The end of DRM?
Apple and Amazon have recently secured deals with the 4 main music labels to provide music downloads without any digital rights management limitations - so is this the end for DRM?
I've belived for a long time that DRM was a useless and irritating technology, after all, to make DRM free music all you have to do on a computer is record the audio output, save it as a standard MP3 file and you have DRM free music. This makes DRM a minor incenvenience easily bypassed by an increaingly IT savvy global population.
Music has often been only the tip of the financial iceberg generated by musicians. I remember an old friend of mine, Phil, who used to coach our basketball team, talking to us as we drove to a match. One of my friends was a huge Queen and U2 fan, buying all of their records, standard and limited editions, tickets to gigs, t-shirts, badges etc. My friend was always fairly hard up for cash, running his own little gardening operation to give him some cash, so Phil pointed out that for every item my friend bought, at an average then of £5, millions of others around the world would be doing the same, therefore they were all getting poorer, while the group and their management and record labels were getting much, much richer.
Phil also worked out, after my friend's report on what he had bought at a recent gig, that although a record (in those days!) might cost £9.99, the ticket to the gig, a t-shirt, a badge, a drink, etc. could mean that he spent £50 at a gig. This meant that the group were generating far more from gigs than they ever did from the records.
Phil's conclusion was for my friend to send a letter to his favourite groups asking them to pay to come and see him mow a lawn so they could reward one of their loyal fans for the hundreds, if not thousands he had spent on them over the years.
20 years on, and the point Phil was making resonates even more loudly. Why not let people share the music as they want, particulrly teenagers, so you can get them hooked on an artist, then pitch the other things that actually make you money at them, i.e. the gigs, t-shirts, posters, official fan clubs, limited edition stuff etc.
Fans will allways, if they have the money, want to buy the merchandise and original music CDs of the artists they love. I know I could by the back catalogues of my favourite artists online, but I will pay the premium to own the CDs and the accompanying notes, lyrics and original artwork to go with the music, because I'm a fan.
So DRM less music is finally coming, but I think Amazon could steal a march on iTunes because they can sell the merchandise along side the music downloads, and unless iTunes finds a way of doing this quickly, they could find themselves out of favour with the record labels when they go to renegotiate their deals.
But what about the smaller record companies - how does a DRM less music distribution system affect them? I believe this could be a big problem for indipendant and smaller labels, as they don't have the finance to build up an artist as quickly as the big labels. They will need to sign artists to longer initial contracts, to protect them against poaching, but artists may well pick up on the initial offering as a yard stick as to what they may be worth, and decide to promote themselves over the web with a view of jumping straight to a big label.
The independants and smaller labels may therefore become feeders for the major labels, where they do the legwork of finding the talent, signing them up and then filtering the better performing (in terms of sales, downloads and views) to the big labels for a fee or share of future artist income.
The music industry's move away from DRM is like a dinosaur coming back to life, with one leg missing - they never should have gone down this road and they shouldn't be reliant on third parties to distribute their music. If one of them had had the foresight to buy Napster in the late nineties, they would have dominated the field, with the opportunities to sell merchandising (which is difficult and costly to reproduce) enourmous.
In the very near future I predict more one hit wonders than ever before as managers and record labels try to find the next big thing, with the only truly successful artists, financially and artistically, being those that can perform live to large arena and stadium audiences. There will also be an accelereated creating of copy cat artists, as there seem to be now ("which one was that" is a cry I hear often) to try and maximise revenue by getting fans to buy in to similar artists.
In the medium term this will all settle down - we've been through it all before and we'll go through it all again. I wasn't around when the Beatles made it big, but from the archive footage you can see the desperation of the other groups, managers and music labels of the times, exemplified by the Monkees. However, the cycle will become quicker with the internet driving global exposure faster than ever before, making the likes of The Rolling Stones, Pink Floyd, U2 etc. rarer than ever, but possible better than ever, as they will need to be to raise to and stay at the top of the Internet quagmire.
posted by Rish @ 4:59 pm
