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Universal and Sony Plan "Free" Music Service

ScuttleMonkey posted more than 6 years ago | from the get-what-you-pay-for dept.

Music 98

Damon Tog writes "Macworld reports that Universal Music Group has enlisted the help of Sony to join forces in a new music service. The price of the subscription is expected to be built-in to the cost of digital music players, leaving the music 'free' to the consumer. 'The plan is still in flux and faces several hurdles, BusinessWeek notes. Among them is finding a business model that allows the hardware makers to subsidize the cost of the music. In addition, the labels have tried to develop their own online music services before without success.'"

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98 comments

One thing worth knowing (1)

pwizard2 (920421) | more than 6 years ago | (#20963905)

How is the music from this service going to be tied to the particular player that is paying for it, and what obscure file format will it be? It would be foolish to think that the RIAA would be generous enough to distribute MP3 files that will play with anything.

Re:One thing worth knowing (0)

Anonymous Coward | more than 6 years ago | (#20963921)

It would be foolish to think that the RIAA would be generous enough to distribute MP3 files that will play with anything.
If they did, I can assure you I'd be the first to rush out and buy them just so I could have them play with my balls.
 

Re:One thing worth knowing (4, Insightful)

whoever57 (658626) | more than 6 years ago | (#20963965)

How is the music from this service going to be tied to the particular player that is paying for it,
It doesn't need to be tied to a particular player, as long as it it tied to a class of players, all of which include the royalty payment as part of the purchase. Thus, all that is required is an encryption or encoding format that is only licensed to those particular players. Additional measures could include proprietary communication formats between the player and the PC (and between the PC and the music store), combined with the requirement that a player is connected to the PC before the PC is allowed to download anything. The real question is: how long will it take DVD Jon to break the encryption?

The most important question is the one that the major labels always forget to ask: what value does this bring to consumers? With Amazon selling MP3s, why pay $100 extra for a player, which is designed to break in 18 months?

Better Question (3, Insightful)

shmlco (594907) | more than 6 years ago | (#20964089)

First, anyone who thinks it's "free" is nuts. Any price "bundled" into the player or phone service will per passed along to the end user.

And as such, here's a better question: What happens to the music when you stop paying the subscription?

Most subscription services of that type cancel all of your music when you're done. Are you going to want to pay two or three years worth of subscription fees and end up with nothing?

Re:Better Question (1)

Phurge (1112105) | more than 6 years ago | (#20972391)

"Are you going to want to pay two or three years worth of subscription fees and end up with nothing?" If the price is right then I won't be too bothered. A couple of years ago I would buy a cd a week, thats £500/year. Plus in total I owned about 600 cds. If I could have subscription service that gives me access to a virtually unlimited back catalogue, for a fee of say £5 or even £10/month then financially I am way way ahead and have a greater music choice. If the subscription site is backed by a company thats not going to go broke any time soon, then for me a subscription site is absolutely the answer. (I currently pay last.fm £1.50/month for such a service and have stopped buying cds) The problem is that for the great unwashed masses who bought drm'd ipods - it is ingrained into them that you "buy" a track or CD, which you then "own" and can do with as you wish. (that is of course if they're not downloading their music). I don't think the prevailing buy & own paradigm is going to change for quite a while.

Re:One thing worth knowing (1)

bigjarom (950328) | more than 6 years ago | (#20964097)

It doesn't need to be tied to a particular player, as long as it it tied to a class of players, all of which include the royalty payment as part of the purchase.
This is what they do in Canada, but without any tyrannical proprietary players or formats. Canadians are trusted to get content (that they've paid for through player and medium 'taxes') from either of the standard sources, be it Limewire OR Bittorrent. It's hard to knock the system they've got.

Re:One thing worth knowing (1)

blind biker (1066130) | more than 6 years ago | (#20964345)

It doesn't need to be tied to a particular player, as long as it it tied to a class of players, all of which include the royalty payment as part of the purchase. Thus, all that is required is an encryption or encoding format that is only licensed to those particular players.

Yeah, that's the intent. And I for one don't see any way this could fail *cough*CHINA*cough*, none at all.

Re:One thing worth knowing (1)

Travis Mansbridge (830557) | more than 6 years ago | (#20964879)

The real question is: how long will it take DVD Jon to break the encryption?
I bet I could break the encryption right now [impactacoustics.com]

Re:One thing worth knowing (1, Interesting)

Anonymous Coward | more than 6 years ago | (#20965331)

The referenced Business Week article contains this quote: "Under one scenario industry insiders figure the cost per player would amount to about $90."

Soon, the average consumer will belive the cost of music is $0. And the XXAA will have defined the total value of their catalogs at $90, considerably less than $9800 per song...

Re:One thing worth knowing (5, Insightful)

Spasemunki (63473) | more than 6 years ago | (#20963987)

... and the other question that immediately presents itself: when the partners involved in this deal lose interest after a couple years of lackluster sales, what will become of that nice device that you paid for- probably paid a lot for, given the "built in" subscription cost? Will you be able to load music onto it from other sources, or will it be bricked once the associated service is shut down?

Business Model? (2, Insightful)

Ed_1024 (744566) | more than 6 years ago | (#20964205)

What manufacturer would take on an open ended commitment of $60/yr? Even with Apple's legendary profit margins, they would be losing money by absorbing a $60 levy on their low-end iPods ($79 Shuffle, $149 Nano) and that's just in the first year! I can't see the situation being any better for other MP3 player makers.

From TFA, Apple allegedly get $0.29 from every $0.99 iTunes sale, i.e. the record companies get $0.70; I'd bet that $0.29 has to fund the credit card charges and infrastructure costs while the $0.70 is pure profit for emailing one master song copy to Cupertino. Does the music industry not realise what a good deal they have here? Pretty much every attempt at 'going solo' by a major has ended in disaster, indeed the quoted article states that Sony are closing their on-line music stores: how much did they lose there?

I think we're witnessing the beginning of the end of the 'traditional' music company and these sort of suggestions are just spasms from a body that doesn't know it's head has been cut off...

Re:Business Model? (1)

NewYorkCountryLawyer (912032) | more than 6 years ago | (#20971183)

I think we're witnessing the beginning of the end of the 'traditional' music company and these sort of suggestions are just spasms from a body that doesn't know it's head has been cut off...
You got that right. Within these companies the people who were supposed to come up with ideas and haven't, have to put something out to save their jobs, so they mention something ridiculous like this. I can't imagine there are 6 people left in the US who would have enough trust in these companies to plunk down the kind of money that would be needed to give this any chance whatsoever of making a profit.

Re:One thing worth knowing (2, Interesting)

davester666 (731373) | more than 6 years ago | (#20964329)

This is the ideal system for the major labels:

Large amount of fairly steady, predictable revenue every month, no matter what people actually want
-they get monthly fees whether or not you use a device or the associated service [say, if the device is lost or broken]
-they are also paid PER DEVICE, so you wind up paying multiple times for the same music [cuz they'll want you to buy a second 'player' for your car, another for your home, and one for each of your household to walk around with (sharing devices is VERBOTEN!)]

They get to push themselves as 'the brand'
-since this money goes into a pool, probably only shared by the big 4 labels, it probably will be split based on market share. So, there is a greater incentive for labels to push the label instead of individual bands [get EMI music, cuz it's got all the best bands]. They could care less if music from band A or band B is downloaded, so long as A & B are licensed from them.

