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Wednesday, April 04, 2007

EMI Breaks Apple's DRM-Activated Distribution Stranglehold

The Guardian notes the release of EMI's first album distributed in a high-quality MP3 format without DRM controls, a policy that EMI will apply to all releases except for music from the Beatles' catalog. Individual tracks will be available for USD 30 cents more than the Apple FairPlay DRM-encoded tracks, though CNET News notes that EMI will continue to make tracks available via FairPlay and will not offer upgrades to people who already own FairPlay content. An entire album goes for GBP 7.99 - that's about USD 16, a typical going price. In sum EMI did the math and realized that there was a fairly specific and predictable amount of revenue loss that could be expected through online piracy and decided that the gain from increased exposure made non-DRM encoded content a cost-effective alternative.

More importantly it gives EMI the ability to move its marketing beyond Apple's iPod and eliminate the artificial stranglehold that proprietary DRM had placed on its online distribution strategies. EMI is now free to manage its sales through whatever channels it sees fit - and in doing so open up more contextual points of contact with the purchasing public. This move is not likely to dent sales of the popular iPod any time soon but with more music being consumed on mobile phones and other trend-setting devices a platform-agnostic approach to content distribution will allow EMI to keep their content in the ears and minds of their audiences more easily - and increase their ability to keep its popularity flowing regardless of the platforms that users opt for.

If there was a DRM scheme that was future-proof and non-proprietary it may have been otherwise but for now EMI has decided to adapt to the economics of users managing their content the way that they'd like to. And in the end that's a good thing for both EMI and their audiences if it makes their content more popular and usable. Hopefully music producers develop more enhanced packaging for their content that adds value to the underlying product and to their knowledge of how it is used and distributed. But until that can be done in a standards-based format the music industry appears to be ready to use existing standards as a way to reach audiences as efficiently as possible.

Labels: EMI, intellectual property, mobile, Trends

By John Blossom - posted at 10:47 AM

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2 comments (click to view or to add your own)

Comments:

Let's see how incipient you can get:

"More importantly it gives EMI the ability to move its marketing beyond Apple's iPod"

EMI was somehow prevented from marketing to non-iPods?

"and eliminate the artificial stranglehold that proprietary DRM had placed"

What would non-proprietary DRM be? Something that comes with its on decryption key? Can you name just one major label, including EMI, that had allowed Apple to distribute its content without DRM? So if there's any artificiality, it was directly and solely caused by the likes of EMI. Heck, even the Apple-hostile EU came to the same conclusion.

"its online distribution strategies."

EMI had an online distribution strategy?

"EMI is now free to manage its sales through whatever channels it sees fit"

And it couldn't do this in the past?

What transparent bias! Shame on you.

# posted by

Anonymous : 12:34 AM

Thanks for your comments, my thoughts below:

Let's see how incipient you can get:

"More importantly it gives EMI the ability to move its marketing beyond Apple's iPod"

EMI was somehow prevented from marketing to non-iPods?
John: With a virtual lock on premium online sales Apple has become the default price-setter for online music.

"and eliminate the artificial stranglehold that proprietary DRM had placed"

What would non-proprietary DRM be? Something that comes with its on decryption key? Can you name just one major label, including EMI, that had allowed Apple to distribute its content without DRM? So if there's any artificiality, it was directly and solely caused by the likes of EMI. Heck, even the Apple-hostile EU came to the same conclusion.
John: The problem is that the music producers were content to settle on DRM schemes that were compatible only with specific platforms rather than insisting on a cross-platform DRM scheme. In doing so they have created the worst of both possible worlds: the inability for users to carry their collection across multiple platforms, this ensuring inflated prices for those platforms, and the reliance on those vendors to sustain the value of their collections to their users. That was fine when old technology such as 8-tracks would obsolesce content packaging easily but that's much harder to do now.

"its online distribution strategies."

EMI had an online distribution strategy?
John: Not a very kind outlook, but I would have to agree that for most music companies online distribution has not been well thought out.

"EMI is now free to manage its sales through whatever channels it sees fit"

And it couldn't do this in the past?
From a practical standpoint, no. By locking themselves into Apple's DRM as the dominant packaging they limited their platform strategy - and had to duplicate it across any platform where they wanted to sell their music. Not very efficient.

What transparent bias! Shame on you.
John: Not sure what you perceive as the bias, but I would agree that I am biased against content producers who see more value in locking down content than in producing value for their audiences.

# posted by

John Blossom : 10:07 AM