in 2001, are out, and Vince Broady, Head of Entertainment and Games at Yahoo, is overlooking the division now as part of his broader responsibilities. "

For the record, Goldberg has long been a proponent of abolishing DRM, and perhaps he just got tired of waiting?

UPDATE: Techcrunch is actually reporting that they are hearing rumors that Yahoo may be looking to divest of some/all of their music properties.

Deja Vu DRM

If you look around the room and don't see any crazy people, then you might be the one that is off his rocker. I'm baffled by this announcement from Microsoft....

Microsoft Announces Breakthrough Technology Enabling Simple Access to Broad Set of Digital Content, Including Music, Games, Video, Ring Tones and Pictures: Microsoft PlayReady powers next-generation media experiences on mobile networks; mobile: "Microsoft PlayReady technology enables a broad spectrum of business models such as subscription, rental, pay-per-view, preview and super-distribution, which can be applied to many digital content types and a wide range of audio and video formats."

They are introducing a new DRM scheme that they are promoting to content distributors and device manufacturers - this is after they just royally screwed everyone in the portable media player/music space by basicaly abandoning "Plays For Sure" in favor of their own closed-DRM ecosystem around the Zune. They are also said to be working on a Zune Phone, that would then compete with all of the phone manufacturers that they are pitching "PlayReady" to.

Fool me once Microsoft..... you won't be fooled again.

UPDATE: There is an interesting exchange between Wired and a Microsoft spokesman on the subject here.

The Beatles + EMI + iTunes + Unprotected MP3s = The Perfect Storm

Not that I need to tell you guys, but things are moving fast in the digital music space. The DRM dike is springing leaks and Edgar Bronfman doesn't have enough fingers to plug the holes...

Are we in the making of a perfect storm? Let's look at what is going on:

• Apple wants to sell unprotected tracks
• EMI is seriously considering going DRMless, and have recently done some tests with Norah Jones and other acts
• EMI is said to be hurting finanically and need to do something drastic to feed the bottom line and make their quarterly numbers
• Apple and Apple (The Beatles) are finally over their feud - with Apple (iTunes) getting a 3 month exclusive window to sell the Beatles catalog
• When Jobs introduced the iPhone, the Beatles were what was playing
• The Beatles catalog has been in the process of being remastered for digital distribution for some time (per George Martin), and rumors that they would be complete early this year
• The Beatles are on EMI
• Apple is said to be having an event at the end of the month (Feb. 20th) for some Beatles-related announcement

You see where this is going, right? Steve Job's is going to stroll on stage and announce that iTunes has the entire Beatles catalog... and it is available as unprotected MP3s. The flood gates open, they sell billions of tracks, EMI makes a boatload, the digital music consumers go crazy, everyone that isn't yet a digital music consumer becomes one, Apple sells a billion more iPods. Kaboom!

Hold on to your seats... this could be the big one.

More Thoughts on Jobs' Thoughts

So, I was trading emails with a very smart music-technologist/friend of mine on the topic of "what happens to Apple in a DRMless world", and he brought up some very interesting points. I'd love to share his whole email, but I'll leave that to him if he wants to post it (here or somewhere else).

To paraphrase, he thinks that by getting Apple to (help) convince the labels to go DRMless, the boys in Cupertino would benefit in a number of ways:

• it makes the pending European lawsuits around Apple's closed-system a moot point
• it also deflects much of the bad press that Apple has been getting recently about their closed system onto the labels who inflicted it upon them
• it shuts the labels up who are complaining that Apple has too much influence
• it completely undercuts the subscription music business model
• it could be a death blow to companies like eMusic - Apple could quickly turn on unprotected indie + major content, it may take eMusic longer to do so

I think these are some good points, although I'd argue the point about it killing subscription services. I agree that a move like this would force the subscription guys to re-tool their model slightly. For example, the $15/month "to-go" models would not be sustainable in a world where users can sync and burn any track they get as often as they want. But, it *may* enable some interesting moves around marketplaces that support variable pricing of tracks (for example, Amie Street prices tracks based on their popularity).

