the Walls Came Tumbling Down
really, really big shoe dropped a week ago when EMI (the smallest
of the four major record companies) and Apple announced that
most of the EMI catalog would be sold at the iTunes store
free of any DRM (digital rights management) restrictions.
About 10 years ago, music MP3s made their initial appearance
on the Internet. Compact files that sounded OK could be transmitted
over the Web and played on a computer. Kids loved them. Soon
portable MP3 players appeared, de-linking the music from the
computer, and then programs and networks like Napster started
popping up, making it easy to find and download MP3s. In a
few short years, tens of millions of consumers were bathing
in a literal free-for-all of unrestrained music.
The problem was that nobody was getting paid. The stewards
of the music industry, instead of figuring out a way to tap
into this sea change of activity, brought lawsuits trying
to kill the technology. Device manufacturers, software companies,
and ultimately downloading consumers were dragged into court,
while the industry lamely offered nothing online, only CDs
at demonstrably inflated prices.
The industryís biggest bugaboo was that MP3s were uncontrollable,
and perfect copies could be endlessly reproduced. Never mind
that recorded music has long been copyable by consumers (albeit
imperfectly); never mind that the precious CDs the industry
was selling could easily be copied onto blanks, or ripped
into MP3s; never mind that it was already happening anyway.
The industry refused to sell MP3s or anything else on the
Web, and finally, faced with crumbling sales and Congressional
sniffing about anti-trust and copyright-abuse issues, the
industry allowed for there to be digital sales of its musicóbut
only on the condition that the digital files be laden with
DRM, which restrict how many times a digital file could be
copied or played, which dictate what sort of devices would
play the music, and which sometimes made a file disappear
if a buyer failed to make a monthly payment.
Meantime, a generation of music listeners has grown up regarding
CDs as irrelevant and the record companies as the enemy, and
focused on singles rather than albums. This generation canít
quite figure out why it should pay some big company for gooed-up
digital files when it can get the same track, without the
goo, elsewhere, for free.
For years the music industry has been told, loudly, what consumers
want, and the industryís reaction has been to sue them and
offer them something else. One doesnít need an MBA to see
that this isnít a winning strategy. And now itís judgment
EMIís announcement may well be too little too late, but at
least itís a step. While details are still a little sketchy,
it appears that the door will be open to enhanced-quality
downloads with sliding-scale pricing, meaning that youíll
be able to download tracks that rival the quality of CD tracks,
rather than the often thin and compromised compressed tracks
typically offered previously.
The other three record companiesí reactions so far have amounted
to a lot of unfocused harrumphing. Apparently, Apple paid
EMI a pile of upfront dough for the right to sell the DRM-free
tracks, so presumably the other labels will be closely watching
EMIís sales levels, and back-channeling demands that Apple
pay them some big bucks, too.
Meantime, there is a lot of uncharted territory, and a lot
of unanswered questions. For example, by selling unlocked
music at iTunes, music from the store will be playable for
the first time on devices other than the iPod. What is this
going to mean for all those iPod pretenders out there? And
to the iPod itself, which just hit the 100-million sales mark?
EMIís premium DRM-free tracks are still competing with free.
Clandestine downloads still outnumber legitimate sales by
at least 50 to 1, according to recent studies. Last weekend
a 22-year-old explained to me that he gets all his music from
visiting online music forums that link him to albums posted
on sites like Rapid-Share. ďKicks Limewireís ass,Ē he said.
For him the issue is the best way to get free music. Paying
is simply not a consideration.
Then there is the whole European Union thing. The EU has been
putting the heat on Apple, both for its DRM restrictions and
for the fact that iTunesí pricing varies significantly in
Europe from country to country. The recent EMI announcement
was no doubt a reaction to this, and more changes have to
be the works. Some of what happens over there will involve
straightening out the patch-work quilt of antiquated European
intellectual-property laws and arcane music-industry practices;
this will have little effect over here. But a lot of what
happens, like issues of DRM and interoperability, will have
stunning effects all over the world.
Interestingly, the EMI announcement did not include its prized
Beatles catalog, which is still not legitimately available
digitally anywhere, despite enticing hints and a lot of make-nice
noise by historic arch-enemies Apple Corps and Apple Computer.
Iím betting on a Beatles-iPhone tie-in this summer. Bet you