Friday, February 09, 2007

Is DRM such a good idea?

According to Steve Jobs, hardly 3% of the music on an average iPod has been purchased via iTunes and is, therefore, protected using Apple's FairPlay DRM technology.

He states that FairPlay was implemented because the big four (Universal, Sony BMG, Warner and EMI), who control 70% of distribution rights for all music worldwide, required "Apple to protect their music from being illegally copied." He favours abolition of DRMs.

The third alternative is to abolish DRMs entirely. Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat.

Source: Apple - Thoughts on Music

Steve has once again hit the nail on the head. There is little use for DRM because it protects nothing that is worth protecting at the cost it entails.

If only each agency would be content with their fair share of revenues, based on the value of their contribution to the music industry, we can throw DRM out of the window.

If not, DRM would likely die a natural death. Some new startup would create a model that competes sans DRM and quickly become the new way.

Agency Responsibility Revenue stream
Artists Bring in the audience Concerts, endorsements and share in Internet advertising revenue.
Recording Studios The equipment and facilities Rent
Online stores, search engines, new services like YouTube Promotion of artists and musical works Advertising revenue
Music companies, online stores Distribution Advertising revenue, subscription price, purchase price, etc.


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