Toppling the Tower of Power in the Music Biz

The recent controversy over Sony BMG’s copy-protected music CDs demonstrates how dangerous this technology can be for a typical Windows PC user. Mac OS X and Linux were immune to this particular digital rights management (DRM) mechanism, but neither are immune to the FairPlay DRM employed by Apple’s iTunes online music store. The iPod’s success has in turn given the iTunes FairPlay protected format the lion’s share of the market.

And Sony BMG is fighting back in a war of words by redirecting iPod consumer questions back to Apple:

If you believe that you should be able to easily move tracks from your protected CD to your iPod then we encourage you to use the following link to contact Apple directly and tell them so [link].

While I don’t like monopolistic practices, and Apple is clearly acting that way by not licensing its FairPlay DRM system to competitors, I have to point out that Apple’s FairPlay DRM is, right now, still the most flexible for consumers. That could change, however. According to Declaration of InDRMpendence by ZDNet‘s David Berlind, DRM is a Trojan horse “of the worst kind”:

What you need to know is that DRM can be, and has proven to be, a Trojan horse.  In a back and forth thread of e-mails, the Electronic Frontier Foundation’s John Gilmore described to me how DRM technology basically allows those who sit at the controls of it to arbitrarily change the rules.  For example, one day, with Apple’s iTunes, we were able to burn the same playlist as many as ten times. A day later, it was seven. 

To be fair, iTunes still lets you place the songs in a second playlist and then burn seven more. The fact that you can still burn as many CDs as you want from the music gives you an out — you can burn a CD, then re-rip the music into another system. Audio quality suffers because you’re re-compressing something that was already compressed once, but most people won’t hear the difference.

But could any DRM mechanism not be compared to a Trojan horse? It depends on your opinion of rights management. If you believe that DRM should allow the transfer of music from one format to another, then you would probably agree with ZDNet‘s Dana Blankenhorn’s modest proposal in his blog entry Open source lessons from the Sony scandal:

Can we work on an open source system that will discourage mass market pirates while promoting fair use?

An open-source, freely licensed DRM would provide for protected music what MP3 provides for free music: a standard that every manufacturer can support, even Apple. That would make FairPlay a value-added format (perhaps for higher quality music formats). Sounds about right — you could still choose the open-source DRM format rather than the FairPlay format for cross-platform music management.

But if DRM is to succeed, it can’t be easily defeated by your typical teenage hacker — even if it is an open-source mechanism free to all manufacturers, even if the liberally licensed Microsoft DRM overtakes and eventually topples the Apple iPod tower of power (sorry, ever since that Sony BMG story, I can’t resist sprinkling band names linked to Sony BMG in my stories).

In fact, shouldn’t the record companies come to their senses and stop fussing over DRM?

Apple, Microsoft, and Judas Priest, They Were the Best of Friends…

DRM itself is shaping up to be an example of not being careful for what you wish for. In this case, the entertainment industry wished for DRM, but to get it, the industry’s record labels are losing control of the music business to the technology companies that own DRM. The snake is eating its own tail.

The beneficiaries are Apple and Microsoft, according to Declaration of InDRMpendence by ZDNet‘s David Berlind:

Microsoft and Apple couldn’t have asked for a better gift horse (Hollywood) to come their way, seeking a solution that ultimately gives back to it what it has for so long wanted.  Both companies had a razor (the DRM playback technology) and all they needed were some blades (the music).  Today, with every individual DRM-wrapped piece of content that gets sold, we are securing the futures of the DRM licensors (mostly Apple and Microsoft). That content will forever be useless unless you have something that includes their playback technologies… By continuing to buy DRM-wrapped content, we as consumers are actually unwittingly co-conspiring with Hollywood to give Microsoft and Apple the keys to the kingdom.

Are we as consumers setting the stage for the next monopoly grab, whether it be Apple or Microsoft? I don’t think so. John Gilmore’s famous quote, “The Net treats censorship as damage and routes around it” might apply. Perhaps the concept of DRM is simply not appropriate in the open-source world, and that’s a good thing. We as consumers will always have alternatives, even in a world where Apple is the Tower of Power.

Let the Record Companies Eat Cake, Hot Tuna, Leftover Salmon…

As musicians and artists, we also now have alternatives to the Big Five Towers of Power — the record labels. Berlind goes on to point out that, thanks to DRM, the record industry is giving away its business:

It’s no wonder Warner Music CEO Edgar Bronfman Jr. is threatening to put his foot down now.  He sees control over his business — for example, who sets the price of the music he sells — slipping away to the tech titans. [See Why Apple Won’t Up-Charge Downloads by Arik Hesseldahl in BusinessWeek Online.]

But the history of record labels and companies is that they’ve taken control of the market through technology (remember RCA? The 45-rpm vinyl record? The LP of the 1960s?) and through cartel-like control over distribution. Don’t weep for them. Let’s not forget that their “business” is based on manufacturing, promoting, and selling discs through their captive retail outlets. The major record label’s power has always been its control over the distribution channel for music. The Internet replaces this distribution channel and slowly erodes that power and with it the majors’ control over the artists.

So what? It is laughable to say that record labels develop talent; their business model is to exploit talent. So why not have an Apple (or even a Microsoft) that changes the business model, and in addition, an open-source model that challenges Apple and Microsoft?

Bands stand a better chance of direct compensation by selling music online or giving away their music and selling merchandise and concert tickets — not by selling discs in stores. Just ask any minor artists whether the economics of CD distribution benefits them.

I think a wide variety of major artists should go directly to Apple, treat it as a record label, and cut their own deal, bypassing the traditional record labels altogether. That would give them a bigger cut of their own music, and open the iPod market to them. I also think these artists, and most of the minors who never make it into the iTunes store, should give open-source distribution a test, and try to sell other things (merch, concert tics, etc.).

After the Sony BMG story, Leadbelly must be turning over in his grave. Unfortunately his works are sold by Sony BMG, but all he ever wanted was to sing for his freedom.

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