Throws a whole new load of mud on accounting
- as in, which bands/artists/composers get paid what? Now, with Apple, it's pretty clear. You buy a song A. Band X, composer Y, etc.. "should" be paid some money. This would be possible to audit [presuming even basic logs are kept]. With this new system, there is no reason for any logs to be kept, as if the devices 'rent' is paid, it can play whatever it wants.
- and, if you've already bought the music you listen to, this 'rental' fee becomes 100% profit, as there are no artists to reimburse

Re:One thing worth knowing (1)

DreadfulGrape (398188) | more than 6 years ago | (#20965113)

Ideal for the majors, shitty for everyone else. This is a clusterfuck of an idea (one that could only have come from Big Record Labels). Apple won't go for it; I think that's a given. So that leaves the remaining 15% or so of the personal music-player market, for which the increased cost will drive down their market-share even further.

Brought to you from the industry that actually hates it customers....

Re:One thing worth knowing (0)

Anonymous Coward | more than 6 years ago | (#20966809)

> How is the music from this service going to be tied to the particular player that is paying for it, and what obscure file format will it be? It would be foolish to think that the RIAA would be generous enough to distribute MP3 files that will play with anything.

And even if RIAA were generous enough, it'd be doubly foolish to think that Sony would :)

Re:One thing worth knowing (1)

ScrewMaster (602015) | more than 6 years ago | (#20968629)

This has little if anything to do with the RIAA: they're just a just the enforcement arm of the big studios, and they will do what they're told. The question is whether the studios will release their music in an unencumbered format: they might, if that involves getting a cut of hardware profits. Personally, I think that would be a bad precedent, since it would give them even more influence over hardware design and implementation (look how well that worked for Sony's product line.) This could be a ploy to do just that: get the hardware guys under their collective thumbs and the studios can get heavy-handed again. In any event, they are not to be trusted.

Re:One thing worth knowing (1)

NewYorkCountryLawyer (912032) | more than 6 years ago | (#20971355)

This has little if anything to do with the RIAA: they're just a just the enforcement arm of the big studios, and they will do what they're told.
In a sense, the RIAA has nothing to do with the RIAA.

The RIAA is a trade association.

Its four biggest members decided to combine together and pool their copyrights in a way that would violate antitrust law, so they decided to use their trade association as a "protective shield" for their otherwise unlawful activity. No other members of the RIAA have anything to do with the litigation campaign. And the RIAA is not an "enforcement" organization at all. If you look at its charter I doubt you'll see anything about that in there.

The "RIAA" you and I think of when we think of the RIAA litigations isn't the RIAA at all. It's SONY BMG, Universal Vivendi, EMI, and Warner Bros., 4 dying corporations.

And the reason is you... (3, Insightful)

creativeHavoc (1052138) | more than 6 years ago | (#20963941)

The reason there have been so many failed music stores, especially when they have been built by the root content distributers themselves, is they don't want to take the time (and therefore money) to sit down and develop (not just build) an easy to use, intuitive, open music distribution software. They are marketing driven, and as such, this software it looked at from a marketing stand point. Full of buzzwords and trends, but no strong basis on what people want.

People want music in several formats.
People want music that plays over all devices they own.
People want music in varying quality, and are willing to scale the pay of a song to the quality.
People are not willing to pay more than a song is worth. (This is the biggest issue for the labels)

If a service is build instead of a program, the company will be successful.

/rant

Re:And the reason is you... (1)

The_Mystic_For_Real (766020) | more than 6 years ago | (#20963989)

What the *AAs need to accept is that the model of printing media and selling it at a giant markup is as obsolete as
selling horse carriages. When they forced the original napster out of business, they then took it's model (and name)
and made it legit. The same now has to happen with bittorrent trackers. Charge a reasonable subscription,
set up dedicated seeds so you only have to upload while you download, ???, profit, though not nearly as much
as before. People will pay to be legit, and have all the old songs and B sides as well as decent speeds, and the p2p model
will save bandwidth. Meanwhile with the website you can do what most content providers due and sell ad space.

Or they could just continue to pay off the government to get bad laws that bankrupt single mothers passed.

Allofmp3 (1)

jbond23 (525878) | more than 6 years ago | (#20964359)

What. You mean like AllOfMp3? Somebody should just buy them and their technology and run the same system in the west with real royalty payments. But then it wouldn't be so cheap. And I wouldn't be able to use the Russian service.

Re:And the reason is you... (2, Insightful)

hyfe (641811) | more than 6 years ago | (#20964607)

Arg, Parent is so technocratic it hurts.

People want music in several formats.
Of course they don't! The wast majority of people who buy music want to listen it. If formats get in the way, that's bad. If they don't, it's good.

People want music in varying quality, and are willing to scale the pay of a song to the quality.
They do? Most people have no concept whatsoever of file-size, and file-size to quality ratios.. and nor should they have. They want music, they want to listen to it and as long as they don't notice the quality it's good enough. I mean, there's a reason mp3 is so popular. Either way, most mp3-players have shitloads of space, there's little reason to go for anything other than lossless these days (besides mp3 being universally supported).

People are not willing to pay more than a song is worth. (This is the biggest issue for the labels)
A good is worth what a purchaser is willing to pay for it.

From a music industry exec (3, Interesting)

PMBjornerud (947233) | more than 6 years ago | (#20965095)

Ok, ok. So I'm not really a music industry exec. But I think like one:

People want music in several formats.
People want music that plays over all devices they own.
People want music in varying quality, and are willing to scale the pay of a song to the quality.
People are not willing to pay more than a song is worth. (This is the biggest issue for the labels)
No, no, no. Nono. No!

We've figured it out now. People want free (as in beer) music! That's why we have rampant piracy and such lackluster sales. Right? Duh. Those mindless buggers care for nothing but free. But since these music-playing handheld machines still are selling like hotcakes, there must be some way we can get money from them instead!

Obviously we just have to make music "free", and people will buy... erm, rent... er, hang on... enjoy (yes!) our music again!

Trust us, our plans are brilliant this time!

Oh... and I shouldn't write this... It's supposed to be a secret, but here goes: Since this "free" service obviously needs to be limited to the specific devices that are paying us, there must be some DRM involved. That means that we can at any time change this into a pay-per-play scheme. See how clever we are!!!

We should have done this sooner! World domination! We've learned now! Those selfish consumers want nothing but free, so we'll give them "free", all right. Ha! this time, we cannot loose! Brilliant, I tell you!

Trust us, our plans are brilliant this time! (1)

porneL (674499) | more than 6 years ago | (#20973331)

This reminds me this [wulffmorgenthaler.com] salesman.

Re:From a music industry exec (1)

Archon-X (264195) | more than 6 years ago | (#20981257)

This mentality works quite happily for mobile / cell phones though...

Fed Up (1)

sh3l1 (981741) | more than 6 years ago | (#20963947)

Personally, I think that this plan is great, I hope it works well, because I am fed up with the music industry at large.

Re:Fed Up (1)

deathtopaulw (1032050) | more than 6 years ago | (#20963993)

you're fed up with the industry, so you want to buy straight from the industry?
hope this is sarcastic....

Re:Fed Up (1)

anagama (611277) | more than 6 years ago | (#20964081)

Personally, I think that this plan is great, I hope it works well, because I am fed up with the music industry at large.

Yeah -- since this is by the industry, wait till you see the price. It'll probably be something like $150 + ($1.50 * song_capacity). So for a 1gb device (240 songs), expect to pay $510. The next question to answer is whether you can replace songs. I'd expect it would be a one-way deal -- once you load it, you own it, and can't replace it. If the songs are replaceable, they'd soon run out of the ability to price gouge.

