Major labels to abandon DRM      

IFPI logoYesterday’s post about Digital Rights Management prompted an email conversation with Paul Birch, who is a member of the exec committee and main board of the International Federation of Phonographic Institutes (IFPI) as well as the BPI Council and Chairs International.

According to Birch, the major labels have decided to abandon Digital Rights Management. They haven’t announced it yet — but it’s coming soon. In the wake of the Sony BMG Rootkit debacle, and in the light of the competitive advantage logic, it makes perfect sense.

Birch writes:

DRM as we know it is over. There may be Son of DRM but that’s another matter. Right now its dead, the majors are moving towards the new model. The one thing you can be sure of is they will still be at the centre of the world music industry whatever happens. The independents are another matter. As our sector’s share has fallen by almost half in just over twelve months, the new model for us is partnership. It always was, I’m just not sure we got it.

While Birch himself runs an independent record label (Revolver Records) and I have no cause to doubt the sincerity of his pledge of allegiance to the majors, I’m not sure all independent labels would jump on board the partnership model ‘major labels are our future’ sentiment, and nor am I as optimistic as Birch about their continued centrality.

In fact, while the majors may well declare a moratorium on DRM any day now, it seems unlikely that the people who get the real advantage from it will walk away. Apple’s FairPlay DRM and Microsoft’s PlaysForSure DRM are likely to be with us for a while, because they protect against disruptive technological innovation. This was never about piracy.

The major labels are, predominantly, (1) financiers, (2) filters and (3) marketeers for music.

Recently, (1) other similarly large (and traditionally non-music) corporations are spending significant sums on music; (2) increasingly sophisticated filtering systems are emerging that give exposure and choice to a much wider range of artists and consumers; and (3) the marketing track record for the majors has been patchy of late — particularly from a PR perspective.

While it’s good news that the majors have abandoned DRM as a bad job, it’s too soon to say that they’ve attained digital enlightenment. They are still under serious threat because they have not been quick to evaluate and accommodate new practices.

More importantly, I’m concerned that giving up the ‘protection’ of DRM will lead to other, even less acceptable tradeoffs. Increased surveillance on the online activities of their customers, more hostile lawsuits, increasingly draconian End User Licensing Agreements, and additional recoupable costs passed onto artists to pay for it all (with a nice, healthy margin to boot) are all potential ‘Sons of DRM’ we may need to keep an eye out for in future.


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Published:
November 12, 2006 – 10:23 am
Author:
By Dubber
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23 Trackbacks

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  1. By LawFont » DRM is dead (again) on November 23, 2006 at 11:18 pm

    [...] Link to full story here. To really believe this, however, I want to see their head lawyers say this. Because I have this feeling – maybe wrong – that the chief people aren’t necessarily the (only) problem here. When it gets down as far as the lawyers, things can morph. [...]

  2. By links for 2006-11-23 « Dark Corner of the Empty Head on November 23, 2006 at 11:23 pm

    [...] New Music Strategies » Blog Archive » Major labels to abandon DRM Yesterday’s post about Digital Rights Management prompted an email conversation with Paul Birch, who is a member of the exec committee and main board of the International Federation of Phonographic Institutes (IFPI) as well as the BPI Council and Chairs (tags: drm music news politics) [...]

  3. By » Links for 24-11-2006 » Velcro City Tourist Board » Blog Archive on November 24, 2006 at 2:19 am

    [...] 4 – Major labels to abandon DRM “…the major labels have decided to abandon [DRM]. They haven’t announced it yet – but it’s coming soon. In the wake of the Sony BMG Rootkit debacle, and in the light of the competitive advantage logic, it makes perfect sense.” (tags: labels major DRM copyright property intellectual IP content media digital industry music) [...]

  4. By RadioStatic » Blog Archive » This Reminds Me of a Horror Movie Sequel - DRM is DEAD? on November 24, 2006 at 1:11 pm

    [...] This article claims DRM is about to die. The "bad sequel" part of it is that it mentions a "son of DRM". Why does that remind me of Son of Frankentien? [...]

  5. By El Diablo en los Detalles | ¿El fin de DRM? on November 24, 2006 at 7:18 pm

    [...] ¿Es esto posible? En un artículo (enlazado en Boing Boing), se publica un intercambio por email entre el autor del blog y Paul Birch, un ejecutivo de la Federación Internacional de la Industria Fonográfica (la misma institución de las 8000 demandas). Habla Birch: DRM como es conocido hoy se acabó. Quizás habrá un Hijo de DRM pero ese es otro tema. Ahora esta acabado, y las Grandes [Compañias Discográficas] se están moviendo hacia un nuevo modelo. De lo que puedes estar seguro es que seguirán estando al centro del mundo de la música pase lo que pase. Las [Discográficas] independientes son otro tema. En la medida que nuestra participaci’on el el mercado ha disminuido a casi la mitad en los últimos [...]

