DRM Watch 2008: Year in Review, Part 1
Extract:
Meanwhile, DRM for music has largely disappeared. Ironically enough, its last major redoubt is Apple's iTunes, which remains the predominant music retail site in the US and most other countries in which it operates. DRM is a requirement in the major record labels' licensing agreements with Apple (except EMI), and the majors have not relented on this requirement as they continue to seek viable competitors to iTunes. Amazon is the biggest of these but apparently has not made much impact on iTunes' market share.
Otherwise, the major music companies have been making licensing deals in which they progressively give away more content rights each time in search of traffic for ad revenue -- or, as Jonathan Zittrain of Harvard Law School has put it, they are attempting to profit from abundance instead of scarcity. It is now possible for MySpace users to stream music on demand for free (and for Google users in China to download it in MP3 for free). In the latest iterations of this process, Datz Music Lounge in the UK has an agreement with Warner Music and EMI to provide a year's worth of unlimited MP3 downloads for GBP 100 (US $147), and users of certain Nokia handsets get a year's worth of unlimited downloads bundled into the price of the device (see below).
Despite their protests to the contrary, we believe it's only a matter of time until the majors make a deal with some future source of huge Internet traffic to provide free MP3 downloads in exchange for an ad revenue share. Facebook is a leading suspect. We give this process until the end of 2010, at the latest, to run its course.
Is there a place for DRM anywhere in the music industry? For the moment, apart from iTunes, DRM is still used for Internet subscription services like Rhapsody and Napster. With MySpace (and others soon, to be sure), users can stream their choice of music at any time. Rhapsody and Napster offer "To Go" portable device transfer services that make them preferable, but those services, mostly based on Windows Media DRM, are somewhat clunky and will fall by the wayside as mobile broadband becomes more ubiquitous -- though by then, users will also be able to transfer their free MP3s to many types of portable devices.
The major music companies also hope to hang on to DRM for over-the-air mobile music. The landmark deal for mobile music this year has been Comes with Music, Nokia's arrangement with the majors (except EMI) to subsidize unlimited DRM-packaged music downloads for a year with certain Nokia handsets -- in other words, to get device makers instead of advertisers or users to pay for music. Comes with Music launched in the UK in October; its success remains to be seen.
The concern is that if the music industry hangs on to DRM for over-the-air music delivery, consumers will simply find ways of working around it (legal or otherwise), and therefore that the noose will tighten around mobile DRM for music as well. The mobile DRM market is still fragmented: Microsoft made a number of pre-announcements around PlayReady, its new mobile DRM, back in February. But not until this month did it announce an actual deployment for PlayReady, for BSkyB's Silverlight-based Sky Player TV service. There are plenty of mobile music services that use OMA DRM 1.0, and various other DRMs have small market shares.
No comments:
Post a Comment