In response I'll quote from the article:
Other online music retailers say they're worried that following Apple's lead will confuse customers who may already be baffled by a crazy quilt of restrictions that envelop the industry.
This logic is unsound to the extreme. The baffling aspect of this "quilt of restrictions" are the restrictions themselves. Removing them would remove all of the problems that the numerous DRM technologies available have created. What gets me most is that they tried copy protection a few years ago on CDs. CD copy protection scams would only work on certain players. The industry scrapped the idea because they believed that copy protection could only be used if it was compatible on all players. I cannot understand how the same logic does not apply here.
Just because the music industry has already been hit harder by digital piracy than other entertainment businesses doesn't mean it should give up the fight to protect its content, said Michael Nash, Warner's senior vice president of digital strategy and business development, speaking at the National Association of Recording Merchandisers annual convention.
This simply is not true. The major distinction that BIG MUSIC (TM) doesn't want you to make is that the recording industry is not the music industry. It is a minor facet of the music industry, which provides the end user with a copy of a musical recording. It is also the facet of the industry that has consistently not made money for the recording artists. Only one in thirty thousand releases will ever see artists recoup their royalty costs; 1 in 30K! The real money is in live performance, licensing and publishing; which never feel any major affects of piracy. Why? Because they do not provide any avenues for piracy. How do you pirate a club night, a live show, a mass-media advertisement or a film soundtrack?
The recording industry is all too happy to blame its recession on piracy while ignoring the fact that the live music industry is constantly growing each year and licensing publishing is booming. More importantly, they happily ignore that the personal computing software industry continues to grow despite a 57% piracy rate each year. If piracy really was the cause, why is the software market so healthy? It is probably because software vendors are constantly upgrading their products, mode of delivery, and services to fill the needs and wants of the consumer.
In much the same way, the recording industry needs to reinvent its service to meet consumers' needs. The first place they could start is by scrapping DRM systems. Instead of responding to the obvious need for more innovative and portable distribution methods, they label consumers, who choose file sharing over DRM infested files, as vicious criminals.
"No intellectual property business is going to cross the digital divide without figuring out how to protect its content and to ensure that transactions are associated with the acquisition of content,''
Once again, not true. They are doing so every day.
No console games ship with copy protection. Consoles do sure, but people modify them all of the time and with the increased functionality of console OS's it is becoming easier to do with each generation. Many software packages ship with nothing but a serial number, something that can be written on the face of the copied disk, thus allowing other people to install it. The majority of DVDs released ship without CSS included.
All of the above only ever really make symbolic gestures when it comes to protecting their IP and using them as an example for the music industry's stubbornness is a complete farce. The simple fact is that as soon as you create a digital file and put it online, it's going to be copied; whether you give permission or not.
"We don't want the whole world to be a college dorm. Because that's what a no-DRM world looks like--it's a world in which all product can just be cloned without limitation."
By that logic, the world has been a college dorm since the introduction of domestic compact disk recorders. I had not noticed this shift over the last couple of decades. Obviously the air is thick with bong smoke and the biggest problem our world leaders are facing now is who's going to do the next beer run. I'd really like to know how Iraq and global warming fit into Hesse's vision.
Apple's iTunes plans to provide customers a choice of purchasing EMI tracks as either 99-cent restricted downloads or $1.29 restriction-free downloads that feature better sound quality. Providing two different versions of the same music will complicate iTunes' famously easy to use interface, but the relative simplicity of the rest of the service will likely give it a continued edge over its competitors.
This rationale is simply astounding. People will not have much trouble with an extra button and a price option. When cassettes were introduced into the market, you did not see consumers walking out of record stores empty handed because they were unable to understand which format they wanted and how they bought them. In fact, it was quite common to see people walking out with a copy on vinyl for the lounge room AND cassette for the car.
The introduction of new audio formats have been the largest patron of the recording industry over the last 30 years. Record companies have reaped massive rewards by taking advantage of the replacement cycle that always follows. The reality is that the replacement cycle ended with the compact disk. It is not necessary to pay to download an mp3 version of music you already own on CD. Users can rip CD's to mp3 with the click of a button and it's all legal.
Essentially, BIG MUSIC (TM) has been able to sit on it's arse lining its pockets thanks to the replacement cycle. Now that it's over for good, they choose to target consumers - the fans of their artists - for all kinds of punishment. They should be focusing on ways to better deliver us with the music in the ways we desire it. They should be responding to the desire we all have to patronise the artists we love by buying their music. But they don't, and we can only assume it's because they want to keep their artists on 25% after recuperation of royalties.
Many of those competitors, including RealNetworks' Rhapsody, Yahoo! Music Unlimited, Napster and Viacom's Urge market far more complicated services. Their subscription plans allow users to download unlimited numbers of songs, but the tracks become unplayable once a subscription lapses. Some of their subscription plans allow customers to transfer music to portable music players, while others don't. And none of their tracks can be transferred to Apple's iPod players.
Subscriptions are definitely a step in the right direction. The simple fact is that nobody wants to own music, they just want to hear it and subscriptions should allow this to happen. However, they are still stuck between the old paradigm as music as a product and the new one of music as a ubiquitous resource. They need to provide dynamic media in these subscription services. Friend referrals and charts, micro-payments to artists per song play, additional media such as artist news, video clips, interviews and live recordings - just to name a few.
BIG MUSIC (TM) will not die. It holds a very important place in the recording industry. However, targeting piracy as the source of all of their problems will only alienate the consumer even further and eventually drive away what little support they have left. Their biggest problems are their own fault. The simple fact is that they have thrived on mediocrity for the last 20-30 years and now they are totally out of touch with their markets. They have failed to provide the service that the market continually demands.
What is resoundingly clear in their response to EMI's decision is that BIG MUSIC (TM) at large is unwilling to accept its failure to provide for the needs of their market. In order for the recording industry to sustain itself, it has to accept that music is not a commercial product. Consumers are not lovers of pop music. The long tail far outstrips the shortsighted pop music industry and makes up 80% of all music sales. Those artists are the ones who stand to be harmed most by the threat of piracy yet they are continuing to thrive.
It's time BIG MUSIC (TM) turned around and followed their lead.