DRM-Free Music Sells, Major Labels Keep Pretending The Jury Is Still Out

from the annoying-customers-isn't-good-business dept

Thu, Dec 14th 2006 3:21pm — Karl Bode

The idea that DRM-free music might just make good business sense smolders along, as eMusic is announcing they've managed to sell 100 million unprotected songs without the world coming to an end. As part of the promotion, the customer who purchased the milestone track will have a song written about him by the Barenaked Ladies, who'll include the song on as a bonus track for their upcoming album. The record labels have consistently claimed you can't be successful selling music that isn't copy-protected -- but eMusic's second place showing (behind iTunes) shows that's clearly not the case. They continue to sell more music than Rhapsody, Napster and MSN Music combined, all while catering to indie music fans by avoiding major label content. 2006 saw a growth in smaller content providers arguing that DRM-free content can be part of a sustainable business model, but there's still a shortage of major industry players acknowledging DRM's limitations. Meanwhile the major labels continue to pretend either that the idea has no legs -- or that they need to conduct further experiments to see if demand for DRM-free content actually exists. There simply can be no talk of a trend toward unprotected content en-masse as long as the music industry continues to pursue the idea in half-assed ways.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

21 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

ScytheNoire, 14 Dec 2006 @ 3:33pm

we'll see DRM free music just as soon as the RIAA and MPAA go away. they've spent way too much money to concede that people will pay for content, as long as they are allowed to use what they paid for any way they would like. nope, it won't be happening any time soon. luckily, more and more are just avoiding association with the RIAA and MPAA and doing things for themselves, and reaping the rewards of more loyal fans, content they own and have direct control of, and reaching the audience they want to reach.
[ link to this | view in thread ]
misanthropic humanist, 14 Dec 2006 @ 3:45pm

Can't con an honset man
Snake oil salesmen. They can be very persuasive. A good salesman can sell snow to Eskimos and it's all about psychology, charm and persistance. People buy into all sorts of things, not on their merits, but on the job the salesman did. So even Bill Gates, a presumably smart man, was hoodwinked into a position where he believed DRM could work. So were countless other presumably very smart people in big companies. How?

We all know as computer scientists and IT savvy people that copy protection and DRM are logically flawed at the most fundamentally basic mathematical and physical levels right? There will never be a copy protection system that works, ever. But smart people buy into things they *want* to believe in just as quickly as J Random Fool in the street.

And just like those 419 scam victims, once you've bought the magic snake oil nobody is going to convince you you were wrong, it's a matter of pride that can cause deep denial and bizzarre behaviour to justify your mistake.

Thats where the major lables are now. They still want to give Mr Umbugoola one more call to Nigeria to see if that cheque is in the mail yet like he promised.

Basically, they were had, hoisted by their own greedy make-believe world of magic copy "protection". Somewhere there are some very wealthy software engineers laughing it up right now.
[ link to this | view in thread ]
William, 14 Dec 2006 @ 4:51pm

DRM Free
Well now if ITunes would only start selling Music DRM free they would be unstoppable.
[ link to this | view in thread ]
Crimsondestroyer, 14 Dec 2006 @ 4:55pm

RE: Can't con an honset man
Bil gates wasn't hoodwinked into anything.
Microsoft was bought pure and simple.
Remember too that WGA and activation are their versions of DRM.
[ link to this | view in thread ]
Anonymous Coward, 14 Dec 2006 @ 5:13pm

Rhapsody and Napster are subscription services...

so what if eMusic is out selling them...

they dont sell that many songs.
[ link to this | view in thread ]
Don, 14 Dec 2006 @ 5:27pm

Yeah, and the only reason eMusic numbers aren't higher is because they have a "cap" on there downloads. there top plan only allowed for 90 tracks (now 75 for "newbies") a month (for $19.95, or $191.50 if you got the yearly plan), although they do allow up to $75 worth of "bonus packs" a month (you could get packs of up to 50 tunes - now 30 - for $14.95. Hell I've been a member for maybe six months now and I've already loaded up on close to 60 albums, most of them from very well known bands (sevendust, powerman 5000, black label society). Frankly, even if the major labels did suddenly start selling their music DRM free I'd likely still continue to buy from independent labels and sites like eMusic whenever possible. Well except maybe for Roadrunner Records. If Roadrunner ever signed a deal with eMusic I might go broke. lol
[ link to this | view in thread ]
Spud, 14 Dec 2006 @ 6:48pm