Good Sign (2, Insightful)

detain (687995) | more than 6 years ago | (#20963949)

This is a sign that more of the labels are starting to realize they need to change with the times and will (hopefully) stop blaiming the lack of interest in buying CDs on piracy alone. With any luck more things like this will start to happen soon as companies start to test the waters of new business models.

This could be a great thing for both consumers and corperations, if they are willing to start trying new business models, it means we as customers could very well wind up with new innovative ways to enjoy media that doesnt leave you feeling like you just got ripped off.

Re:Good Sign (2, Insightful)

Dachannien (617929) | more than 6 years ago | (#20964133)

On the other hand, it's a bad sign because the music industry is just finding new ways (or, perhaps, rediscovering old ways) to exert unnecessary control over their product. Hardware lock-in is bad for the consumer, because it limits consumer choice, but it's good for the music and electronics industries, for the same reason.

Re:Good Sign (1)

rucs_hack (784150) | more than 6 years ago | (#20965739)

They can control it all they want, but the pool of people who are willing to be subjected to that control is going to get smaller over time.

They might even have a few years of success with such a model, but as soon as the first groups of consumers who quit starting complaining about not having their music any more, support will wane, and their grand scheme will flop.

Re:Good Sign (1)

marcello_dl (667940) | more than 6 years ago | (#20964501)

> "...new innovative ways to enjoy media that doesnt leave you feeling like you just got ripped off."

What about this scenario: you subscribe for some songs you really like, but as revenue starts flowing, labels publish as much crap as possible, because they know you would like to hold onto the content you like. If you rebelled, the songs you like either expire at the end of subscription, or would be tied to one particular player which is gonna get obsolete/less functional in 3 years or less and with restricted transfer capabilities to another device.

Re:Good Sign (1)

R3d M3rcury (871886) | more than 6 years ago | (#20969013)

The scenario in the article assumed that people would replace their players after 18 months (After all, that's how long an iPod's battery lasts [ipodsdirtysecret.com] ;^). Personally--and maybe I'm not into music or players--I can't see replacing a music player after 18 months, short of planned obsolescence (ie, replacing the battery in the device costs more than a new device would) unless something really new and cool comes along.

For example, I have a 2G iPod nano which works great. I don't see any reason to spend money on a 3G iPod nano. I wouldn't get one unless my 2G iPod nano, for some reason, went belly-up.

So that's the neat question. Will the music be mine as long as I own the device? Or is it more like a cellphone-type contract that I get with the player (eg, free music for 18 months and then I have to pay a "subscription-fee")?

I would imagine there wouldn't be any restrictions on copying your music from one compatible device to another one. After all, when you bought the new device, you paid for the subscription just like you did with the old device.

Yearly Subscription (1)

mrbill1234 (715607) | more than 6 years ago | (#20963953)

I'm surprised at this move - I would have thought that they would go for a yearly subscription model with the first year free.

it's en fuego (4, Funny)

User 956 (568564) | more than 6 years ago | (#20963973)

Macworld reports that Universal Music Group has enlisted the help of Sony to join forces in a new music service.

Initial reports indicate this offer is really "heating up", but that's only because the music players use Sony batteries.

Re:it's en fuego (1)

ReinisFMF (893095) | more than 6 years ago | (#20964417)

All your funny mod points are belong to me!

blah blah blah (1)

Gnodab (1072670) | more than 6 years ago | (#20963979)

Record execs: "blah blah blah, blah blah blah"

The sad truth is ... (2, Insightful)

kawabago (551139) | more than 6 years ago | (#20964005)

The label's business model isn't needed any more. These are their death throes.

"Free" as in "Sony" (4, Insightful)

CleverNickName (129189) | more than 6 years ago | (#20964023)

So we have:
  • Free as in speech (you're free to do what you want with it)
  • Free as in beer (you get it for free)
  • And now there's free as in Sony (we're free to fuck you after we have your money)
No thanks, Sony and UMG. Fool me once, can't get fooled again.

Re:"Free" as in "Sony" (1)

crowbarsarefornerdyg (1021537) | more than 6 years ago | (#20964083)

You forgot
  • ...Sony (And watch the battery explode in your player)

Re:"Free" as in "Sony" (0)

Anonymous Coward | more than 6 years ago | (#20967999)

Fool me once, can't get fooled again.

Is that you -- no, nevermind, that's definitely not you, W.

Re:"Free" as in "Sony" (1)

Nazmun (590998) | more than 6 years ago | (#20971901)

Is that like a variation of the Bush butchering of the, "Fool me once shame on you, fool me twice shame on me" saying?

IF so you forgot the unusuals pauses. I don't understand why people are so emotionally charged on this site. Before passing down judgement we need know how this will actually be implemented. While I doubt that this will be painless to use theres still a chance it might actually work out really well.

Re:"Free" as in "Sony" (1)

NewYorkCountryLawyer (912032) | more than 6 years ago | (#20977129)

I don't understand why people are so emotionally charged on this site. Before passing down judgement we need know how this will actually be implemented.
It doesn't matter how it's implemented if the companies doing it can't be trusted. These companies can't be trusted.

Case in point: on the issue of ripping one's own cd for personal use, at the oral argument before the US Supreme Court in MGM v. Grokster, when it suited their advantage, they said that that type of copying was fine. Then, on the witness stand in Capitol v. Thomas last week, they said it was not fine, it was a copyright infringement.

It doesn't matter how they say they will "implement" it; they are not someone I'd want to do business with.

All the music fit to hear (3, Interesting)

SuperKendall (25149) | more than 6 years ago | (#20964027)

So, would said player let you load any of your own music on it? Or is this a device where you get to hear how great whatever artists a limited set of studios thinks are good enough for you?

It's like radio, but with more room to roam in your cage.

The problem is that selling cages to consumers has traditionally led to them escaping, or not entering in the first place in great numbers...

Re:All the music fit to hear (1)

edavid (1045092) | more than 6 years ago | (#20964061)

This kind of scheme is only a way for majors to make people pay for the music the major choose, and not the music the people choose.

And make it more difficult for artists t quit the majors, like some begin to do.

Re:All the music fit to hear (1)

langelgjm (860756) | more than 6 years ago | (#20964757)

This would give a whole new meaning to things like the "U2 iPod".

It gets worse for the music industry (1)

Animats (122034) | more than 6 years ago | (#20964055)

Among them is finding a business model that allows the hardware makers to subsidize the cost of the music.

Er, right.

The music industry has an even worse problem coming up. The music player industry will probably be eaten by the phone industry. Most newer phones have some music player capability. And the phone guys have a network in place that can distribute the music. The problem for the labels is that the telcos want a much bigger piece of the revenue than iTunes takes. Sprint started at $2.50 per song, back in 2006, and they kept most of that. Early in 2007, they dropped the price to $0.99 per song. It's not clear how much of that Sprint keeps, but it's probably more than Apple does. Plus, Sprint gives away a few songs a week to each customer, sends out audio streams, and probably doesn't pay the labels much for that.

From the label perspective, this is much worse than iTunes. iTunes is an online retailer. The telcos are the customer. The music labels are headed into a situation where they have about five to ten customers, all much bigger than any music industry company.

But sometimes you just want a music player... (1)

Chmcginn (201645) | more than 6 years ago | (#20966293)

The music industry has an even worse problem coming up. The music player industry will probably be eaten by the phone industry. Most newer phones have some music player capability.
As convienent as a all-in-one device is, sometimes I don't want to bring something that expensive with me. If I'm going to work out, all I want is the music player. I don't want to get interrupted, and I don't want to risk damaging a much more expensive piece of equipment. There's always going to be a market for an mp3 player without all the extras.

