DRM-Free Music: What Are The Labels Really Up To?

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Much has been made lately of the recent news that Warner began selling DRM-free music via Amazon. There was even talk about how three of the big four labels are now offering DRM-free music, so all that was needed was for Sony to get into line.Well, now there’s a story from BusinessWeek that Sony is negotiating DRM-free music sales as well.There’s a certain amount of rejoicing over this, but I’m still unimpressed.

Why am I not thrilled? Well, can you reasonably expect to buy DRM-free music from these labels at most places digital downloads are sold? No. Can you even expect DRM-free music from these labels at the major stores where digital downloads are sold? No.Consider this:

  • The BW story says Sony will make “at least a part” of its catalog available. In other words, we’re throwing you some bones, but don’t think we’re against DRM to the point where we abandon it altogether.
  • Sony’s music will be available online only from (surprise!) Amazon.com. No iTunes. Is it a coincidence that Universal, Warner, and perhaps Sony won’t sell on iTunes (you know, the word’s most popular download music store)? How could anyone believe that? I wouldn’t believe it for a minute. It’d be borderline collusion from the three largest labels.
  • Universal, as far as I know, is also only allowing part of it catalog to be DRM-free. That was the case initially, and I’ve seen no announcement that they’ve opened up everything.
  • Of the big four labels, only the smallest (EMI) made their DRM-free music available through iTunes. The other labels music on iTunes is still with DRM, while they peddle their DRM-free wares elsewhere.

So why only part of the Universal and Sony catalogs? And why not iTunes? It’s clear DRM-free is little more right now than the carrot on the stick the labels are offering consumers. It’s the shiny object they distract you with. But they have something else up their sleeve they’re not divulging.I certainly don’t mind people snapping up the DRM-free music wherever its available if they want to, but I do mind that not enough people are questioning the true motives of the labels here. This is not “seeing the light” or “embracing” the new order of DRM-free tunes. This is a carefully crafted attack by the labels on iTunes, pricing and, yes, keeping DRM alive in some cases.When the Warner deal was announced I wrote the following, and now I can add Sony:

If the music is truly without restriction, why do Universal and Warner care where you get it? It’d by like taking their CDs (also DRM-free) and selling them at Best Buy and Target but not Wal-Mart! It would be insanity to not sell your DRM-free CDs through the largest retailer, and yet when it comes to digital music this is just what Universal and Warner are doing.

When the labels open up their entire catalogs DRM-free, and when they sell on iTunes (and other sites, for that matter), then I’ll believe they’ve finally gotten the hint and given up on all the stupid schemes and plans they’ve held for the last eight years. We’re not there yet, and until then I think they still need to be watched.[UPDATE:] Updated article based on confirmation that Amazon will be the only online store used for Sony DRM-free music.

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Warner Hates DRM Just A Little Less Than iTunes.

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So the net is abuzz with the story that Warner Music will sell DRM-free music through Amazon.

Numerous headlines call it a coup for Amazon, saying they beat Apple to the punch. And many are proclaiming it as a change of heart for Warner. It’s neither.

I don’t understand why it’s hard for some people to see that the only motive behind all this DRM-free love from Warner (and Universal before them) is motivated by the labels’ hatred for iTunes, and their attempts to break its popularity in the online music market. Amazon did nothing special to get Warner’s music, it was practically given to them by Warner.

Of the four major labels, only EMI makes their music DRM-free on iTunes as well as Amazon. And they did so long ago, without having to first make fools of themselves in a few more failed efforts. I would say that they have seen the light and shown a change of heart, but Universal and Warner? No.Consider the following:

  • It’s still not clear whether Universal has opened up their entire catalog DRM-free. That was certainly not the case when they initially made music available for Wal-Mart and Amazon.
  • Universal has also made their music available “free” (though not DRM-free) via other means such as Spiral Frog (which is bleeding money) and the Total Music initiative. They dole parts of their catalog out free or DRM-free to everyone but iTunes.
  • Warner is now making DRM-free music available for Amazon, but if it’s really a change of heart why do they care where the consumer gets the music? Why not make the obvious choice of also using the world’s largest online music store? Same goes for Universal.
  • Does anyone think Apple wouldn’t offer Universal or Warner music DRM-free if they could? Please. The labels are withholding it from them (either outright, or via unreasonable terms) in an attempt to gain some alleged advantage. This advantage is supposed to be pricing, and yet Amazon sells for the same (or maybe even less) than iTunes!