Will we one day see the death of DRM and go the unprotected song root as eMusic has done? From a consumer point of view I sure hope so.
[ link to this | view in thread ]
tc1uscg, 15 Dec 2006 @ 2:20am

Passport revoked
Maybe we can get the RIAA/MPAA to go to Russia and try to shut down ALLOFMP3.com and while they are overseas, get their passports revoked so they can't get back into this country... Works for me.
[ link to this | view in thread ]
Grim_Deeds, 15 Dec 2006 @ 3:54am

The timing is amazing
This story about DRM-free music selling well arrives as a feed in my email client's in box the morning after I sign up with eMusic and painlessly purchase several CD's worth of good music through their service while wondering why all of the music purchasing sites aren't all run in the same way.
[ link to this | view in thread ]
LJSeinfeld, 15 Dec 2006 @ 5:57am

Re: Rhapsody and Napster are subscription service
Umm yeah... I don't want to *subscribe* to my music that I'm paying for. I want to own it and be able to do whatever I damn-well please with it.

Subscription service music is DRM laden, and IMHO worse than buying (even) DRM'd files from services like iTunes. Little ticking time-bombs just waiting to expire. If you buy that crap, you're not part of the solution -- you're part of the problem. At least there are various workarounds for ITMS downloads..

I also applaud the BNL for being involved with this promotion. They're awesome.
-------------------
by Anonymous Coward on Dec 14th, 2006 @ 5:13pm
Rhapsody and Napster are subscription services...

so what if eMusic is out selling them...

they dont sell that many songs.
-------------------
[ link to this | view in thread ]
Jasper Kohl, 15 Dec 2006 @ 7:15am

It's cheap too
I think the low price of emusic tunes is as big a factor in its success as the DRM-free format. Depending on your subscription type, each track ends up costing between 25 and 40 cents. Major-label song prices are simply far too high! You end up paying about the same price for music as a discount/used CD, but you get no physical media or packaging, reduced audio quality, and (usually) inconvenient DRM restrictions. Unbelievable.

But emusic proves that people are willing to pay for music they can get free elsewhere, if the terms are reasonable.
[ link to this | view in thread ]
Eric the Grey, 15 Dec 2006 @ 7:38am

My only problem with emusic.com
is that they don't allow me to actually see what they have available without my signing up first.

Sorry, but I don't care to give my personal information to a company unless I plan to actually buy something, and then it is seldom that I'll do it.

Perhaps if they allowed us to browse their titles before filling in their forms, I'd change my mind, but not before hand.

EtG
[ link to this | view in thread ]
Simon, 15 Dec 2006 @ 7:53am

Re: My only problem with emusic.com
http://www.emusic.com/browse/all.html
[ link to this | view in thread ]
Elizabeth Brooks, 15 Dec 2006 @ 7:56am

The fact of the matter
is that while eMusic has sold a creditable number of files, and iTunes has sold a VERY creditable number of files, there are still more songs traded on filesharing services in five or six days than eMusic and Apple's total added together.

eMusic doesn't have that much that the mainstream wants to buy. More and more every day, as the majors continue to lose their touch and alienate artists with followings. But the big crowd will still go where the big stars are...and I can't imagine the majors giving up on DRM.....they just keep cooking up more and more bizarre versions of it.
[ link to this | view in thread ]
Joe Schmoe, 15 Dec 2006 @ 11:11am

"Yeah, and the only reason eMusic numbers aren't higher is because they have a "cap" on there downloads."