Why (1)

bm_luethke (253362) | more than 6 years ago | (#20964075)

Among them is finding a business model that allows the hardware makers to subsidize the cost of the music

We have already seen that most of those that pirate music still purchase CD's - in fact we consistently see that those that pirate music are the *highest* purchasers of music. Why do they need to incorporate this - it is already subsidized in the outrageous cost for a CD?

Allow it to play anything and make your money off 15 dollar CD's like they always have. Put lyrics, art, higher quality recordings (that is, non-compressed just like they currently do), and other things most music enthusiast want for the music they really want and let everything else go. For quite a few years now those purchasing music do so because they want too and feel they get value from their money, not because they have too or lawsuits. In fact my bet is that there are more that refuse to purchase because of the lawsuits than they gain from people refusing to download.

Even though I used the term "outrageous cost" I purchased quite a number of CD's until I finally got fed up with what they were doing, I haven't purchased one in years (nor have I downloaded music - while they like to pretend otherwise they know that also supports them in their crusade). While I thought it was over priced having a decent copy with the CD jacket was worth the cost for the stuff I liked.

At some point that will *have* to be the business model as Pandora's Box has been opened on MP3's and other compressed music (the only impediment to non-compressed is hard drive space and that will most likely be "fixed" some day also). They can't close it and *must* come to terms with it somewhere down the road - it is just a matter of how much "collateral damage" there is in the interim.

Not to mention I am willing to bet that many would pay quite a bit extra for a player that offered you indemnity to lawsuits from the RIAA (that is - your downloads/uploads are legal) and they would still get the CD purchases they are currently getting, plus the ones they have turned away from their lawsuits. They really should look at this as tons and tons and tons of free bandwidth. Heck, I would even side with them on harsh punishments if they just required a copyright notice (complete with some advertisement) with every download - in a sense a BSD licensed music download. Still plenty of reasons to purchased a CD, lots of free advertisement, and lots of free bandwidth.

Re:Why (1)

shark72 (702619) | more than 6 years ago | (#20966131)

"We have already seen that most of those that pirate music still purchase CD's - in fact we consistently see that those that pirate music are the *highest* purchasers of music."

Yet piracy is exploding, while CD sales are dropping.

I think there's a bit of confirmation bias going on here -- we want to feel good about piracy, so we keep repeating stuff like the above. When somebody tells us that their piracy has led them to purchase more music, we remember it. When we meet somebody who (like many of my friends) acknowledges that they stopped buying music once they discovered that they can simply get it for free, we tend to forget this fact quickly, as it is not congruent to the "pirates purchase more music" meme.

My grandmother does not pirate music. She does not buy music, either. My brother now pirates 100% of his music, but might have bought a CD once or twice in his life. There you have it -- non-pirates buy zero music, and pirates buy some music. We can use this as evidence that pirates purchase more music, but it's intellectually dishonest.

Re:Why (1)

billsoxs (637329) | more than 6 years ago | (#20968919)

Here is the one major item that I think everyone overlooks:

The last couple of years the Movie companies have moved toward sequels as a way of life. They are afraid of messing up - so they take the 'safe' route. (Pirates 1, 2 and 3 Shrek 1,2 and 3) Note for the most part sequels make less money each time. The record companies have been doing this even longer and I believe that this is why sales are dropping for the record industry. They are so afraid of failure that each new song is really a remake of what they have spewed for the last 10 years. I think that the last growth years for the record iindustry was when hip-hop was growing. Now hip-hop is stale (as is mainstream rock). I see no reason to buy any new music. It all sucks - or sounds just like (put in your favorite super band here). What is the point. I own enough Beatles/RollingStones/PinkFloyd/SRVaughn. Why should I buy a 'copy' band?

The upshot is that music sales will continue to slip until the record companies start to look at the music they sell. It is not the business model.

I still long for the day (1)

Rik Sweeney (471717) | more than 6 years ago | (#20964079)

where I can download an album in a lossless format so I can convert it myself.

Playing Let's Pretend for a minute, if I owned an online music store I would offer music in MP3 format and also FLAC for the advanced users.

People could then download the FLAC versions and use some crappy tool that I provide to convert it into a selection of different formats.

Oh, and albums would be downloaded in a single zip file. If Radiohead can do it then so can I.

Re:I still long for the day (1)

gronofer (838299) | more than 6 years ago | (#20964099)

"Advanced users" using FLAC don't need you to provide some crappy tool.

Magnatune [magnatune.com] already does what you suggest, including the optional FLAC downloads. Presumably the typical musician isn't impressed with the concept, or it would have conquered the market by now.

Re:I still long for the day (1)

Belial6 (794905) | more than 6 years ago | (#20964159)

I don't want it in flac. I want a zip file that contains an ISO and images for packaging. I then want a discount for doing the manufacturing myself instead of paying extra for it. I can rip to flac myself, but I want to know that when I make a CD and put it in a player, it can go out to the CDDB and get all of the details.

The other option I want is downloads via flac that is followed up by a physical disk in the mail. This would give me all of the professionally produced packaging and pressed disk, while still giving me the instant satisfaction of getting the music by download.

Re:I still long for the day (1)

TheRaven64 (641858) | more than 6 years ago | (#20964455)

I don't understand why going to CDDB to get metadata from an iso is better than having the metadata already present in a FLAC. You can burn a CD with CD Text from the FLAC files using any of a large number of existing tools, convert them to some lossy format preserving the metadata, or play them as they are. What can you do with an ISO that you can't do with FLAC, or which of these can you do better?

Sounds like another non-starter. Think DivX (1)

Whuffo (1043790) | more than 6 years ago | (#20964101)

For this to actually work they'd need not only to have a sufficient number of these players in the hands of listeners, they'd also need to have more material available than just Sony and Universal stuff. It's not even clear if Sony Records is on board for this ill-fated venture.

First (and fatal) flaw: if you're going to roll the cost of the music into the price of the player then it's going to be far more expensive than any other portable player. Even a "minimal" 4 GB player holds about 800 tunes - even if the labels are unusually generous and only charge 50 cents per tune as a license fee - that's a $400 surcharge over the price of the player hardware.

But it probably won't get to the point where these players are being ignored by shoppers. If there's a fixed fee up front for all the music you can play and multiple labels involved - can you imagine the discussions about who gets how much of that license fee? Those people are every bit as bad as you imagine and this alone will prevent any meaningful cooperation between the labels.

So things aren't going to change any time soon - portable music players will continue to be loaded from CDs and "other distribution systems" with a very small number of purchased digital tracks.

Collusion, anti-trust, monopoly anyone??? (0)

Anonymous Coward | more than 6 years ago | (#20964105)

So let's see - the major record labels get together and create a single service and set uniform pricing rules. That sounds like cartel and probably highly illegal under American copyright law, to say nothing of European law.

Re:Collusion, anti-trust, monopoly anyone??? (1)

justinlee37 (993373) | more than 6 years ago | (#20964495)

That sounds like cartel and probably highly illegal under American copyright law,

You mean anti-trust law.

Re:Collusion, anti-trust, monopoly anyone??? (1)

NewYorkCountryLawyer (912032) | more than 6 years ago | (#20971221)

That sounds like cartel and probably highly illegal under American copyright law,
You mean anti-trust law.
Yes.

And yes.

It sounds highly illegal to me as well.

