The iPod problem

In the past, I have written about some of the “problems with DRM”:http://virtuelvis.com/archives/2006/05/why_no_drm, and I’ve stated that when I replace my “dying iPod”:http://virtuelvis.com/archives/2007/01/my-ipod-is-dying I couldn’t care less whether the player supports any particular DRM scheme, because I will not be using any DRMed media.
Seen from the content owner’s perspective, DRM should also be considered a massive failure. In 2004, BitTorrent allegedly accounted “35% of Internet traffic”:http://in.tech.yahoo.com/041103/137/2ho4i.html – the vast majority likely being pirated content (As much as I’d like to think that Linux distributions being insanely popular, I don’t really think that’s the case). This number is likely even higher now, but I couldn’t find a reliable source for it.
Herein lies the main problem for the media industry: P2P networks, BitTorrent search sites and the piracy industry has offered what the media industry has so far been unable to offer: High availability of unrestricted content. Not unrestricted as in “I’ll massively pirate this content”, but rather as in “I can transport this content between any of my computers and media players”, or “I can bring this file to my friends, and be guaranteed hassle-free playback”, or “I can give my friend a copy of this, because I really want to introduce him/her to [Some artist]”.
Don’t take my word for it. In a piece on the Swedish site “Ny Teknik”:http://nyteknik.se/ about record label “Bonnier Amigo”:http://www.bonnieramigo.se/index_site.php?page=eng Bonnier Amigo caves, and are going to “release all of their recordings as MP3”:http://nyteknik.se/art/48715 (Swedish only, I’m afraid). There’s one very interesting quote from Thomas Persson, VP of “InProdicon”:http://www.inprodicon.com/ — Scandinavia’s leading distributor of digital media content (translated/transliterated for your reading pleasure):
bq. The DRM that the big labels insist on is pure crap, because it causes problems for the end-users.
The article goes on to point to what I would like to dub the iPod problem, or the Apple problem: Music bought on iTunes only works in Apple’s own players. Because, while Apple certainly has a fair chunk of the high-end portable MP3 player market, they in no way own digital music playback. According to “this story”:http://communities-dominate.blogs.com/brands/2006/07/demise_of_a_dar.html the iPod has a 12.9% market share. Not 60, 70 or 80 as claimed by other sources that don’t count MP3 capable phones. (Incidentally, this is probably also explains the entire existence-to-come for the iPhone. This is a huge, untapped market for iTunes, that Apple has had _no_ entry into).
With iTunes being _the_ dominant force in download music distribution, it in practice means that the _availability_ of user-compatible legal music downloads also hovers around the 13% market. Compare this to the near 100% availability of pirated digital media content, and you understand why people turn to piracy. People turn to piracy, because, in reality, they’re never given a real choice. It’s to pirate the content, or suffer the inconvenience of buying physical media, like CDs and DVDs, or suffer the inconvenience of not being able to “reliably play back your content”:http://philwilson.org/blog/2007/01/breaking-copy-protection-for.html.
Can the media industry compete with the pirate bays of the world? Certainly:
* Reliability. While you can get some of the music some of the time on pirate sites and p2p networks, availability is spotty once you want something not in the mainstream. You might end up with 88.7% of a file, leaving the rest unusable.
* Trust. When getting a file from a commercial entity, you won’t be catching any malware infection, or get files that are something else than purported. No, I haven’t forgotten the Sony rootkit incident. I’m saying that when you no longer need DRM, you no longer need rootkits.
* Quality. The quality of pirated files ranges from bad to horrible:
** Rotten, missing or irrelevant metadata
** Rotten data. Audio data might be normalized to near usability, EQ applied. The bitrate might be bad, or a bad encoder might have been chosen for the job. Video data likewise: Poor quality, TV rips or badly compressed xvid/DIvX content.
* Choice. “The Philadelphia orchestra does it right”:http://diveintomark.org/archives/2006/09/22/really by offering the files in formats suited for different purposes. The mainstream movie and music industries could do this as well, offering content available for different purposes. Done right (read: Using a sane pricing model), they could even offer resales value: Buy a movie or TV show for portable player use, and later buy it for playing at home. Or buy unlimited access at a different price.
* One of the problems the media industries has had with the Pirate Bay is that the metadata distribution that TPB has been doing is (or hasn’t been) technically illegal in Sweden. By offering BitTorrent downloads, the media industry will also be the legitimate copyright holders of the interesting torrent files themselves. Which gives them legal clout to get the pirates prosecuted under almost any jurisdiction.
* I for one don’t think price is enough of a reason for regular Joes to keep pirating content. In the industrialized world, price is not prohibitive. We bought vast amounts of 8-track, records, tapes and CDs (heck, I still buy droves of CDs and DVDs, because I like to keep control of the quality myself) before the downloadable industry emerged. We will continue to do so with downloadable content, once the quality of legal content can compete with pirated content.
So, given that companies follow the lead of the Philadelphia Orchestra, Bonnier Amigo and independent labels who have been offering MP3 for some time, the media industry can still get on board. But they need to do this before the piracy industry is so deeply entrenched in Average Joe’s mind that Average Joe will think of pirate sites first, and the legitimate distributors second.
(Bonus question: Which will be the last company to abandon DRM as a scheme? No prizes for the answer, but I’d like to hear your thoughts)

