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Digital rights in question as business model October 22, 2006

Posted by mark in : DRM, Music , trackback

Via DefectiveByDesign.org :

“Last week Billboard (the music industry publication) ran a great article about DRM and the digital music market. The article was picked up by Reuters and ran in many other publications”

The Billboard article says that any DRM scheme is likely to be cracked, and so its use inconveniences people who want to do the right thing, rather than people who want to steal music. And that it isn’t a smart way to treat customers who have a choice.

A recent Newsweek article quotes Steve Jobs saying that customers knew along that iTunes Music Store (iTMS) songs will only play on an iPod; and from the public figures [*] he’ll know that his informed customers fill the majority of their iPods with non-DRM’d songs from elsewhere. However, the sale of iPods is driven by available music, and iTMS (and its Fairplay DRM) could have been ‘merely’ a way for him to make the ‘music industry’ complicit in their sale, preventing lawsuits. The Economist says “Mr Jobs persuaded the record labels (which were panicking about illegal internet downloads) to sell music on iTunes for 99 cents per song, and then used music as a loss leader to make money from his gadgets”.

The Billboard article also says that legal digital downloads have not grown this year, and iTMS is dominant. So, if even a dominant player can only sell 24 DRM’d songs to a device probably containing thousands of non-DRM’d songs, then presumably there’s a customer need to be satisfied. Can you spot one? Thousands of artists on MySpace can.

* In 2004, itunesperipod.com had a data point of 21 iTunes songs per iPod. In 2005, Steve Jobs said “The average iTunes account holder has purchased 60 songs” (so <60 average per iPod). As of early 2006 the figure was an average of 24 tracks per iPod, according to Chris Anderson in his book “The Long Tail” (42 million iPods and 1 billion iTunes tracks over nearly 4 years)


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