S/FREE/LOCKED IN (1)

timmarhy (659436) | more than 6 years ago | (#20964155)

all this means is you'll pay through the nose for the player, it'll be locked in to their service and some where down the track they will turn it into a subscription based system to milk you.

What about the storage TAX? (1)

JackMeyhoff (1070484) | more than 6 years ago | (#20964193)

Will this be included also in the price of these players or will it be waived?

sony?? (1)

luther349 (645380) | more than 6 years ago | (#20964199)

why does my mind scream trap when it comes to the riaa lables making a free music service.

too little too late (1)

DragonTHC (208439) | more than 6 years ago | (#20964259)

sorry SONY, I no longer need you.

Re:too little too late (1)

NewYorkCountryLawyer (912032) | more than 6 years ago | (#20971201)

sorry SONY, I no longer need you.
Well said; they must be confusing the American public with someone who gives a damn what hairbrained scheme these corporations can come up with.

This is actually a great move (4, Insightful)

Budenny (888916) | more than 6 years ago | (#20964321)

This is a great move, because it will reveal the absurdity of the present locked player situation. Its a classic stage in industry evolution. Stage one is, some company (Apple) comes out with a format for purchased tunes which will only play on its own player.

This creates two incentives. The first is to increase the sale of tunes, since the other players depend on the tunes not the player as their main business. So they want more tunes sold. But as long as there is an Apple monopoly of sold tunes, this isn't going to happen, and there is nothing they can do about it.

The second incentive is to compete with Apple as a retailer.

So, because of the success so far of the Apple strategy, all they can really do is emulate it: come up with another store, another player, a different format, and tunes locked to it. Since they have to overcome an incumbent, they will be reduced to making his attractive by initially lowering the price of the tunes and using a different locked format, to make people use their player. This will be a replay of competing format wars that we have seen with hardware formats in the past.

We will then move to the stage, which we have seen previously in media with different consumer formats, where consumers still refuse to buy the stuff because they hate incompatible formats. After a while of this an unlocked standard will emerge. I don't mean a standard that is not copy protected, but one does not lock purchased tunes to players from one particular vendor, or make them be purchased by one specialised bit of software or currency. It will work just like CDs and DVDs do now: buy your content wherever you want from one of a variety of independent outlets, using whatever payment means you want, and play it on the player of your choice, from one of several manufacturers.

The Apple strategy has worked well for a while, but it has within it, like all DRM based attempts to tie up your use of what you buy, the seeds of its own destruction. It is not a sustainable business model longer term. The present model for music and CDs was. The only thing that is destroying it is overpricing from the content publishers.

Apple is far better placed to deal with the implosion of the business model. Its trivial to take locking off the iPod and iTunes store. And if the money falls out of the tunes market, it hardly affects them. For the content owners, their whole model is falling to bits in well defined stages that we have previously seen in other format wars. It is what is coming towards us.

Re:This is actually a great move (0)

Anonymous Coward | more than 6 years ago | (#20967763)

Without addressing the issue of whether Apple wants DRM or not, there were music stores that came before itunes and stores that came after itunes, and everyone of them that sells music from the big labels has DRM. The big labels insisted upon building and locking themselves in the jail cell they are now pacing.

Are the labels stupid enough to build a business model around multiple DRM standards they do not control without thinking about network effects and the possibility of a strong competitor usurping their power? Damn right they are, but I am not 100% sure that is the case here. I think that the labels, like everyone else, believed Microsoft would become the DRM gatekeeper and that Apple' success fucked up this plan real good.

So, because of the success so far of the Apple strategy, all they can really do is emulate it: come up with another store, another player, a different format, and tunes locked to it.

What you are calling the Apple strategy is really the strategy of the music industry. They insisted upon DRM but did not dictate a standard and we are now at the logical conclusion of those decisions. The only surprising thing is that Apple grabbed the bulk of online purchases instead of Microsoft.

After a while of this an unlocked standard will emerge. I don't mean a standard that is not copy protected, but one does not lock purchased tunes to players from one particular vendor, or make them be purchased by one specialised bit of software or currency. It will work just like CDs and DVDs do now: buy your content wherever you want from one of a variety of independent outlets, using whatever payment means you want, and play it on the player of your choice, from one of several manufacturers.

We can call it "Plays for Sure." It will be a runaway success.

The Apple strategy has worked well for a while, but it has within it, like all DRM based attempts to tie up your use of what you buy, the seeds of its own destruction. It is not a sustainable business model longer term. The present model for music and CDs was. The only thing that is destroying it is overpricing from the content publishers.

The problem for the record labels is not the lack of one universally accepted form of DRM. While this may seem like the best way to diminish the power Apple has currently amassed, the problem for the labels is the instant availability of non DRMed music outside of their distribution control.

The same problems they were trying to solve by abdicating so much power to technology companies in the first place.

With this attempt to make music a utility that requires a perpetual monthly fee, the first goal is to cut currently powerful individual artists off at the knees. The second goal is to eliminate the ability of individual artists to sell their work outside of the label distribution network. The idea is to create a system where "music" is valued, not an individual artists. A system where candy is valued over meat and potatoes, a system that maximizes what they are selling.

The best part of all of this is that when the hardware makers balk, the next stop is congress. Expect to see the "America Needs A Law Requiring Album Profit Evermore" act soon.

As an old fart... (1)

pipingguy (566974) | more than 6 years ago | (#20964349)

A local music store has a special on now, 4 CDs for $20 (Canadian, about two-fifty [snopes.com] American). Now that's more like it. I spent $40 there this week but on old, crappy stuff that today's listener wouldn't care for. I'm still expecting the now-ripped songs to self-destruct or something in 12 months.

Re:As an old fart... (0)

Anonymous Coward | more than 6 years ago | (#20966973)

4 CDs for $20 (Canadian, about two-fifty American)
You kidding me? The days when USD 1.00 = CAN $ 1.6 are over. It's about even nowadays, fluctuating about USD 1.00 = CAN $1.05. I don't know if you say USD 2.50 to work out the little joke about the urban legend, but you should be up front with it. Some /.-ters may take it as a fact.

Re:As an old fart... (1)

pipingguy (566974) | more than 6 years ago | (#20970005)

Yeah, the days of getting excited about cashing my monthly Google cheque has pretty much ended.

Free with strings (1)

Wowsers (1151731) | more than 6 years ago | (#20964353)

Headline: We're offering MP3's for free!

Very very small print: You need to install this rootkit software to make the MP3's work, but we're telling you in advance this time, so you can't sue us.

Copyright enforcement: If you do something we don't allow to our MP3's, we reserve the right to make that Li-ion battery in your MP3 player go up in smoke. Just see all those laptop batteries as examples of how to enforce copyright!

[not aiming comments at specific companies mind]

i won't take this offer... (0)

Anonymous Coward | more than 6 years ago | (#20964539)

until they free up the source and go GPLv3!
Oh wait...

I usually sell good ideas (1)

Opportunist (166417) | more than 6 years ago | (#20964547)

This one's for free.

Create your music DRM free. Distribute it via your own tracker. Create some software for it that encorporates some PGP key exchange so "free" software can't access it. Load that software with P2P worked ads.

Effect: Since P2P software is usually notoriously slow and/or long running, people will see your ads. This will cover for the losses due to DRM freeness. Good PR is a given, even and especially amongst geeks, who have been criticising DRM for ages now and who are generally the loudest critics of DRM, and generally it will be seen as a good step forwards. Yes, the software will be cracked and the ads removed. This crack will not arrive at the masses, none have so far. 80+ percent of your userbase will watch the ads, they're used to it and don't see it as an intrusion. After the years of abuse, I would not recommend trying to collect data from your users, the fear of repercussions later would certainly cause many to give false data wherever possible.

