Music Execs Say Apple's DRM Hurting Industry

EMB Numbers writes "C-Net says last year saw a 131 percent jump in digital sales, but overall the industry still saw about a 4 percent decline in revenue. Some executives at this week's Digital Music Forum East conference lashed out at Jobs, blaming Apple and its CEO for their troubles. The impression at the conference was that Jobs' call three weeks ago for DRM-free music was anything but sincere. As the article puts it, 'Apple has maintained a stranglehold on the digital music industry by locking up iTunes music with DRM ... and "it's causing everybody else who is participating in the marketplace — the other service providers, the labels, the users — a lot of pain. If they could simply open it up, everybody would love them.""

Re:Bullshit

[Aadain2001]

I agree. I read the summary and was simply dumb struck with how oblivious those Music Exec. are to the true cause of their suffering. Maybe instead of blaming everyone else, look in the mirror you idiots! You have fought digital online music since your first heard the term "MP3". Top that off with suing your own customers in mass, and its no wonder your revenue is falling! People don't want to buy from you!

Re:Bullshit

[minus_273]

if you want a good feel for how bad this open DRM is try using the new bittorrent store or even better with free TV try using the AOL In2TV [aol.com] great site with a ton of good content for free download. Yet after each commercial during the show, you need to go back to the site and get re authorized for the DRM. Absolute pain in the ass.

Re:Bullshit

[pixelpusher220]

Apple doesn't make money on the downloads and they don't make money off of iPod's because of iTunes. They make money off of iPods because iPods have seriously outdone the other music players/companies. Are the technical features of an iPod that much greater than others? nope, in some cases it's inferior (no built in FM tuner, etc) and yet iPod is STILL the number one music player. People want that player, regardless of whether or not they use iTunes.

If iTunes opens up to non-DRM (AAC) stuff, iPods will continue selling like hot cakes. Besides, iTunes DRM is crackable and even if not you can just burn to CD and rerip into mp3's.

Strategic

[creysoft]

Apple, in it's traditionally clever way, has turned the tables on the music industry. The music industry, in initial negotiations, simply stated that they wanted "DRM." Apple designed and built a form of DRM that (A) minimally inconveniences their customers, (B) complies with the letter of the agreement, and most importantly, (C) uses the DRM to lock iTunes to its player, thereby profiting from the arrangement and effectively killing any other competitors. (Even MS can't break into the market.) As Apple has the only digital music store anybody would want to use, they use their considerable muscle to bully the music industry into doing what they want.

This is NOT what the music industry wanted. When they say "DRM," they mean DRM that protects *them,* not resellers. So now they're crying for Apple to "open" their DRM. They still want DRM, just DRM that doesn't give Apple the above benefits, the goal being to effectively give their competitors a chance to flourish. If this happens, the music industry will regain the upper hand in negotiations, and start forcing Apple to do its bidding. This will, of course, result in higher prices and poorer service.

The music industry is betting the public won't understand the difference between "opening" DRM, and doing away with it. The former helps nobody but the music industry. If they succeed in convincing consumers that the industry is opposed to DRM, and mean old Apple is forcing it on them, they'll be able to turn public opinion against Apple and get their demands met. This has nothing to do with helping the consumer, and everything to do with the music industry trying to wrestle its way out of Apple's iron grip on its throat.

We'll see how this turns out.

Re:Am I right or am I wrong?

[peragrin]

Not only have the Labels demanded DRM their license agreements basically prevent the sharing of that DRM with others. As steve Jobs said in the same dissing DRM speach. Apple is responible for the DRM if it fails Apple has to upgrade it to fix it. If Apple suddenly licenses it out to a dozen different companies they can no longer insure the DRM will be updated properly across all systems in the timely fashion that the Labels demand.

Just look at all the problems MSFT has had with getting playsforsure to actually play for sure.

Re:Correction

[Conspiracy_Of_Doves]

Since when is this about money? This is about control. They could make plenty of money if they abandoned all DRM... for a while at least. Until all the new bands started going the indy route and refused to sign on with the big labels entirely.