Ultimately, what I think it would do is create subscription and/or advertising play-on-demand streaming (only) services. All of a sudden, those services whose content and links are most widely syndicated (Rhapsody and Last.fm come to mind) can flip on a model where for a small fee ($5/month?) anyone that stumbles across one of their playlists, charts, widgets, etc. can stream all songs in their entirety. Obviously, you could go to their destinations as well and listen all day long. If you want to take a song "to-go", then you pay for them and download an unprotected track at $1/pop (or less). While this could also be done with some of the free streaming services like Streampad, Webjay and others, what you lose with those is Quality of Service.... I'm a fan of those services, but the fact that I often hit dead links has me wondering how long before consumers get fed up (like back in the Napster 1.0 days where half the files you downloaded were corrupt, sounded horrible or were not the track they pretended to be).

As with most of my posts, this opinion is a work in progress, but I'd be interested in what others think.

Steve Jobs - Thoughts on Music

Steve Jobs has just posted an open letter to the major labels telling them to free their content and sell unprotected MP3s.

Apple - Thoughts on Music:

"The third alternative is to abolish DRMs entirely. Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat. If the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM-free music on our iTunes store. Every iPod ever made will play this DRM-free music."

The main points he makes are:

• You can't be succesful licensing DRM schemes since the more widely distributed they are, the easier they are to crack (since more people know how they work)
• In his estimation, less than 10% of all music sold is unprotected (read: CDs) and requiring the digital providers to enforce it while the physical media doesn't won't solve the music industry's problems

I think both are valid points. Where it gets a little more sticky is with subscription services.... totally unprotected all-you-can eat would undoubtedly require a different business model than $15/month. Basically, most would need to move to a model more closely aligned to a wireless carrier model where you purchase the right to use X minutes (or songs)/month. Some providers may choose to have these be use-it-or-lose it credits, while others may offer rollover credits.

I'm sure I'll be thinking about this more tonight, and may add some more thoughts later....

instructables : Convert DRMed WMA files to Usable MP3s

instructables : Convert DRMed WMA files to Usable MP3s

It looks like FairUse4WM is resurfacing again. Above is a link to an article that walks users through the process of stripping Windows Media DRM off of either subscription or purchased tracks, convert them to MP3s and add ID3 tags. I've never tried it (honestly!), but I know that some people have been asking how to do this... particularly those that are coming from a subscription service that is being absorbed (e.g. Music Now and Virgin).

I will continue to subscribe to one of these services once my Music Now account disappears, but I'm not excited by the proposition of having to redownload the thousands of tracks I currently have... let alone having to re-sync them to all of my different devices.

As I've said before, even if I could unlock all of my subscription tracks, I would *still* subscribe (as I believe most current subscribers would do). That is because the value to me is having easy access to everything that is NEW - as well as benefiting from the really solid programming and discovery mechanisms that most of these services have built.

When all is said and done, services are worth paying for, if they provide value and guarantee Quality of Service. Back in the day, I sold a first generation DirecTV box for a premium to a friend of mine because they were easy to find pirated smartcards that would unlock virtually every channel. My friend did this for a while, but after a while it just became a pain in the ass to reprogram it every few weeks to keep up with the latest changes. Guess what he does now.... he pays for the services he uses, becauses it's easier.

If you are looking to try this yourself, just google for "fairuse4wm.exe" and you can find version 1.3 pretty easily.

The Great MP3 Experiment

Rumor has it that one of the major labels is going to release some unprotected (yet watermarked) MP3s into the wild, and then are going to study what percentage of the illegally traded content was from digital downloads versus pure-and-simple CD ripping. What I would expect to see is that the vast majority of pirated material is actually coming off of the CD sources themselves - if the labels realize that as well, then this may be what starts the DRMless trials in earnest.

It will be fun to watch....