You can use those ads to promote new acts and create more hype about artists you want to push. You could even push those songs down the P2P pipes to your customers, claiming those songs as freebies. Sample it down to 128kbit or less, and people will go out and get the "real thing" after listening to it.

For the MI critics here: The MI wants to make money. The way to this is either lock things down with DRM 'til nobody wants it anymore or offering them an alternative. This is one. It's viable. And something both sides could agree on. Business is a "give a little take a little" world, and will only be done willingly by both parties if both parties get the feeling that they got a fair deal out of it.

IDDIIIIIOOOOOTS (5, Insightful)

eiapoce (1049910) | more than 6 years ago | (#20964597)

My reply comes late and will be short. By reading the article you can get clear hints that iTunes is going to be the market leader for a very long time. I summarize them:

  • "Sony said recently that it would abandon its proprietary ATRAC copy-protection technology, and add Microsoft's Windows Media ... close its Connect Music Store". Translation - Fucking customers who bought previous players and registered the service.
  • "MTV Networks said it would abandon its own digital music service, called Urge, and pool its efforts with RealNetworks' Rhapsody" They fare even better, close the store screwing registered users and then as if this was not enought join forces with the most unsuccessful, worse DRMd and worse marketed player of all times
  • "get hardware makers to absorb the cost of a $5 monthly subscription" Selling hardware that works only on a rent basis!!! This is funny, I don't know anyone willing to buy somethin like that.
  • "CEO of Universal Music's [says] the share of revenue that Apple collects for each song sold on iTunes is "indecent,"" Labelling competition bad names instead of competing.
  • "the labels would like to charge different prices for new and older music" Now in economics this has actually a name. It is called market segmentation and is the most known way of screwing costumers by raping their surplus.
  • "nurture the adoption of other music players such as Microsoft's Zune": History teaches us that any business that made deals with microsoft has to face 2 quests. The first is to win the market. The second is avoiding MS to take over using anticompetitive practices and lawyers. By judging how they are dealing to the iTunes quest I guess those idiotic CEOs are deemed to fail both.

The real question is: who put them in charge? Their proposed exit strategy for media distribution sounds as "shoot us in the leg". If I had any stok or option on those companies I would consider selling them now before is too late.

Re:IDDIIIIIOOOOOTS (1)

doctor_no (214917) | more than 6 years ago | (#20965659)

Honestly, please stop using bolds everywhere and words like "IDDIIIIIOOOOOTS" (negates the point of bolds when half your submission is bolded). You're comments should be strong enough on the value of your words not by shoving them down everyone's throats by over the top formatting.

Re:IDDIIIIIOOOOOTS (2, Funny)

NewYorkCountryLawyer (912032) | more than 6 years ago | (#20971289)

Honestly, please stop using bolds everywhere and words like "IDDIIIIIOOOOOTS" (negates the point of bolds when half your submission is bolded). You're comments should be strong enough on the value of your words not by shoving them down everyone's throats by over the top formatting.
And to me I thought "IDDIIIIIOOOOOTS" was an understatement.

Pot, meet Kettle. Kettle, Pot. (2, Insightful)

Mike Van Pelt (32582) | more than 6 years ago | (#20966537)

This is one of the most hilariously funny parodies of over-the-top hypocrisy I have ever read --

CEO of Universal Music's [says] the share of revenue that Apple collects for each song sold on iTunes is "indecent,"
He's got to be aware of how outrageous it is for a music industry executive to be saying anything like that, doesn't he? Apparently not.

I think most everyone else had best not be drinking anything when they read his plaintive cry, though. Bad for keyboards and monitors...

Re:IDDIIIIIOOOOOTS (1)

NewYorkCountryLawyer (912032) | more than 6 years ago | (#20971239)

If I had any stok or option on those companies I would consider selling them now before is too late.
I think the Motley Fool investor web site agrees with you [blogspot.com] .

The underpants gnomes would be proud (1)

damburger (981828) | more than 6 years ago | (#20964665)

1. Alienate your customers by refusing to alter your business model
2. Once they all hate you, alter your business model
...
3. Profit

i wish them luck (1)

ralph1 (900228) | more than 6 years ago | (#20964949)

when cds came out i could buy most lp's for 5.99 - 10.99 cd were 21-44 i said the price will come down 20 some odd years latter it did not when music sharing came along i replace every cd i had purchased that quit working because of sun damage in my car. i had recorded to blank cassette tape from my radio or from tape to tape from othere tape or others cd. no one ever sued me in fact without that i would have never heard the music that i would go to the store and buy. any company that uses the courts to force it coustomers to buy music that they have purchased over and over to purchase it over yet again you know when i listen to an ad on the radio i am makeing a purchase. so no i say i will never buy music ever again untill the suing stops and i hear an apology. if that never comes neither will my dollars.

this is all very good for the consumer... (1)

bootchka (1173217) | more than 6 years ago | (#20964989)

this is all very good for the consumer but what about artists, i'd like to know how this would be included in royalties for each end every artist in the world, i cant see how they are going to make that work! there's more to it than just saying its free, but hey, record companies already screw the artists. Will they have a log of who downloads what then they dip into the bank of cash that the mp3 players make and pay them? Questions Questions!

Re:this is all very good for the consumer... (1)

NewYorkCountryLawyer (912032) | more than 6 years ago | (#20971275)

this is all very good for the consumer but what about artists, i'd like to know how this would be included in royalties for each end every artist in the world, i cant see how they are going to make that work!
I don't think they care much about that. They say they don't even know [blogspot.com] how much royalties they owe the artists. (See Oct. 11th letter of Richard L. Gabriel).

Trust sony after star wars galaxies (1)

unity100 (970058) | more than 6 years ago | (#20965081)

no sir, no can do. a corporate giant's credibility depends on its behavior towards customers in all its branches. if i get screwed over by some corp in any of its services or products, i dont go idiotically buying another of their product. and im not even talking about the rootkit gig.

What the title should be... (3, Funny)

supabeast! (84658) | more than 6 years ago | (#20965329)

If some real investigative journalism were going on, the article would be titled "How Sony and Universal plan to lobby Congress to force hardware makers to pay the record companies for a crappy music subscription service that consumers don't want."

Spiralfrog & imeem - Free & Legal Already (1)

illectro (697914) | more than 6 years ago | (#20966171)

Spiralfrog [spiralfrog.com] already offers 'DRM' tied downloads supported by advertising for some major labels, the downloads can be copied to 'plays for sure' media players but not burned to CD. Of course because it uses windows DRM its Windows + Internet Explorer only Meanwhile imeem AKA 'youtube for music' [imeem.com] lets you stream music uploaded by its users, providing the music is licensed from Sony, BMG, Warners or one of their other partners, it's a cooler approach in some ways because the user generated side of things gives you access to stuff that would never be heard on a catalog driven site. It works in any browser with a flash plugin so it's totally multiplatform, providing you just want to listen rather than download(and rate, comment, tag and all those other social things).

Go UMG Go! (0)

Anonymous Coward | more than 6 years ago | (#20966193)

Crush the evil 'Fake' Steve Jobs!

Wow... (1)

plazman30 (531348) | more than 6 years ago | (#20966453)

Universal is really trying to get control of the music business back from Apple. Looks like they're willing to use any means necessary to do so.

