Don't Mistake A Lull In Mobile Virus FUD For Its Disappearance

German Music Site Explains The High Cost Of DRM

from the DRM-good-for-the-call-center-business dept

Tue, Mar 20th 2007 2:24pm — Joseph Weisenthal

While the record labels continue making the specious claim that DRM opens up new business models, it's been clear for some time that DRM does nothing of the sort and only lessens the value of what's being "protected". Now, a German music download service is offering a very clear example of how DRM is hurting it and its consumers. The company says that three out of four customer support calls stem from confusion over copy-protection schemes, which ends up costing the company quite a bit of money. This isn't too surprising. One can only imagine how many times someone has called up to ask why a song won't play on their iPod. Meanwhile, the company has also started selling unprotected tracks from independent artists, and it notes that sales of those songs are up sharply. Considering the success of eMusic, which also sells DRM-free tracks, there seems to be a pretty clear business case for dropping DRM altogether. While it's probably going to take awhile for the record labels to get this message, we're wondering why Steve Jobs, who supposedly dislikes DRM, hasn't offered to sell DRM-free tracks over iTunes for artists and labels that opt for it. So if DRM costs a lot more in both licensing the technology and support, it doesn't provide any user benefit, it doesn't stop songs from getting on file sharing networks, and it actually holds back sales, what's the benefit of it?

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

19 Comments

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

Reader Comments

Subscribe: RSS

View by: Time | Thread

me, 20 Mar 2007 @ 2:43pm

Nothin but Gripes
[ link to this | view in thread ]
Michael Long, 20 Mar 2007 @ 2:51pm

Labels
Simple. The labels don't have to cover those costs.

As such, they're free to mandate that the "stores" use DRM systems on their content while they sit back and collect the royalties. Doesn't matter how many support calls the store gets, since the labels don't have to dig down into their pockets to pay for them.

Now, you could make the case that they're losing customers due to these problems, but from their viewpoint they'd lose customers without those systems in place.

Problem is, you can't prove either side is wrong.
[ link to this | view in thread ]
Tired of hearing about this, 20 Mar 2007 @ 2:59pm

Lots of talk out there, but not much walk. Until somebody has the guts to set up and (legally) make a stand against DRM, nothing will change.
[ link to this | view in thread ]
Charles Griswold, 20 Mar 2007 @ 3:11pm

Re: Tired of hearing about this
Lots of talk out there, but not much walk. Until somebody has the guts to set up and (legally) make a stand against DRM, nothing will change.

Well, I just did a Google search for drm-free music download and it appears that many people are making a stand against it. In particular, see Magnatune.com.
[ link to this | view in thread ]
MadJo (profile), 20 Mar 2007 @ 3:55pm

Re:
@Tired of hearing about this

Do you have a suggestion? Other than not buying stuff from iTunes and other DRM-enabled stores.
[ link to this | view in thread ]
Greg, 20 Mar 2007 @ 4:04pm

I think there are two possible reasons Jobs doesn't do that.

1. Too hard to build that into the iTunes store. Putting in exceptions for non-FairPlay content (that still plays along with iTunes) might just be too hard, or something. Not impossible, just not worth it.

2. He wants to keep people locked into the iTunes/iPod ecosystem, and his open letter to the music industry was just a ploy to get the EU legislators off of his back and on to the RIAA's.
[ link to this | view in thread ]
Anonymous Coward, 20 Mar 2007 @ 4:14pm

Re: Re:@Tired of hearing about this
Other suggestions?

Move to Canada and pirate all your music legally to your hearts content? If you are paying a 'music levy' on harddisks, flashstorage and disc media you might as well get your monies worth. :)
[ link to this | view in thread ]
DRM_SUCKS, 20 Mar 2007 @ 4:30pm

Hmmm
I suggest giving each DRM executive a box with a device that looks like an iPod with instructions to shoove it up their a s s and then turn it on, OOOPPPPS, what discomfort they have as the iPod device sort of burps and well they are left needing medical attention......

Maybe then DRM ship might shift and sink into the sea of non NRM.......
[ link to this | view in thread ]
Solo, 20 Mar 2007 @ 5:02pm

You can download DRM-free songs that you have to pay for from AllOfMp3. You can see the obvious succes of AllOfMp3. You can realize there's something to it (no DRM, affordable) and compete.

Or you can sue your customers.