There is no change of heart, and the labels’ heads are still securely positions up their rectums. Any move they make to break iTunes, which is raking in money for the labels, proves that.

It concerns me that the labels hurt their own profits and customers’ interests in an attempt to get back at iTunes. It’s stupid, deceitful, and wrong-headed thinking. Why aren’t the stockholders enraged? I’ve come to expect this from the labels, but when I see how some of the headlines spin this latest announcement it’s clear some people aren’t paying attention.

Bottom line is this: If the music is truly without restriction, why do Universal and Warner care where you get it? It’d by like taking their CDs (also DRM-free) and selling them at Best Buy and Target but not Wal-Mart! It would be insanity to not sell your DRM-free CDs through the largest retailer, and yet when it comes to digital music this is just what Universal and Warner are doing. It’s almost impossible to construct a scenario where the reason behind this is anything other than taking misguided shots at iTunes in the face of ignoring your own potential sales, profits, and customers. Why they’re not called on this is beyond me.

Total Disaster: Universal’s Never-Ending War Against Apple.

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BusinessWeek published a story about yet another move Universal is taking against Apple. Before we get to their latest, let’s review the recent shots Universal has fired:

  • Pulled out of negotiations for iTunes contract extension.
  • Supplied DRM-free tracks to Wal-Mart’s PC-only music store as a “test”. Not for Mac.
  • Threw a boatload of DRM-free titles at Amazon in support of their AmazonMP3 store.
  • The Amazon and Wal-Mart tracks were not offered DRM-free to Apple’s iTunes store.
  • Teamed with SpiralFrog to offer “free” subscription music. You know, the exploding media that renders itself inoperable if you don’t visit the site often enough. Not for Mac. Not for iPod.

I wrote about the last item here, and the Amazon deal here. It’s amazing Universal changed their DRM views (for now) on selected titles — still a small percentage of their catalog — to spite Apple and hinder an online store that’s working, is popular, and making them lots of money! How greedy/stupid/arrogant do you have to be to potentially harm your sales in the belief that you’ll get back to the “good old days” of controlling all music distribution with an iron fist? And how pathetic do you have to be to do this while complaining about the very sales you’re hindering?

OK, enough review, let’s see what BusinessWeek says is next up Universal’s sleeve:

“Now, [Universal CEO Doug] Morris is going on the offensive. The world’s most powerful music executive aims to join forces with other record companies to launch an industry-owned subscription service. BusinessWeek has learned that Morris has already enlisted Sony BMG Music Entertainment as a potential partner and is talking to Warner Music Group… The service… will be called Total Music.”

Total Music? Total Disaster is more like it.

I can see why Sony would buy into this. After all, these are the guys who invented the CD root-kit and ATRAC, both disasters. They also spawned the ridiculous “ringle”, which will be a disaster when they bring it to market (I blasted it here).

As for Time Warner, they were the relatively “quiet” label until a week ago when they formally announced they can be as stupid as Universal. They’ve shown nothing in the way of original thinking and I’m sure would follow Universal down one of its many meandering paths.

“This isn’t only about Jobs; Morris badly needs to boost his business, and Apple is the one to beat.”

Dear Morris, APPLE IS SELLING YOUR PRODUCT! They’ve sold over three billion tracks, and statistically most of those were yours. When Apple sells one of your titles, you make money. And you spent zip for that profit; all you did was supply a source file. Do you understand any of this?

You should be helping Apple and iTunes, not wasting profits on building something inferior. You should attempt to leverage Apple’s success, not treat it as an enemy to turn your back on. That makes zero sense. Do you really think another subscription model and/or jacking up prices are your only options?

“And let’s not forget that existing subscription services have signed up only a few million people, vs. hundreds of millions of iTunes software downloads.”

