EMI Without DRM?

EMI says it's going to begin selling music over iTunes without annoying Digital Rights Management features on the files. Good for them. Tim Lee says if this happens "they'll have earned at least one new customer" but you can count me as a second. I don't understand why more labels don't do this. The main beneficiary of the iTunes DRM is neither the artist nor the label, but rather Apple Computer.

If you own a like of iTunes DRMed files, then you're always going to want to use an iPod as your MP3 player because only an iPod will play your files. And then, having invested in an iPod, you're only going to want to buy music from iTunes since only iTunes will play files that run on your iPod. The result, over time, would simply be to make Apple a more important music industry player than are any of the record labels. EMusic, which offers DRM-free downloads, is really a much better long-run strategy for the record labels even though so far only indie labels have been smart enough to figure it out.

Comments

"I don't understand why more labels don't do this."

Because they're quite obviously concerned about piracy. Why are DVD's encrypted?

Posted by Petey | April 2, 2007 9:25 AM

Are there any non-iPod players that play AAC files? 'Cause if there aren't, it's not DRM that locks your iTMS files to your iPod.

Posted by Aaron S. Veenstra | April 2, 2007 9:32 AM

"Are there any non-iPod players that play AAC files? 'Cause if there aren't, it's not DRM that locks your iTMS files to your iPod."

If the EMI/iTunes thing succeeds, I'm sure there will be non-Apple players that handle AAC in the future.

Posted by Petey | April 2, 2007 9:39 AM

Oi Matt, any chance of changing the web template here so that highlighted text highlights as usual (reversed to white text on blue background) instead of text just changing to blue ?
Makes it easier to read on big displays without having to force a higher contrast template on all websites.

Posted by Kilo | April 2, 2007 9:41 AM

Because they're quite obviously concerned about piracy. Why are DVD's encrypted?

But what piracy does it prevent? Name a popular EMI album I can't go get off bittorrent. I understand why labels want a system that prevents piracy, but Apple's DRM very much isn't that system.

Posted by Matthew Yglesias | April 2, 2007 9:44 AM

"But what piracy does it prevent?"

It prevents you from giving the song to your housemates. And then from them giving the song to their friends who give the song to their housemates who give the song to...

Given that well over 90% of music sales are in a non-DRM form, it has nothing whatsoever to do with BitTorrent.

Posted by Petey | April 2, 2007 9:50 AM

No, it doesn't prevent that. It just makes it slightly more time consuming. And DVDs are not encrypted to prevent piracy as such. more so companies can take advantage of pricing to market.

Posted by Rob | April 2, 2007 9:58 AM

Lots of players will play AAC files. Apple puts a DRM layer into the AAC files it sells on iTunes so that those iTMS AAC files only play in iTunes and on the iPod. But unencrypted AAC files will play on lots of different players, and one might choose to rip your cds to unencrypted AAC files over MP3 or not based on the perceived quality of sound or whatever.

Posted by Mac | April 2, 2007 9:59 AM

Kilo, in my computer, highlighting looks the way you want in both IE and Opera. What browser are you using? Firefox and Opera support site-specific styles.

Posted by Gary Sugar | April 2, 2007 10:00 AM

"No, it doesn't prevent that. It just makes it slightly more time consuming."

Making things difficult, not impossible, is the goal of all DRM. If 9 out of 10 Matthews don't share their songs with their friends because it got less easy, DRM is doing its job.

And, of course, to get around the iTunes DRM, you have to degrade song quality.

"And DVDs are not encrypted to prevent piracy"

On this one, you are utterly non compos mentis.

Posted by Petey | April 2, 2007 10:04 AM

Interesting details.

Interesting that you have to pay a 30% premium to get the unprotected EMI tracks.

Also interesting in that they're not restricting quality. Online retailers like Apple will be able to sell the tracks at whatever quality and format they like. (I've always thought the low quality of the iTunes tracks was more important to the labels long-term profits than the DRM.)

And finally, interesting that the jewels of the EMI catalog like The Beatles aren't included in the non-DRM fire sale.

Posted by Petey | April 2, 2007 10:24 AM

The Zune and the Sony Ericson Walkman-branded phones play AAC files. It's an open standard like MP3s, just not as widely supported.

Posted by Steve | April 2, 2007 10:28 AM

And from the Apple perspective, it's interesting in that this decision gave EMI enough leverage to be able to force them off of their "all songs MUST cost 99 cents" position...

Posted by Petey | April 2, 2007 10:28 AM

Matthew is correct about one thing: this is a bad day for Apple shareholders. (And a good day for Microsoft shareholders...)

Posted by Petey | April 2, 2007 10:30 AM

The main beneficiary of the iTunes DRM is neither the artist nor the label, but rather Apple Computer.