  6. By testblog » links for 2006-11-26 on November 26, 2006 at 12:33 am

    [...] New Music Strategies » Major labels to abandon DRM (tags: ifpi drm music) [...]

  7. By The Small Print Project » Dispatches from DRM World on November 26, 2006 at 1:16 am

    [...] RIAA Declares DRM Dead — Paul Birch, an executive at IFPI (International Federation of Phonographic Institutes) said “DRM as we know it is over. There may be Son of DRM but that’s another matter. Right now its dead, the majors are moving towards the new model. The one thing you can be sure of is they will still be at the centre of the world music industry whatever happens. The independents are another matter. As our sector’s share has fallen by almost half in just over twelve months, the new model for us is partnership. It always was, I’m just not sure we got it.” — via Cory. [...]

  8. By Linkfest: Sony defects, Xbox gripes, Zune Wi-Fi hacked at techVine.org on November 26, 2006 at 3:50 pm

    [...] • And speaking of hacks . . . Thanks to some rulings by the Library of Congress, you can now unlock your cell-phone for use with other carriers; crack the copy protection on “abandonware,” software that’s no longer sold or supported; grab film clips from copyrighted DVD for educational compilations; and legally hack copy protection if you’re a researching looking for security flaws and vulnerabilities, such as in the case of Sony BMG’s infamous rootkit DRM. Meanwhile, there are indications the major music labels are considering abandoning DRM. Sounds like wishful thinking to me, but a geek can dream, can’t he?  [...]

  9. By Der Kopierschutz ist tot, es lebe der Kopierschutz » WIR HABEN BEZAHLT! - Für günstige, legale und DRM-freie Musik. on November 27, 2006 at 10:39 am

    [...] Paul Birch vom internationalen Verband der Phonoindustrie IFPI läutete die Begräbnisglocken über dem Kopierschutz: “DRM as we know it is over.” Eine “andere Sache” sei aber seine Wiederauferstehung: “There may be a Son of DRM”. Eine schöne Metapher, die man ansonsten mit wiedererstehenden Monstern in Horrorfilmen assoziiert. [...]

  10. By Teriyaki’s Donut » Falling To Pieces on November 27, 2006 at 3:08 pm

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  11. By Bricolage Fantasy » Weekend Note on November 27, 2006 at 3:41 pm

    [...] Insightfull. What exactly is the relevancy of major label in the age of highspeed internet? New music strategy muses: “The major labels are, predominantly, (1) financiers, (2) filters and (3) marketeers for music.” But now we are in new era where corporation like “google” or MySpace are offering alternative means to connect music. “Recently, (1) other similarly large (and traditionally non-music) corporations are spending significant sums on music; (2) increasingly sophisticated filtering systems are emerging that give exposure and choice to a much wider range of artists and consumers; and (3) the marketing track record for the majors has been patchy of late — particularly from a PR perspective.” [...]

  12. By ifpi Board Member Quoted as Saying Major Labels About to Abandon DRM at iMedia Law Blog on November 28, 2006 at 12:29 am

    [...] I just came across this New Music Strategies blog post quoting Paul Birch, Managing Director of indie-label, Revolver Records, and independant member of the ifpi’s board of directors, as saying the following in an e-mai: DRM as we know it is over. There may be Son of DRM but that’s another matter. Right now its dead, the majors are moving towards the new model. The one thing you can be sure of is they will still be at the centre of the world music industry whatever happens. The independents are another matter. As our sector’s share has fallen by almost half in just over twelve months, the new model for us is partnership. It always was, I’m just not sure we got it. [...]

  13. By Naik’s News » Record industry association declares DRM dead on November 28, 2006 at 9:38 am

    [...] Link [...]

  14. By Major labels to abandon DRM :: Newstack on December 7, 2006 at 4:45 pm

    [...] Read more: here [...]

  15. By Mark Blevis » Is DRM really dead? on December 24, 2006 at 4:16 pm

    [...] The New Music Strategies site is reporting that the major music labels are planning to abandon DRM. While the demise of DRM may sound like a rosey idea, you can bet that the industry is working on another model – the Son of DRM – as the site reports. [...]

  16. By Random Thoughts » Blog Archive » Fun buying CDs again? on January 12, 2007 at 1:02 am

    [...] Major labels to abandon DRM [...]