The music labels have already forgotten this. This is why most of their initiatives revolve around very restrictive DRM and a subscription system. They keep chasing that dream.

“While the details are in flux, insiders say Morris & Co. have an intriguing business model: get hardware makers or cell carriers to absorb the cost of a roughly $5-per-month subscription fee so consumers get a device with all-you-can-eat music that’s essentially free.”

Oh, gee, another subscription service with another twist on “free”. While the SpiralFrog service is funded via ads, this new initiative will be funded by the consumer, having to pay for it in the initial price of the device. How the heck does this make it free?

“And though Morris hasn’t publicly blasted Jobs, his boss at Universal parent Vivendi is not nearly so hesitant. The split with record labels–Apple takes 29 cents of the 99 cents–“is indecent,” Vivendi CEO Jean-Bernard Levy told reporters in September. “Our contracts give too good a share to Apple.””

Dear Levy, you don’t create the music, you don’t promote it, you don’t host it, you don’t distribute it, you don’t support it, and you built no infrastructure for it. In essence, you spend nothing yet rake in 70% of the price. It’s indecent alright, but not in the way your twisted view sees it.

Apple gets 30%, and from that must fund the infrastructure to make this happen. What’s that leave them? Half? Not bad, but nowhere near 70. Are you begrudging them any profit at all? The service they provide isn’t worth ~15% to you? You get nearly five times their profit, do none of the work, and it’s not enough? You’re even more out of touch than Morris. The truth is, you are indecent.

“With the Total Music service, Morris and his allies are trying to hit reset on how digital music is consumed. In essence, Morris & Co. are telling consumers that music is a utility to which they are entitled, like water or gas.”

Aren’t water and gas more like, you know, necessities? And don’t you usually have just one source? It’s not like I went online, shopped around, and then picked the best gas and water companies to service my home. It’s a dumb analogy, and shows that BusinessWeek should maybe mind another business.

To me, this is just another BS maneuver by the labels in a bid to get people to rent music. They want what the video guys have, but the difference in the two is pretty fundamental. People listen to their favorite music over and over. While there may be a few movies or TV shows watched numerous times, the majority are watched once or twice. This is why DVRs or renting flicks work so well. Video and music are different animals, with different experiences and totally different expectations.

“The big question is whether the makers of music players and phones can charge enough to cover the cost of baking in the subscription. Under one scenario industry insiders figure the cost per player would amount to about $90.”

So, right now an incredible music player with 4GB memory and video/podcast/game capability sells for $149. But they’ll sell an inferior one (no one’s made one better) with a price 60% higher, and justify it by saying the user can load it with DRM-infested music for “free”? Wow. Can you show me the dictionary being used to define “free”?

Oh, and let’s talk about the DRM they’ll be using. Can the user put this music on an unlimited number of mobile players? Of course not. Can they play it on up to five PCs? Don’t bet on it. Can they effortlessly burn it on CD? Hell no. Remember, folks, this DRM won’t be FairPlay. It’s going to be a subscription DRM. You do not own these songs; they must be locked tightly to the device or the subscription model is useless.

“Of course, Morris still needs Jobs. It’s noteworthy that Universal has not pulled its music from iTunes–Morris simply can’t afford to do that.”

But apparently he can afford to thumb his nose at Apple and their iTunes customers. I’d love to hear why Universal didn’t cut Apple the same deal they cut Amazon for DRM-free tracks. There’s little reason except a certain disdain for iTunes and those who use it. The labels have decided that iPod consumers (most of them are pirates, remember?) and their overwhelmingly favorite online music store must be the cause of their declining sales.

Personally, I think the cause of the music labels failure is a lot more simple. It’s the morons in charge. I’ve asked this before but it bears repeating: Where are the labels’ stockholders? Why aren’t they calling for these guys’ heads?

So Many Tech Headlines, So Little Time.

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Here’s some reading for the weekend with a few of my comments.

Bill Gates: Music genius.