So why has Steve Jobs been the most outspoken critic of DRM? I'm genuinely curious, but I suspect he is taking a longer view of who the "beneficiaries" truly are.

Posted by right | April 2, 2007 10:40 AM

I have to hand it to Steve Jobs. He's found a way to take the high ground on DRM and at the same time create a market experiment where DRM may very well win. Most iPod customers might very well turn up their noses at DRM-free music to save 30 cents per song.

Posted by henry evans | April 2, 2007 10:50 AM

I wonder if this move doesn't have something to do with a desire on the part of the powers that be to fight the mp3 standard? Why not, in other words, just sell mp3 files, if you're going to going 9/10ths of the way and sell DRM-free AAC files?

Posted by Krudge | April 2, 2007 10:51 AM

Most iPod customers might very well turn up their noses at DRM-free music to save 30 cents per song.

I strongly doubt this, especially when jettisoning DRM will make it easy to go "halfsies" in your music purchases, thus making the expensive stuff actually cheaper. Plus, the DRM-free tracks apparently will feature enhanced quality.

Posted by Krudge | April 2, 2007 10:55 AM

""Kilo, in my computer, highlighting looks the way you want in both IE and Opera. What browser are you using? Firefox and Opera support site-specific styles.""
Posted by: Gary Sugar on April 2, 2007 10:00 AM

I'm on the latest firefox. The only options I saw were to "let sites use their own styles" vs forcing one style on all. This is basically just picking colours for regular text, links and visited links, no option I could spot for changing highligted (on all sites) or just for one site.

bah nevermind. It'll be some obscure encoding mismatch wankery which Firefox interprets differently. teh show must go on!

Posted by Kilo | April 2, 2007 10:58 AM

"I strongly doubt this, especially when jettisoning DRM will make it easy to go "halfsies" in your music purchases"

Matthew, does this answer your question about why the labels aren't eager to jettison DRM?

Posted by Petey | April 2, 2007 11:03 AM

petey, you vastly overestimate the degree of difficulty involved with "piracy" after you buy a track from itunes.

as for sound quality, you vastly overestimate the number of audiophiles out there. how did i originally hear the beatles? through the lousy speaks of our black-and-white tv when they were on ed sullivan and on 45s played over radio stations to our mediocre radio.

and i loved them nonetheless: i don't like the beatles better now just because i can hear "more."

Posted by howard | April 2, 2007 11:11 AM

And then, having invested in an iPod, you're only going to want to buy music from iTunes since only iTunes will play files that run on your iPod.

Huh? 90% of the music on my iPod didn't come from iTunes music store. Most came from my CD collection but I have used at least three other online music stores that sell mp3, aac and ogg files. All worked like a charm, both on the iPod and the iTunes program on my computer (which by the way, is not the same thing as the iTunes Music Store, try to get that right, OK?). The only thing the iPod won't plant are the closed, proprietary wma files.

Posted by justawriter | April 2, 2007 11:12 AM

The non-DRM files will also be encoded at 256 kbps instead of 128 kbps. So for the extra $.30 you are getting twice the sound quality and you can play it on whichever device you choose. Also, if you buy a full album the non-DRM, high-quality albums costs the same as the DRM, low-quality albums.

Matthew is correct about one thing: this is a bad day for Apple shareholders. (And a good day for Microsoft shareholders...)

Just think about this for a second (or if you don't feel like thinking, look at the actual stock prices). Microsoft has just committed themselves to a closed, DRMed system with the Zune, pissing off their 'Plays For Sure' partners (or are they competitors now?), whose music files don't work on the Zune. The Zune gets mediocre reviews, and slow adoption. The only compelling feature over the iPod (wifi song sharing) is crippled by the DRM and the lack of quick adoption. So now Apple begins the transition to an open system (Jobs says half of iTS will be DRM-free by the end of the year), with no compelling competitors, and garners some goodwill in the process. How exactly is this good for Microsoft?

Posted by worm eater | April 2, 2007 11:35 AM

justawriter writes:

I have used at least three other online music stores that sell mp3, aac and ogg files. All worked like a charm, both on the iPod ... The only thing the iPod won't plant are the closed, proprietary wma files.

Your iPod plays ogg files? Tell me how...

Posted by Charlie | April 2, 2007 11:48 AM

Your iPod plays ogg files? Tell me how...

Whoops, my bad. They play in iTunes (on my Mac anyway. I did have to download the ogg codec for Quicktime, but it was so long ago I don't remember where I got it) but not the iPod.

Posted by justawriter | April 2, 2007 12:06 PM

Matthew, here are Steve Jobs' comments on DRM. They fit with what I recall from the iTunes store launch: Apple would have preferred not to use DRM, but it was a choice between DRM that would satisfy the studios or nothing. Over time, Apple was able to negotiate a bit more looseness. This is part of that evolution. Now I grant that this could all just be PR, but it has been the Apple public stance since day one. I guess the question is, what is it you think this stance is missing, if it's actually bad business for Apple? (Not snark, by the way: I'm a big believer in corporate as well as political folly. I think you're wrong in this case, but then I could be too.)