  17. By Entertainment and Business « IPR Library on September 18, 2007 at 12:57 am

    [...] Entertainment and Business September 18, 2007 Posted by iprlib in Uncategorized. trackback New Music Strategy [...]

  18. By digital in London » Blog Archive » Flash with DRM on September 20, 2007 at 4:17 pm

    [...] Takes the shine off the ‘wave’ of anti-DRM activity currently promised. [...]

  19. By Major Music Labels To Offer Unlimited Downloads? « Burned At Both Ends on April 1, 2008 at 5:59 pm

    [...] of course, when music execs said DRM was a bad idea, they really meant that it wasn’t making them any money on the current, broken “per [...]

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  21. By Trabalho Sujo » Arquivo » Ih… - OESQUEMA on January 7, 2009 at 5:48 am

    [...] só mais um Macbook; – Músicas vendidas sem DRM (depois que RIAA desistiu de processar neguinho e de todas as gravadoras terem abandonado o sistema de proteção anticópias) – mas com preço mais caro justamente por causa disso [...]

  22. By Recording And Guitar News | The Gibson Les Paul Electric Guitar Blog on March 6, 2009 at 12:16 am

    [...] Major labels to abandon DRM | New Music Strategies – Yesterday’s post about Digital Rights Management prompted an email conversation with Paul Birch, who is a member of the exec committee and main board of the. [...]

  23. By Blog Interiuris – Andy Ramos » Blog Archive » ¿Qué futuro le espera a las medidas tecnológicas? on March 9, 2011 at 2:43 pm

    [...] en la línea de Paul Birch, presidente de una pequeña independiente y miembro de la IFPI, quien afirma que el escenario de [...]

20 Comments

  1. Matt_

    DRM does not work but Digital Watermarking does and then if the record industry finds a file that has your ID emebeded in the Watermark on a file sharing network then they will possibly take legal action agaist you .

    They will also use Digital Fingerprinting to help fiter copyrighted works off the ISPs pipes and they will ask all filesharinging companies to possibly join in a collective licening model like radio stations already do .

    Posted November 24, 2006 at 1:07 am | Permalink
  2. Vay

    Maybe I’m in for a music free future, but I will not buy another song until a ‘you buy it you own it’ policy. I’d rather listen to a dripping faucet than deal with these greedy bastards. I have well over 300 Cd’s but my collecting days are over. They better grow up and relax if they want more of my money.

    Posted November 24, 2006 at 8:37 am | Permalink
  3. Paul Birch

    It’s accurate that I said this, if it will come to pass is another matter. It’s purely a prediction and not something I have overheard said at a board table.

    I am neither advocating DRM’s demise or its continuance by the way. Just reporting on where I see things heading.

    The reference to “partnership is the future by the way”; what I was discussing there was partnership with each other. I don’t rule out a kind of partnership with the majors but that would depend upon the two sectors re-establishing trust. The real challenge for Independents is abandoning the “don’t crush us we are small and we hurt” sentiment, and picking up real differentiation strategies established through mechanisms such as corporate social responsibility.

    Independents have difficulty in working together in real strategic partnerships. Corporations have practiced these type of realtionships since the days of the East India Trading Company.

    It would be naive to think that 1/. The majors wont be at the centre of the new model what ever that might be or 2/. Rights will in some way go unprotected.

    I would expect to see some augmentation of existing structures but not the abandonment of the core values that binds the industry together.

    By the way if we look at the history of the Music Industry, there was corporate shuffling in the 80′s and 90′s when BMG took over RCA, when Warner merged with Time and then acquired AOL, when Sony took over CBS, when EMI de-merged from Thorn and when MCA was taken over by Matsusitu only then to be merged into PolyGram to form the new Universal company. Why should we be surprised then that these companies should now consolidate?

    Corporations do it all the time. If HP and Compaq can do it why not Universal and BMG music publishing?

    In fact if they didn’t consolidate the transition to the new model would fail. That would leave the Record Industry ripe to take-over by World sized corporation that dwarf the major labels.

    Does the Industry seriously think that Apple, Microsoft or any Telco you care to mention would be better guardians of our fragile rights?

    My money is on the majors acquisition of new media companies, placing them at the centre of a new world music entertainment industry. They should neither be the way us Indie labels define ourselves nor should they be our model for aspiration. They are what they are. The big question is what are we? What’s our strategy? How will we move to the new model?

    Posted November 25, 2006 at 3:02 pm | Permalink
  4. Mariomax

    Don’t count DRM out yet. There’s an exciting new version coming out very soon.

    STAY TUNED.

    Posted November 29, 2006 at 3:23 pm | Permalink
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