There's a huge Catch 22 here. I'm all for competition, but if they win, and crush the iPod, do you think we'll be better off? They're the music business after all. Out to screw the customer and the artist. In the end, we'll all lose out.

Andy

Re:Wow... (0)

Anonymous Coward | more than 6 years ago | (#20967431)

In the end, who's prepared to go 'nucular'? Who has the rights to Britney's vagina? [egotastic.com]

Re:Wow... (1)

NewYorkCountryLawyer (912032) | more than 6 years ago | (#20971315)

Universal is really trying to get control of the music business back from Apple. Looks like they're willing to use any means necessary to do so. There's a huge Catch 22 here. I'm all for competition, but if they win, and crush the iPod, do you think we'll be better off? They're the music business after all. Out to screw the customer and the artist. In the end, we'll all lose out.
Exactly. And we all know that by now. So why would anyone in his or her right mind buy into it?

By the way how could you call it "competition"... competitors joining forces to try to defeat someone else's business. Isn't that what you would call "anticompetitive"?

I certainly don't trust them. (1)

Lunarsight (1053230) | more than 6 years ago | (#20966647)

I don't trust UMG any further than I can throw them. Then offering free music is like a fox offering 'free meals' for hens. At this point, there is only one thing Universal Music Group could do that would make me happy - and that would be GO BANKRUPT. On the day they finally fall apart, I'll be the first person dancing on their proverbial grave and rejoicing.

Re:I certainly don't trust them. (1)

NewYorkCountryLawyer (912032) | more than 6 years ago | (#20971325)

I don't trust UMG any further than I can throw them. Then offering free music is like a fox offering 'free meals' for hens. At this point, there is only one thing Universal Music Group could do that would make me happy - and that would be GO BANKRUPT. On the day they finally fall apart, I'll be the first person dancing on their proverbial grave and rejoicing.
Let me give you fair warning, Lunar. I'm going to try to get there ahead of you. I want to be the first. May the best man win.

File format, drm used? (0)

Anonymous Coward | more than 6 years ago | (#20967551)

I must be dense (or did not have enough coffee yet), but TFA did not seem to specify the file format or even if there is DRM or no with this new service "they" want to set up. Are we talking about MP3, AAC, or some proprietary format like WMA?

And whilst it did not state it, I am under the impression this service will be purposely incompatible with the iPod: am I right?

I still don't understand why these companies are trying to hurt, no, kill the iTMS: no one prevents them to sell their stuff (to be polite) via other stores. I mean, if Steve Jobs wants the iTMS to keep a uniform+simple price structure for "his" store, why not let him have it whilst selling the same stuff on other download services/stores the way they want it to?

No matter what the Apple hatebois say, it's not as if Apple has the same kind of stranglehold on the downloadable music market that M$ has on the computer+software market. You can't avoid M$ in Real Life (*) whilst you can avoid Apple in audio & video. You can always buy another player and/or subscribe to other services to get the same music -- in fact, there is more non-iTMS music exclusivity (**) than there is iTMS-only music out there.

So "they" should let Steve sell stuff the way he wants, sell the same elsewhere the way "they" want and just let The Market(tm) decide. How can they loose? They'll always get their money, so what's the problem?

Or is it just insane, out of control greed, that makes "them" see red because they can't milk out that very last penny out of the consumer?

AC

(*) For example, try sending you CV in PDF instead of MSWord and see the reaction you'll get.

(**) One (bad) example is Saint-Preux, who sells his music only via FNAC in WMA.

I want an indemnity MP3 player to cover downloads (1)

scottsk (781208) | more than 6 years ago | (#20968183)

What I want is the option to buy an MP3 player that will indemnify me ("legal exemption from liability for damages") from any repercussions from MP3 downloads. If I buy this player, I have purchased the right to play whatever MP3 files I find online from RIAA member labels.

Or not even purchase the player, but just a certificate or something. Why don't they offer this so people who want to be honest can be? Your only real option is to buy music on CD to have a legal copy of it. Why isn't there a web site where you can register an MP3 you downloaded somewhere and pay $0.99 for it or whatever?

This would make more sense than these crazy DRM schemes and crippled players and non-standard audio formats that get cracked before they are in the wild.

Re:I want an indemnity MP3 player to cover downloa (1)

jskline (301574) | more than 6 years ago | (#20970277)

Technically that statement is wrong.

By the definitions set forth in print and media by the law teams for the RIAA, just ripping a copy of a CD in a computer constitutes theft. Thats their words.

It apparently doesn't matter that the "fair use" doctrine is in play here either. They are attempting to rewrite law as they go along and waiting for someone high up to challenge them on it.

They will ultimately kill the traditional business model of the record/CD medium, and also the rights by any human to hear any of the legacy music until they decide when and where.

Your only remaining music WILL come from new artists writing and performing songs by which the RIAA cannot come by and park on.

Re:I want an indemnity MP3 player to cover downloa (1)

NewYorkCountryLawyer (912032) | more than 6 years ago | (#20971391)

By the definitions set forth in print and media by the law teams for the RIAA, just ripping a copy of a CD in a computer constitutes theft. Thats their words. It apparently doesn't matter that the "fair use" doctrine is in play here either. They are attempting to rewrite law as they go along and waiting for someone high up to challenge them on it. They will ultimately kill the traditional business model of the record/CD medium, and also the rights by any human to hear any of the legacy music until they decide when and where.
You have accurately described the Law According to these record companies.

Your only remaining music WILL come from new artists writing and performing songs by which the RIAA cannot come by and park on.
Which is correct, except that old artists are dumping them also. See, e.g., Nine Inch Nails, Radiohead, Madonna. Now that the lawsuits have received so much publicity, and now that it's clear that these record companies are vestiges, I believe you're going to see many or most major artists decline to renew as their contracts run out. There is simply no reason any more to sign the oppressive recording agreements that have been the lifeblood of these now failing companies.

Less money for the artists (1)

White Flame (1074973) | more than 6 years ago | (#20969477)

Right now with the album sale model (and even the iTunes per-song sale model), the more popular a group is, the more money it brings in and the band and label each get a cut. Under this model, the labels get pretty much a flat fee and decide which groups to budget it to. There is absolutely zero incentive for a band who wants to make it big to buy into this load of garbage.

Remember what Steve posted (1)

bgspence (155914) | more than 6 years ago | (#20969745)

Steve Jobs
February 6, 2007

With the stunning global success of Apple's iPod music player and iTunes online music store, some have called for Apple to "open" the digital rights management (DRM) system that Apple uses to protect its music against theft, so that music purchased from iTunes can be played on digital devices purchased from other companies, and protected music purchased from other online music stores can play on iPods. Let's examine the current situation and how we got here, then look at three possible alternatives for the future.

To begin, it is useful to remember that all iPods play music that is free of any DRM and encoded in "open" licensable formats such as MP3 and AAC. iPod users can and do acquire their music from many sources, including CDs they own. Music on CDs can be easily imported into the freely-downloadable iTunes jukebox software which runs on both Macs and Windows PCs, and is automatically encoded into the open AAC or MP3 formats without any DRM. This music can be played on iPods or any other music players that play these open formats.

The rub comes from the music Apple sells on its online iTunes Store. Since Apple does not own or control any music itself, it must license the rights to distribute music from others, primarily the "big four" music companies: Universal, Sony BMG, Warner and EMI. These four companies control the distribution of over 70% of the world's music. When Apple approached these companies to license their music to distribute legally over the Internet, they were extremely cautious and required Apple to protect their music from being illegally copied. The solution was to create a DRM system, which envelopes each song purchased from the iTunes store in special and secret software so that it cannot be played on unauthorized devices.