There's more than one thing wrong with IP in the first place, but I'll start with outdated business model.
[ link to this | view in thread ]
Overcast, 20 Mar 2007 @ 5:03pm

Yes, but if the doctor takes it out - are they in violation of the DCMA for trying to 'get around' DRM?
[ link to this | view in thread ]
anonymous cowherd, 20 Mar 2007 @ 5:08pm

Re: Why Jobs doesn't push non-DRM tunes in ITMS
Couple of very good articles spell out precisely why Jobs isn't mixing in non-DRM music into ITMS:
http://www.roughlydrafted.com/RD/RDM.Tech.Q1.07/2A351C60-A4E5-4764-A083-FF8610E66A46.html
ht tp://www.roughlydrafted.com/RD/RDM.Tech.Q1.07/CCE4009B-F2E9-4913-BD39-CF8BD8B56FF0.html
[ link to this | view in thread ]
zcat, 20 Mar 2007 @ 6:08pm

Stop buying DRM music?
Yeah, we tried that already!

a) There's no alternative for mainstream. If you're not into indie music it's DRM or nothing. Even CD's are becoming less of an option, most of the new ones have 'copy protection' crap on them now.

b) When sales drop, they will just conclude that it's due to rampant piracy and the labels will respond by adding stronger DRM.

The 'music industry' is killing itself anyhow. Just sit back, watch the show, and hope they don't to too much collateral damage (DMCA, XCP, hardware DRM, and similar shit) on the way down.
[ link to this | view in thread ]
commonsense, 20 Mar 2007 @ 6:24pm

give me an example
With all this talk of selling songs or videos without DRM it leaves me wondering. Wondering what business model is everyone really being sold here. If a person takes time to spend their money to produce and record an item are you suggestion that in the long run they will sell more items without DRM?

Explain this concept to me...
[ link to this | view in thread ]
Mark, 20 Mar 2007 @ 7:25pm

When..
When the labels fell it's financially responsible for them to offer up their goods without DRM restrictions, the will. That's about all we can say.
[ link to this | view in thread ]
|333173|3|_||3, 21 Mar 2007 @ 3:47am

DRM-free iTunes song
couldn't iTunes use a default key, which is supplied if the track has the right tag att eh strat of th file or in the database. then when the song is downloaded, the key which is sent is either one which is published by Apple or which simply has no encryption effect, but rather leaves the song unscrambled. For a hacker to set the tracks to be DRM-free, they would have to hack itno the database of keys and songs, in which case they could download all the songs.
[ link to this | view in thread ]
Paul, 21 Mar 2007 @ 4:37am

Re: give me an example
Hmm.. seems like a troll attempt but I'll bite.

Many people spend their time and money to create non-DRMed material and then sell those items - look at labels signed to eMusic, Beatport and Magnatune for example, or independent labels like Warp who sell their own mp3s.

DRM does not protect profits (as discussed many times here), but does restrict consumers. As more consumers run into problems, more decide to either pirate the material or buy from grey-area sites such as allofmp3, meaning less profit for the labels involved. Other people, like myself, only buy unencumbered music, so the major labels also lose my money.

Remember that lack of DRM != piracy. Lose the DRM, gain happy customers and therefore . People get paid and both sides are happy in the long run
[ link to this | view in thread ]
PT, 21 Mar 2007 @ 6:09am

The benefits of DRM
The benefits of DRM is the temporary cash cow for the companies researching and producing DRM technologies for licensing.

Oh wait, thats not a valid reason to have DRM in the first place. Ummm, no no reason to have DRM at all, unless pushing customers away is the goal? Well, it seems to be working. Slowly. Too slow.
[ link to this | view in thread ]
PT, 21 Mar 2007 @ 6:09am

The benefits of DRM
The benefits of DRM is the temporary cash cow for the companies researching and producing DRM technologies for licensing.

Oh wait, thats not a valid reason to have DRM in the first place. Ummm, no no reason to have DRM at all, unless pushing customers away is the goal? Well, it seems to be working. Slowly. Too slow.
[ link to this | view in thread ]
Jessica, 21 Mar 2007 @ 1:07pm

Wow, 4 out of 4 calls are form confused consumers. That means a lot of people are wasting a whole lot of time (aka "money") to deal with DRM. There's another cost, whcih I haven't seen mentioned in most places. A composer, Shelly Palmer, wrote about how DRM poses a serious threat to musicians ability to remix and samples music. In other words, it threatens a whole new type of creativity that has naturally come about. Of course, as a musician, this doesn't sit well with him. - Jessica
[ link to this | view in thread ]