Yes, it has this appearance. But you can extend / download more by buying booster pack(s) - the lowest priced one of which (10 songs for $5.99) still comes in at 60 cents per. Very reasonable.
[ link to this | view in thread ]
Robert Rittmuller, 15 Dec 2006 @ 12:16pm

And the band played on...
One day the content industry will wake up and realize that the volume of sales of non-drm music and video will largely offset the loss incurred from those who steal. Its all about making things easy for the people who actually want what you are trying to sell.
[ link to this | view in thread ]
Nick D (profile), 15 Dec 2006 @ 3:44pm

"...see if demand for DRM-free content actually exists." Hahahaha! Well, no, most customers prefer DRM! How stupid are they?!!
[ link to this | view in thread ]
Michael Long, 18 Dec 2006 @ 1:43am

Sorry Robert Rittmuller...
Sorry Robert Rittmuller, but people who steal music "because of the DRM" will continue to do so. Remove the DRM excuse and they'll then steal because "the price isn't reasonable" or because "corporations are evil" or any of a dozen other ratiionalizations.
[ link to this | view in thread ]
Eric, 18 Dec 2006 @ 9:05am

eMusic sucks
What's amazing about eMusic is that is succeeds in spite of having a stupid model. A monthly cap on the amount of music you can purchase just doesn't make any sense and doesn't conform to any music buying behaviors that I'm aware of. (Some months I want more than 40 tracks, meanwhile any month that I don't I feel like I'm wasting money)

If they or someone else were to adopt a similar pricing model of AllofMp3, then I think it would fair even better against iTunes. I'd love to see a no-DRM service dominate the digital music business, but I think that eMusic's model puts off a lot of consumers that would otherwise buy music from them.
[ link to this | view in thread ]
Danny, 1 Jan 2008 @ 8:04pm

Re: RIAA MPAA
Here in new zealand we dont even have a fair use clause for transfering music to other media among our personal possessions. However, I have not heard of anyone being prosecuted unless they sell burnt music or server thousands of tracks. our version of the RIAA is called APRA and is the artistic and performance recording association who act as a single point of contact to assist with licensing music for commercial, and private use. I think this, and the information these organisations can provide is an invaluable service to ensure Artists and people who are paying for music are in touch. Whatever else they do is usually by collective or executive decision, and like all businesses they tend to go off the best information they have. If you suspected customers were walking out with 20% of your product without paying, you would install security cameras. Yet the estimates of piracy were spiralling higher for years based on a percentage of sales, which in itself is a bit flawed. However, how can you estimate the scale of an invisible crime. You cant. And how do you value something you didnt buy. Does that say that you dont value it, dont know what value it has yet, or that you are cheap? I prefer to think that for most people it is the 'dont know yet', and when we get given music from a friend to try, when we can we will buy an album by that artist. Nowadays I like the freedom of purchasing single tracks via the internet. But I also like being able to hear samples and radio internationally, peddling more than just recycled pop tunes. Most of all, I have enjoyed the so called "pirate radio" and undernet distribution networks simply because many showcase music such that I have never heard in a music store, street corner or concert here in New Zealand. However, most have not been worth keeping, nor finding the artist or an album. That said, I have spent alot of time and money on itunes and emusic because they are so ready to use and quick to download. Torrents might be good for the usual crap, but what if you want to find something old or slightly unusual quickly and then download quality info covers and at broadband speed?
Now what I would like is a revival site, like napster was before they killed it. Revival? Yes, songs and music that were killed by time. The ones you cannot find on Itunes, CD stores or emusic. Things like "Return to yogia" by Sha Abahn or the old 75 RPM recordings that didn't make it to the CD age. How would you stop kiddies loading up new pop music on the site? Moderators. but really...Who cares, kiddies have ooddles of time and usually no credit cards, let them be and maybe their parents will buy them music for xmas instead of a sweater.
[ link to this | view in thread ]
shannel cambari, 17 Jan 2008 @ 5:20pm

hey...
people keep pretending coz they don't want to show their real feeling mostly when they are avoiding for someone. the question is always in my astuteness, it is useful to us?...well, i hunch yes...there are instances why we keep pretending....first and foremost, we should true to our selves!!!!
[ link to this | view in thread ]