Brent Hodgson, Copywriter

nce upon a time it was expensive to record music.

It required expensive sound equipment and highly skilled audio engineers to record on fragile and costly recording mediums.

Records were then produced by some of the most advanced machines of the time, scratched into the surface of on fragile and expensive vinyl discs, and distributed to radio stations around the world carefully so as the discs didn’t break.

It required a significant expense, and a lot of resources - which meant an effective record industry had to be run by large corporations.

But those dark times have come and gone.

Nowdays, independent artists like Lior can record, edit, produce, publish and publicise their music with little more than a microphone, a computer, and access to the internet.

Have a look:

Although it’s a goal of most recording artists to have a good recording contract, Lior is living proof that you don’t need a big recording contract to make it big in the music world nowadays.

Similarly, consumers have declared (with their wallets) that they aren’t willing to pay up to AUD$30 for a new release CD anymore. That has seen CD sales decline a whopping 23% worldwide between 2003 and 2005.

Instead, consumers want their music for free… or at least at a low cost.

After all, it’s the way consumers have been listening to the latest music for years - broadcast for free via radio stations, or a low cost via MTV. More recently, satellite radio has entered this mix… as have MP3 players, Podcasts, internet radio stations.

And with high speed internet, and portable digital music devices such as the iPod, it’s never been easier (or cheaper!) for music to be shared, distributed or broadcast to the masses.

Long term, this stands to be a positive change for the music industry.

We’ve seen the birth of a music industry which allows musicians and consumers to interact directly with each other (without the need for corporate middle-men).

This will give consumers access to a greater variety of music, and allow a back door for musicians to be discovered and achieve fame - like Sydney band Sick Puppies when their song went uber-viral as a result of this YouTube video…

Having said that, it could mean the days of musicians earning zillions of dollars are over too.

So where do the big four music companies fit into this equation?

Frankly… They don’t.

Losing their stranglehold on sales, they’ve tried desperately to retain control of a fast-shrinking industry through regulation.

To address the fact they are losing market share to the internet, they started selling songs online.

However, these songs were protected by “Digital Rights Management” (or DRM) software, which provided the consumer only restricted access to these songs. This meant consumers could only play the songs in certain MP3 players, or on a single computer etc.

In a sense, it punished the people who were buying legitimate downloadable versions of music rather than their unrestricted free (illegal) counterparts. So there was little benefit for consumers to BUY restricted songs when they could download the same songs for free - and play them anywhere they liked.

But there’s good news on DRM.

Three days ago, Steve Jobs of Apple posted an article, his “Thoughts on Music”, where he discusses the future of DRM.

In his article, he makes a ground-breaking statement:

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….

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.

He closes by making the comment;

Convincing [the big 4 music companies] to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly.

Wow! iTunes is doing a complete backflip after recent European court cases and pressure from consumers, and going no-DRM

Personally, I hope Steve Jobs gets his wish. I’ve bought a whole stack of music of iTunes because of my moral objection to using Torrents to download music.

However, not owning an iPod (instead, I own a generic MP3 player) means it’s nearly impossible for me to play this music anywhere other than on my PC.

That sucks!

And as a result, I’m finding it increasingly difficult to justify buying music from iTunes (and be restricted to my own computer) when I can get the same tunes for free, and play them in my car, out jogging - anywhere.

So I’m 100% behind this push for a DRM-free iTunes…

Finally! I won’t be punished for buying music instead of stealing it!

Brent

P.S. - Lesson for smart marketers - listen to what the consumer wants, and give it to them.

Case in point: Microsoft recently released two new products - it’s new operating system, Windows Vista, and the Zune MP3 player. A key feature in both is a DRM protection feature, which acts to encumber or restrict how both products can be used - hardly a selling feature for consumers.

Restricting how your customer uses your product is a bad idea, because consumers don’t want to be limited by you in how they can use something they bought from you.

For eBook publishers the lesson is, to publish your eBook in PDF format. From personal experience, I can tell you straight down the line that the sales you lose because of piracy will be insignificant compared to the problems publishing on rights-protected eBook formats will cause you.

P.P.S. - Kudos to Ed Dale and his post “Viva La Revoultion - The Music Industry Is Dead, Long Live The Music Industry!” (where this story first popped up on my radar)… Even though he is a rotten Croc-wearing, peace-lovin’, Mac-usin’, Apple advocatin’ hippie. *shudders*

Edit - 9th February, 2007 - Warner Music have responded directly to Steve Jobs’ open letter. The fourth largest of the big four music labels, it remains unconvinced that anti-DRM is the way to go.

http://news.bbc.co.uk/2/hi/business/6344929.stm 

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