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Why The Major Record Labels Will Ignore Steve Jobsí Advice On DRM Print E-mail
Thursday, 08 February 2007
In an open letter seemingly targeted to the big four major record labels, Apple founder, visionary and audiophile – Steven Jobs discusses the possibility of removing the DRM (digital rights management) copy protection from music files like the systems used on the files purchased from Apple’s ITunes Music Store. Jobs makes some strong points including the fact that the Compact Disc which sells well today (over $9,000,000,000 per year domestically) yet has no DRM system to protect music files that any consumer can rip to a computer, an MP3 device and most commonly an Apple iPod. Jobs is using solid logic in his letter but in this argument he is unlikely to get his point across to a group of executives who are so paralyzed by fear of piracy that just a few years ago they killed off their entire high resolution initiatives with SACD and DVD-Audio over the same DRM worries. Note: we are talking about the same music industry that was scared that recorded music would kill off sheet music. The same guys and girls that thought the DAT tape might end their sales forever. This is the same lot of power brokers that thought it was somehow wise to only offer a tiny selection of B-list titles for high resolution release on SACD and DVD-Audio and that consumers would not only buy a new, more expensive player and receiver but would go through the expense and trouble of using up to as many as nine cables to connect the system. These are the same executives that allowed a computer company named Apple to come in and sell their music to consumers at a lower price and with greater convenience than they could. For nearly 100 years, fear and protectionism has been endemic in the music business and isn’t likely to change any time soon.

The major labels have fought new technology every step of the way. Apple hasn’t and their stock price, especially under the guidance of Jobs proves the point. Copy protection is the core issue with the failings of HD DVD and Blu-ray to date. While HDMI makes connecting high-resolution video sources a lot easier with one cable, consumers still struggle with the awful HDCP copy protection needed to make one device make a “handshake” with another. Making consumers frustrated is not a good way to launch a new format when mainstream consumers are expected to buy new players and hardware.

Jobs is suggesting for every digital measure there is a digital counter measure and he is right. No matter how good the DRM system is – some pimply-faced assmunch somewhere in the world will crack the code. And if this theory is true then why not sell and promote music to the people who do actually buy music with a product that is high value and priced accordingly (hint: $18.99 back catalog records don’t sell like $9.99 albums on iTunes)?

Not only does selling music without DRM on iTunes make sense - so does a return to the idea of selling the A-list back catalog titles from the majors on a format like HD DVD and or Blu-ray. At $18.99 a GenExer might find it worthwhile to pick up some of his favorite band’s music on a disc that is packed with performance for the consumer while also being packed with profit for the retailer and label alike. The idea of selling high-resolution music exclusively to 60 year-old Baby Boomers is yet another marketing mistake that limits the ways music can be sold in higher volumes in years to come.

Ultimately as Dick Clark is famous for saying “if it ain’t in the grooves – it ain’t in the grooves”. In this case, when music with physical grooves were what actually sold – the music industry was far more worried about the quality of the music being made in terms of audio and performance quality. For the last decade Hollywood studios and record industry types have been far too concerned with DRM and not as much with their product. Apple is saying make music sales an open market and we are suggesting that the majors get back to finding, signing, developing and producing music at the highest creative and audio levels. Even without easily hacked DRMs, consumers will flock to stores as they have for the low-resolution iPod. Because in the end consumers still love music. They just don’t love how it is packaged and sold to them in 2007. Without question on both the download and the high-resolution side – it is time for a change. The question is will any of the majors listen to Steven Jobs? Sadly, the answer is most likely going to be no.

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