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3 Comments

  1. I think it will be the biggest companies who abandon DRM last. They have many proprietary technologies to bind their customers to their services. Another fact is, that they are obviously not fast enough and probably don’t want to change their business models to the modern needs and wishes of customers. Some million dollars into a nice marketing strategy are still enough to create a need for enough customers to generate some income.
    Another thing (I noticed recently) is, that some netlabels, that distributed tracks for free in the past, are now charging people for the downloads. I believe, that they lose a lot of potential audience. Especially, because old “customers” cannot even download old tracks (that were free before) for free. Another thing to note: They never tried to adopt new technologies like bittorrent to distribute their music. Just downloads. To charge people now (for bandwidth? music? quality? whatever) and at the same time to not allow to download the old tracks for free is a very weird step inmy eyes.
    ps: What music player are you buying? And why? 😛

  2. I’ve used emusic for a while. What was nice about it is that I would pay a low monthly fee (around USD10) to download something like 40 songs, making each song at about $0,40 each. Very reasonnable.
    The drawback was that if I didn;t download all 40 songs I would loose money. Still, pretty goodfor people who are addicted to music.
    Their store contains something over 1.5 million songs (according to them) so there’s pretty much for everyone’s taste.
    Also, all downloaded files are in mp3 and they store them for you. Not only is there no (physical) restriction as to how you use them music, they even let you download them as many times as needed (good if your somehow loose your copy or are travelling around). They keep that as long as you maintain an account with them. Afterwards, you’re left with your local copy only.
    Still, pretty good.
    For the past few days, I’ve been looking at another service, with entirely free music: http://www.jamendo.com. Music there is published by the artists themselves under a Creative Common license. Not top of the charts, although if they make it that high you’ll definitively have a feeling of “I was there first”!
    I use to make tape copies of my LPs (and even CDs although it’s less necessary) to listen to them more conveniently, lend them to my friends and borrow their own discs to copy them and nobody made a fuss about it. I can’t understand why would anyone want to prevent me from doing that now. This whole DRM thing is ridiculous!
    Cheers!

  3. bq. ps: What music player are you buying? And why? 😛
    Graste: Undecided as of yet. The only thing I’m pretty sure of is that it won’t be a music phone. Due to what I believe is a kernel bug, my Sony Ericsson M600i won’t mount properly, or allow me to use.
    The Sansa Connect looked tempting with its music sharing feature, but from watching the Engadget video, the DRM on the sharing feature is a no-go for me. Further, they’re “not as Linux friendly”:http://lambdaman.blogspot.com/2007/01/sandisk-doesnt-want-your-money-unless.html — I know the Linux issue can be circumvented, but if I’m going for Sansa, it would probably be a different model.
    The iRiver s10 is a non-starter. I tried this player some time back, and it’s possibly the worst UI experience I’ve ever had with any hard- or software, as it’s really hard to operate, because you need a firm surface to operate it. That pretty much excludes using it without taking it out of the jacket pocket. The Creative Zen suffers some of the same issues.