Apple was able to negotiate landmark usage rights at the time, which include allowing users to play their DRM protected music on up to 5 computers and on an unlimited number of iPods. Obtaining such rights from the music companies was unprecedented at the time, and even today is unmatched by most other digital music services. However, a key provision of our agreements with the music companies is that if our DRM system is compromised and their music becomes playable on unauthorized devices, we have only a small number of weeks to fix the problem or they can withdraw their entire music catalog from our iTunes store.

To prevent illegal copies, DRM systems must allow only authorized devices to play the protected music. If a copy of a DRM protected song is posted on the Internet, it should not be able to play on a downloader's computer or portable music device. To achieve this, a DRM system employs secrets. There is no theory of protecting content other than keeping secrets. In other words, even if one uses the most sophisticated cryptographic locks to protect the actual music, one must still "hide" the keys which unlock the music on the user's computer or portable music player. No one has ever implemented a DRM system that does not depend on such secrets for its operation.

The problem, of course, is that there are many smart people in the world, some with a lot of time on their hands, who love to discover such secrets and publish a way for everyone to get free (and stolen) music. They are often successful in doing just that, so any company trying to protect content using a DRM must frequently update it with new and harder to discover secrets. It is a cat-and-mouse game. Apple's DRM system is called FairPlay. While we have had a few breaches in FairPlay, we have been able to successfully repair them through updating the iTunes store software, the iTunes jukebox software and software in the iPods themselves. So far we have met our commitments to the music companies to protect their music, and we have given users the most liberal usage rights available in the industry for legally downloaded music.

With this background, let's now explore three different alternatives for the future.

The first alternative is to continue on the current course, with each manufacturer competing freely with their own "top to bottom" proprietary systems for selling, playing and protecting music. It is a very competitive market, with major global companies making large investments to develop new music players and online music stores. Apple, Microsoft and Sony all compete with proprietary systems. Music purchased from Microsoft's Zune store will only play on Zune players; music purchased from Sony's Connect store will only play on Sony's players; and music purchased from Apple's iTunes store will only play on iPods. This is the current state of affairs in the industry, and customers are being well served with a continuing stream of innovative products and a wide variety of choices.

Some have argued that once a consumer purchases a body of music from one of the proprietary music stores, they are forever locked into only using music players from that one company. Or, if they buy a specific player, they are locked into buying music only from that company's music store. Is this true? Let's look at the data for iPods and the iTunes store - they are the industry's most popular products and we have accurate data for them. Through the end of 2006, customers purchased a total of 90 million iPods and 2 billion songs from the iTunes store. On average, that's 22 songs purchased from the iTunes store for each iPod ever sold.

Today's most popular iPod holds 1000 songs, and research tells us that the average iPod is nearly full. This means that only 22 out of 1000 songs, or under 3% of the music on the average iPod, is purchased from the iTunes store and protected with a DRM. The remaining 97% of the music is unprotected and playable on any player that can play the open formats. It's hard to believe that just 3% of the music on the average iPod is enough to lock users into buying only iPods in the future. And since 97% of the music on the average iPod was not purchased from the iTunes store, iPod users are clearly not locked into the iTunes store to acquire their music.

The second alternative is for Apple to license its FairPlay DRM technology to current and future competitors with the goal of achieving interoperability between different company's players and music stores. On the surface, this seems like a good idea since it might offer customers increased choice now and in the future. And Apple might benefit by charging a small licensing fee for its FairPlay DRM. However, when we look a bit deeper, problems begin to emerge. The most serious problem is that licensing a DRM involves disclosing some of its secrets to many people in many companies, and history tells us that inevitably these secrets will leak. The Internet has made such leaks far more damaging, since a single leak can be spread worldwide in less than a minute. Such leaks can rapidly result in software programs available as free downloads on the Internet which will disable the DRM protection so that formerly protected songs can be played on unauthorized players.

An equally serious problem is how to quickly repair the damage caused by such a leak. A successful repair will likely involve enhancing the music store software, the music jukebox software, and the software in the players with new secrets, then transferring this updated software into the tens (or hundreds) of millions of Macs, Windows PCs and players already in use. This must all be done quickly and in a very coordinated way. Such an undertaking is very difficult when just one company controls all of the pieces. It is near impossible if multiple companies control separate pieces of the puzzle, and all of them must quickly act in concert to repair the damage from a leak.

Apple has concluded that if it licenses FairPlay to others, it can no longer guarantee to protect the music it licenses from the big four music companies. Perhaps this same conclusion contributed to Microsoft's recent decision to switch their emphasis from an "open" model of licensing their DRM to others to a "closed" model of offering a proprietary music store, proprietary jukebox software and proprietary players.

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. If the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM-free music on our iTunes store. Every iPod ever made will play this DRM-free music.

Why would the big four music companies agree to let Apple and others distribute their music without using DRM systems to protect it? The simplest answer is because DRMs haven't worked, and may never work, to halt music piracy. Though the big four music companies require that all their music sold online be protected with DRMs, these same music companies continue to sell billions of CDs a year which contain completely unprotected music. That's right! No DRM system was ever developed for the CD, so all the music distributed on CDs can be easily uploaded to the Internet, then (illegally) downloaded and played on any computer or player.

In 2006, under 2 billion DRM-protected songs were sold worldwide by online stores, while over 20 billion songs were sold completely DRM-free and unprotected on CDs by the music companies themselves. The music companies sell the vast majority of their music DRM-free, and show no signs of changing this behavior, since the overwhelming majority of their revenues depend on selling CDs which must play in CD players that support no DRM system.

So if the music companies are selling over 90 percent of their music DRM-free, what benefits do they get from selling the remaining small percentage of their music encumbered with a DRM system? There appear to be none. If anything, the technical expertise and overhead required to create, operate and update a DRM system has limited the number of participants selling DRM protected music. If such requirements were removed, the music industry might experience an influx of new companies willing to invest in innovative new stores and players. This can only be seen as a positive by the music companies.

Much of the concern over DRM systems has arisen in European countries. Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free. For Europeans, two and a half of the big four music companies are located right in their backyard. The largest, Universal, is 100% owned by Vivendi, a French company. EMI is a British company, and Sony BMG is 50% owned by Bertelsmann, a German company. Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly.

Unbelievable (3, Insightful)

NewYorkCountryLawyer (912032) | more than 6 years ago | (#20971153)

1. Have these guys ever heard of antitrust laws?

2. Don't they realize that their antitrust combination to try to defeat Apple would be a flagrant violation of antitrust law?

3. Why are they incapable of just trying to compete with someone in a fair and open way?

4. Who in the US would be stupid enough to patronize their new venture and thus subsidize their RIAA lawsuits against the American people.

5. SONY BMG are the guys who just testified in Capitol v. Thomas [blogspot.com] that it is illegal for people to copy their cd's onto their computers for personal use.

Anyone who would buy anything from these companies is an idiot.

Bah.... who trusts Sony (1)

Blue_Wombat (737891) | more than 6 years ago | (#20979339)

I have been screwed by Sony before, and won't buy their craptastic overpriced proprietary junk again. This is the Sony that is pushing ARCOSS, BD+ and every other DRM-poisoned abomination known to man on us. Does anyone think they are doing this bec1ause they want to - its a desperation move because their multiple attempts to fall back on their tried and true strategy of ass-raping their paying customers has failed them in this market. Even if this worked, as soon as the got c1ritic1al mass they would c1ome up with a way to screw the people who had been taken in.
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