Posted by Bruce Baugh | April 2, 2007 12:30 PM

Bruce, here's Cory Doctorow making fun of Jobs' comments, in particular pointing out that a number of smaller labels had wanted to sell DRM-free music on iTunes, but Apple would not permit it. If he was correct, this would appear to be a change in Apple's policy as much as EMI's.

Posted by Consumatopia | April 2, 2007 2:39 PM

The main beneficiary of the iTunes DRM is neither the artist nor the label, but rather Apple Computer.

If you own a like of iTunes DRMed files, then you're always going to want to use an iPod as your MP3 player because only an iPod will play your files. And then, having invested in an iPod, you're only going to want to buy music from iTunes since only iTunes will play files that run on your iPod. The result, over time, would simply be to make Apple a more important music industry player than are any of the record labels. EMusic, which offers DRM-free downloads, is really a much better long-run strategy for the record labels even though so far only indie labels have been smart enough to figure it out.

I know few if any of the technical details here so I'm just pulling this explanation out of my ass, but this situation doesn't sound inexplicable at all to me. Why do organizations other than Apple Computer support DRM? You might as well ask why people other than the rich support tax cuts that, in the end, happen to greatly favor the rich. First, they probably don't understand all the effects of the specific systems. Individual corporate lawyers or software engineers at EMI might understand, but the MBAs and lawyers who are actually making the decisions could quite probably not have figured out what seems more obvious to you. Insert "Dilbert" reference here. And second, even if they do understand what's going on, they may believe that just because they aren't in on the action now, doesn't mean they can't get in on it soon.

Posted by Cyrus | April 2, 2007 2:56 PM

Consuma, your link is busted. Presumably you meant this one. Jobs said he urged record labels to amend their contracts with Apple to allow DRM-free iTunes sales and Doctorow wrote:

I doubt Jobs’ sincerity. I suspect he likes DRM because it creates an anti-competitive lock-in to Apple.... Of course, it's easy for Jobs to aver that he will drop DRM if the labels let him. As Princeton's Ed Felten points out, Jobs says the labels call the shots on DRM and forced him to add DRM to iTunes Music. So it's hardly brave defiance to swear to take it off when the labels tell him to.

It's hard to view the subsequent events (EMI amended its contract with Apple, and Apple in turn will initiate DRM-free iTunes sales) as somehow validating Cory's point of view on this one.

I think Henry's point of view is correct, and I think Jobs and the iPod product managers have additionally made the calculation that the iPod doesn't need DRM lock-in and that the goal should be to avoid WMV-based devices ever achieving it.

Posted by Steve | April 2, 2007 4:13 PM

Bruce, here's Cory Doctorow making fun of Jobs' comments, in particular pointing out that a number of smaller labels had wanted to sell DRM-free music on iTunes, but Apple would not permit it. If he was correct, this would appear to be a change in Apple's policy as much as EMI's.

It is possible that Apple's stance has not changed. Apple (esp. under Jobs) has been known to be fanatical about consistency in user experience. Much of their efforts to lock down their various systems have been more about controlling the user experience of the system than locking customers into it. Letting a few small labels ditch DRM creates a headache for them, as it could confuse users when they are able to play some tracks on their Rio or Zune but not others. For the same reason they have resisted allowing tiered pricing structures (until now). But now, they have a major label committed to DRM-free songs, and raising prices and bitrates for these tracks actually works to reduce confusion (since the "tiered" structure is reflected in the price, the quality of the audio, and the usability of the track). In the Jobs control-freak mindset, it makes a lot of sense.

Posted by worm eater | April 2, 2007 6:49 PM

Why are DVD's encrypted?
So they can sell essentially worthless movies featuring Jerry Lewis for 50 Euros each in Paris. Jeez, are you that obtuse?

Posted by Binky | April 2, 2007 9:28 PM

People don't buy an iPod over a Zune because they're locked into iTMS. They buy the iPod because Zune zucks.

Eventually Microsoft may throw enough cash at it, and convince enough people that it's (a) "good enough" and (b) technology is just really complex and buggy and that's the way it is.

But the Zune still zucks and absent a change in Microsoft's orientation towards their customers, the Zune will continue to zuck, especially as contrasted with the iPod.

Posted by Lettuce | April 2, 2007 11:05 PM

Of course Apple and not the labels are the beneficiaries of the easily-evaded DRMs.

There is a class action against Apple for just the reason identified in this post. If you've bought an iPod, you are a member of the class and will recover in the suit is successful.

Posted by Bob | April 2, 2007 11:56 PM