DRM-Free Music Sells, Major Labels Keep Pretending The Jury Is Still Out

From Techdirt:

The idea that DRM-free music might just make good business sense smolders along, as eMusic is announcing they've managed to sell 100 million unprotected songs without the world coming to an end. As part of the promotion, the customer who purchased the milestone track will have a song written about him by the Barenaked Ladies, who'll include the song on as a bonus track for their upcoming album. The record labels have consistently claimed you can't be successful selling music that isn't copy-protected -- but eMusic's second place showing (behind iTunes) shows that's clearly not the case. They continue to sell more music than Rhapsody, Napster and MSN Music combined, all while catering to indie music fans by avoiding major label content. 2006 saw a growth in smaller content providers arguing that DRM-free content can be part of a sustainable business model, but there's still a shortage of major industry players acknowledging DRM's limitations. Meanwhile the major labels continue to pretend either that the idea has no legs -- or that they need to conduct further experiments to see if demand for DRM-free content actually exists. There simply can be no talk of a trend toward unprotected content en-masse as long as the music industry continues to pursue the idea in half-assed ways.

Here's an idea. Why don't new bands sign with distributors like iTunes and the Microsoft market place instead of with traditional labels. Then charge $.25 for a DRM free song and give 90% of that to the artist and 10% to the distributor. I think $.25 is cheap enough that people will just buy it and not pirate the music. Everyone wins in this case. The artist gets much more than the 10% of $.99 songs, and its cheaper for the consumer.

Stealing Fair Use, Selling It Back to You

"Apparently, Hollywood believes that you should have to re-purchase all your DVD movies a second time if you want to watch them on your iPod." That's what I said last week, commenting on the Paramount v. Load-N-Go lawsuit, in which Hollywood studios claimed that it is illegal to rip a DVD to put on a personal video player (PVP), even if you own the DVD.

Well, this week the other shoe dropped. According to an article in the New York Times:

Customers who buy the physical DVD of Warner Brothers’ “Superman Returns” in a Wal-Mart store will have the option of downloading a digital copy of the film to their portable devices for $1.97, personal computer for $2.97, or both for $3.97.
So you buy the DVD, and if you want a copy on your PVP or computer, you have to pay a second time. Despite the fact that you bought the DVD, and you have a DVD drive in your computer that is perfectly capable of making a personal-use copy. Imagine if the record labels offered you this "deal" for every CD you bought -- pay us a few dollars extra, and you can have a copy for your iPod. And a few more dollars, if you want a copy on your computer, too! As LA Times reporter Jon Healey puts it in his blog: "So from the perspective of the studios and federal officials, consumers have to pay for the privilege of doing the sorts of things with DVDs that they're accustomed to doing with CDs (and LPs and cassettes)."

This latest bitter fruit from Hollywood is brought to you by the DMCA, which treats "protected" content (like the encrypted video on DVDs), differently from "unprotected" content (like every audio and video media format introduced before 1996). Thanks to the DMCA, Hollywood believes fair use personal-use copies simply do not exist when it comes to DVDs.

Given that the Copyright Office has refused [PDF, see p. 71-72] to recognize any DMCA exemption for space-shifting, claiming that putting a DVD you own on your iPod "is either infringing, or, even if it were noninfringing, would be merely a convenience," (excuse me, Copyright Office, that's a decision for a court to make) the ball is now in Congress' court. Let's hope Congressman Rick Boucher is listening and will reintroduce his DMCA reform bill first thing next year.

We need to take Labels and Studios out of the equation. Take a look at the viral videos and music on the internet. They never went to a major record lable or signed a deal with a major movie studio or TV Network. By word of mouth these vidoes were able to get distributed. Thats the job of the Studios and Labels. If music and movies can become so popular virally, studios and labels can get removed out of the equation and the cost of this media can go way down. Also the producers of this content will get a much higher percentage of money earned on their media instead of 70-90% going to studios/networks/labels.

Zune Offers Credits for “Shared” Songs

From TechCrunch:

The Zune mystery thickens. Our CrunchGear rumorists have discovered that when you share a song via Wi-Fi using Zune’s three day/three play system AND the other party purchases the song later in the iZunes Music Store (IZMS), you get a credit that you can later trade in for music and media. Very clever, Microsoft, very clever.

Clearly the goal here is to create a bit of viral marketing for music and, as an added bonus, drive sales on the IZMS. As we look into the Zune more closely, it seems the MS team might have just hit on the iPod killing factors that most MP3 players have been missing thus far, although we’re still fairly excited about the touchscreen iPod rumored for this year. Perhaps a Zune/TouchPod ThunderDome is in order, with the Zune flinging DRMed pig waste at the iPod while Steve Jobs and Bill Gates act as Master and Blaster, respectively. Melinda can be Aunt Entity.