The New York Times seems to think Bill knows what he’s doing re: Online Music. My favorite is this quote from Bill at the conclusion:

““People are going to listen to a lot more music because it’s going to be easy to find neat new exciting music, its going to be easy to have your music with you, in the car, when you’re running,” he said. “It seems like there ought to be a way to translate that into an opportunity.””

Easy to find? You mean like via a one-stop shopping online store with music, movies, TV shows, free podcasts, and more? Listen to it when you’re in the car or running? You mean like if you could easily burn a CD for the car, or have a player that clipped to your running outfit? Hmm, yes, Bill, you’re so visionary only you can see that that could be translated into an opportunity.

Retire, Bill. Now. Seriously, you’ve been looking awfully foolish lately.

A new Zune requires new management.

Now that the Zune 2 is here, Microsoft can get down to what they do best: Bureaucracy. They hired another exec to toss at the problem. Remember, you can never have too many managers. Heh.

The secret behind why WGA was removed from IE7.

I’m glad we have Mary Jo Foley to question this, otherwise all us gullible morons would just assume MS told the truth when the IE 7 team says it’s because of this:

““Because Microsoft takes its commitment to help protect the entire Windows ecosystem seriously, we’re updating the IE7 installation experience to make it available as broadly as possible to all Windows users””

But Mary actually wonders if maybe there is another motive. Firefox is digging into IE, and perhaps Safari could gain ground as it improves in beta. So to Hell with WGA, we just want as many people to download IE and use it. We’re all about numbers; always have been, always will be.

What’s most amazing about this, and the little secret nobody will talk about, is that it’s absolute proof — if any were needed — that WGA has never been a GA to anybody but Microsoft.

Time Warner to Universal: Oh yeah? Well, we can stick our heads up our asses even further than you!

Can you believe another label is setting up yet another online store? No, I don’t mean one that’s been successful like iTunes. And no, I don’t mean one that’s DRM-free like eMusic. And no, I don’t mean one that’s a major new force (and going to be successful) like Amazon. Instead, I mean one that has everything that makes a music store fail:

  • DRM? check
  • Microsoft WMA files? check
  • Won’t work with iPods? check
  • Only half the songs of iTunes? check
  • Build a new PC client player from scratch? check
  • PC only? check
  • Subscription service? check

Holy shit! This is absolutely unbelievable to me. How freakin’ stupid do you have to be? Where has TW been that last few years? This boggles the mind. Universal, I take back everything I said about you (I’ll just say it again later anyway), TW has got to be even dumber than you are. Amazing.

Thurrott again.

Didn’t want to spend a lot of time on this one since Thurrott is piggybacking on an article that itself is overreaching in its attempts to be “fair” about eight reasons why Windows users don’t switch to Macs. Still, Paul takes the nauseating and makes it worse.

For example, price is listed as one reason, and Thurrott drools all over it:

“Well. Actually, the truth remains: Macs are more expensive than PCs, they still are. Yes, Macs are often comparably priced to similar PCs. The problem is that PCs come in many, many more price points, and unlike with Apple, PC users are used to choosing exactly what they want and getting it. “

And yet, when it comes to MP3 players Paul says that you can only look at comparable devices. So what have we learned? As a shill, when it suits Microsoft you compare everything, when it doesn’t suit Microsoft you narrow the parameters at least until you can claim the #2 spot.

Number 5 (lies) and 6 (Windows bashing) and 8 (Mac users) in the list bother me even from the original author but Thurrott, as usual, piles on:

“This is, quite possibly, the biggest problem facing the Mac community. You may not realize how serious this is. But consider this:

Mac fanatics are like Detroit car lobbyists. They’ve spent decades doing nothing but propping up the Mothership, all for what they think is a good cause, but all they’ve really done is harmed the thing they love so much. People understand quality, and that’s why so many are swayed by Apple’s products. People also understand bullying, and that’s why so many ignore Apple’s products.”

Paul, Microsoft INVENTED bullying. Regarding lies, isn’t your leader Bill Gates quoted as saying Vista was the first OS with parental controls, and that every day the Mac OS is hacked? Every day! Didn’t Balmer claim the iPhone was the most expensive phone ever? Doesn’t Microsoft claim shipped units as sold? Didn’t the IE7 team just claim they removed WGA to “protect the entire Windows ecosystem” (see above, and do try to keep up)?

