Can we do without digital rights management?

by on February 12, 2007 at 11:00 am in Music | Permalink

Steve Jobs claims to think so, and EMI might abolish it.  It could be said that the music companies never adopted the idea in full, recall the compact disc?  Burning compact discs is remarkably easy, and that practice remains the biggest copyright problem, not illegal downloads.  Someone who burns a whole disc is more likely to otherwise have bought it, compared to someone snatching songs off the web.  Of course, for all the complaints, the era of compact discs has been entirely acceptable for music companies.

DRM is a tax on digital consumers, compared to the low de facto restrictions put on CD buyers.  So why not equalize that margin, especially since digital sales have lower overhead?  Admittedly piracy is easier over the web, although for teenagers the difference is smaller than you might think.  I believe that at this point a person is either an illegal downloader or not.

The deeper question is whether the move away from DRM might cause the dominant position of iTunes to unravel.

Randy Picker February 12, 2007 at 12:06 pm

I don’t think that fully captures what is going on here. DRM is part of the music industry’s format transition. The industry would be happy to equalize the tax by adding DRM to CD’s but that has been a fiasco.

I have more on all of this at http://uchicagolaw.typepad.com/faculty/2007/02/razors_and_blad.html

goodnessoffit February 12, 2007 at 12:38 pm

I recently started using eMusic. It is 100% DRM free and I get the racks for about 30 cents each. None of the Big lables are there but tons of indies (even the big indies that are not really indies) are there and I have not gone a month without exhausting my allotment.

A friend uses the Rhapsody service and pays about what I pay per month, and is equally pleased with it. There is a ton more form the Majors there.

Both of these represent the way it should be, in the digital music age. If you interested in trying out eMusic can poke around the web and find a free 50 or 100 downloads offer somewhere. I don’t work for them BTW, just a happy customer.

Giovanni February 12, 2007 at 2:01 pm

I’d really like to see Tyler Cowen or another from the econ blogging elite actually add something insightful to the DRM debate.

I’ve read thousands of op-eds and opinions and discussions on this, but they always lead to the same predictable and unsatisfying conclusions.

theCoach February 12, 2007 at 4:21 pm

ONe more hopefully related post on IP, especially with regard to entertainment.

Without government IP protections, big industry will likely attempt their own implementations (assuming that it is not prohibited by government).

DRM is industry effort *on top* of existing legal protections. It is hard to guess how much energy (more or less even?) would be spent if the government was not providing a backstop.
My best guess is that industry would first expend enormous resources in an ulimately failed attempt, and eventually only a very small amount of revenue could be demanded for easily reproducible entertainment. I also think that musically, things would probably get better, not worse (for sure, I could be wrong). Movies would probably get less professional but on average more interesting. Interesting might turn out to be a euphemism, though. One thing that would be interesting would be to see if there was the return of patrons of the arts. For example, would a billionaire fund a 100 million dollar epic movie as part of his legacy – what would the result look like. Fascinationg to imagine I guess, but I am not a recording executive.

jaywalker February 12, 2007 at 6:41 pm

“Would a billionaire fund a 100 million dollar epic movie as part of his legacy – what would the result look like:”

The Phantom Menace?

Peter February 13, 2007 at 4:13 am

Of course, it should be noted that as a business proposition The Phantom Menace was a fantastically successful venture for George Lucas and Co.

tTt February 13, 2007 at 9:54 am

solcum,

how have digital downloads not taken off in a big way? Apple is the fourth or fith largest seller of music selling only digital downloads while the other top sellers sell cds.

i agree that tyler’s post did not much to freshen this debate, but see The Effect of File Sharing on Record Sales in the new JPE by Oberholzer-Gee and Strumpf. They find that file sharing does little to affect the sales of CDs.

One thing I would very much like to see is a sales comparison of “indie” songs that are sold via emusic for ~ $.30 without DRM and on iTS for $1 with DRM.

We need more data in this discussion and less demonizing, apple, DRM, RIAA. Even if 2 of the aforementioned deserve to be demonized.

tTt February 13, 2007 at 4:34 pm

slocum,

i completely agree with your last point. and it is so painfully true and yet some how not obvious to many until jobs pointed it out, and yet still people seem to want to argue about jobs motives and preferences rather than tackle the bit about sales of things without DRM.

i am an emusic subscriber. i have also made a couple purchases from iTS (almost all with gift cards). my friend is also an emusic subscriber. his frequent claim is that the reason that more people are not downloading from emusic is that the shopping experience is more complicated than iTS.

and you would be right to point out that the market share of emusic is tiny in the overall music market. but i still think there is a lot to be learned by comparing emusic and iTS sales of the same tracks.

Cannon July 28, 2007 at 9:56 pm

To DRM or not to DRM is that really the question? The true root of the issue is artist compensation. Until a new model comes about, consumers and fans (big difference there to me) are stuck with the current situation. Jobs is pro-DRM… he just wants it to be his DRM. Ever tried to play an iTunes track on a non-Apple device?

We are working on a new model that will be debuting this fall. If you are in or around St Louis in late September, stop by the Play:STL Festival… Sept 21-23.

jad games February 9, 2010 at 1:18 pm

thank you very much for this articl

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