I Laughed My Ass Off After Reading This

[canfirman]

"C-Net says last year saw a 131 percent jump in digital sales, but overall the industry still saw about a 4 percent decline in revenue. Some executives at this week's Digital Music Forum East conference lashed out at Jobs, blaming Apple and its CEO for their troubles.

Man, I laughed my ass off when I read this one. So, there's a 4 percent decline in overall revenue. The only reason they could find is Steve Jobs? Of course, it wouldn't have anything to do with the fact that their products suck, would it? No, they would never look at themselves and wonder why sales are down. I guess their latest "pop tarts" aren't bringing in the money they were a long time ago. Oh, and I'm sure the lawsuits aren't affecting the revenue line. Nah - it's got to be Steve Jobs, isn't it?

Please. How lame can you get?

Re:Math... duh...?

[Firethorn]

I've heard that limiting prints is indeed part of the problem. What the music industry doesn't talk about is that the number of albums they release is also down.

Fewer albums released -> lower sales -> less income

And a side of re-hash...

[starglider29a]

How many songs are there that are on multiple "albums"? How often do record companies put out a "Greatest Hits" compilation and add a new song just to get the fans of that band to "need" to buy it?

Now, they don't need to. The iTuner gets the new "<fiction>Van HalenRunning With The Devil f. Alanis Morrisette on vocals</fiction>" for a buck, instead of shelling out $17.99 for that and 17 reruns. That's a 94.4% drop in revenue, and DRM has nothing to do with it.

labels need to open up or die

[swschrad]

they're the problem. they are not in control any more, customers are, and that's why they are running wild as wolves on crack in the courts trying to get some control.

they won't.

worst case is, we become a police state on rent to the RIAA, and the commercial music business completely dies out. you'll have your bar bands and individuals making their own music, no more supermegagroups and no more boy/girl band of the month bullshit.

best case is, the back libraries become fully availiable, every scratch and warped tape of it, in unlocked downloads for which the licensor (for there are no purchasers of music without all the suits on one end of the boardroom table and overwhelmed band members on the other) gets perpetual personal enjoyment for a half buck a track.

musicians, control your own back catalog, get it back from the pigopolists now. that way you get all the revenue. you don't need a label to catalog it, just a google search.

Re: WHY apple DRM etc etc.

[Dilaudid]

Thus the only thing keeping the status quo which we all like ($1 songs and ability to buy singles) is apple's exclusive control of it's DRM. The moment that vanishes the Music INdustry has us in its claws

Apple is worth $75bn > EMI's music arm ($1.4bn) + Warner Music ($2.9bn) + Sony's music arm ($2.1bn) + Vivendi ($5.5bn). This isn't a case of the big music companies putting the squeeze on some gentle artisan. This is a case of one of America's biggest corporations negotiating with its minnow-like suppliers. If Jobs wants the music companies to relax restrictions on their music, I'm sure their shareholders would welcome a takeover bid. Since Jobs is both CEO and Chairman of Apple, it's his decision.

Re:Bullshit

[Trillan]

It's definitely debatable. I suspect Apple couldn't give two shakes about "vendor lock in," and it probably annoys them more than anything else.

See, Apple has confidence they have the best music player. That means that if everyone removed DRM, Apple would have a larger share of a much bigger pie. Even if some users moved away from the iPod, after their new device breaks (or gets sufficienty annoying), Apple's confident they'll come back to the iPod. At that point, the lack of "lock in" helps Apple.

"Lock in" is only useful when you don't know you're the best. Apple knows its the best (even though there's some possibility they're wrong).

Re:Bullshit

[Anomolous Cowturd]

Well... I am a long time Mac-hater. I don't mean dislike. I absolutely loathe having to use the bloody things. Fortunately I don't have to very often... anyway.

I just bought an Ipod shuffle. It's smaller, cheaper, better-looking, better performing than anything else available in it's class. Face it, Ipods rule in every way, including price. Plus I can ignore the whole DRM issue since I get my music from uncrippled sources.