The fact that marketing people “lie” is a given everywhere. That somehow Apple has done more of this, or been more egregious about it, is such horse shit I wonder if you have to wash yourself after you type this garbage.

Microsoft’s sins are not just on paper. They’ve been dragged into more LEGITIMATE court cases (not the BS type that they and Apple have to suffer through) and have SETTLED more times than anyone cares to count. Did you read ANYTHING out of the Iowa antitrust case? And wasn’t Microsoft just busted big time by the EU?

As for bashing, go to the comp.sys.mac.advocacy usenet news group to see what your precious sainted MS community has to say and how they act, Paul. Heck, just go to Digg. As Microsoft is fond of pointing out, they outnumber the Apple supporters by 9 to 1. They make Apple “zealots” look like kids at Sunday school, and have for 20 years!

Oh, and don’t forget this FACT: The vast majority of Apple supporters have experience with Windows (as Microsoft is also fond of pointing out, most people have to use it at work). Meanwhile, what the vast majority of Microsoft zealots know about Apple and Mac OS X would fit under a gnat’s armpit.

Any blogger attempting to be “fair” and somehow equating Apple’s sins with Microsoft’s, or Apple’s supporters with Microsoft’s, is either trying way too hard to get in the “big boys'” sandbox, or has a disgustingly short memory, or is too young to be writing about it with any authority. Paul saves his “best” for last:

“while Apple’s fanatics might have been desirable or even necessary during the rebuilding years, now they’re just dead weight. Good riddance, I say.”

Screw you, Paul. I love the way you bash people in a post that includes a lecture on bashing people. Jerk. Your livelihood is crumbling around you. The only dead weight is on the back of your old ideas about technology and the supporting business models. It’s to those ideas you should be bidding “good riddance”.

Radiohead’s stance must be honored; Jobs is an ass who doesn’t care.

I like the Rough Type site, but in this piece I think Carr is way off the mark.

Basically he says that since Radiohead won’t allow singles to be sold (only albums) they can’t be on iTunes. This is true, and it’s a choice made by them and Jobs. Jobs wants singles (rightfully so, album buyers like me are a dying breed; people want singles).

I haven’t seen Radiohead badmouth Apple or iTunes about this, and I haven’t seen Jobs or Apple badmouth Radiohead, so what’s the big deal? Agree to disagree, and all that. They both have stances and stick to them. Seems OK to me.At first Carr even seems to agree with this:

“You can applaud Radiohead’s lonely stance, or you can, as Crunchgear recently did, dismiss the band as “a bunch of crybabies.” … And you have to admit that Radiohead’s motivation in protecting what it sees as the integrity of its works is no different from Jobs’s motivation in protecting what he sees as the integrity of his products.”

Exactly. A sound statement and, as I said, agree to disagree. Crunchgear is wrong. But then Carr says this:

“Jobs’s lack of concern for the desire of Radiohead, and other artists, to control how people experience their creations undermines his attack on the people who would alter the iPhone to serve their own purposes.”

WTF? How the heck did we get from Radiohead and Jobs both protecting the integrity of their works/products to Jobs suddenly having no concern for Radiohead and other artists? And, oh yeah, Carr throws in the iPhone from left field ’cause it’s all the rage these days.

That’s nuts and, frankly, the one paragraph simply does not logically lead to the other.

I like Radiohead and have no issue with them not wanting to sell singles. I don’t agree with it because I believe it’s outdated thinking. And the fact is no artist can ever tell me how to enjoy their art. Ever. But I appreciate both sides stuck to what they believe, and really don’t see how either can be “wrong”. But Carr apparently believes one must be “wrong”, and that it’s Jobs. Nonsense.

As for throwing in the iPhone, well, why not? Apparently every blogger was contractually obligated to post a scathing “we want third-party apps” and/or “Apple is evil and mean to developers” piece on the iPhone this week.

Well, except me, I’m non-union. 🙂