
Alastair Grant/Associated Press
Papa Jobs’ love letter must’ve had an influence on the good people over at EMI.
Yesterday, The New York Times reported that EMI will no longer be deploying DRM (digital rights management) on the music files that it sells via iTunes. The trade-off? $.30/song more.
The issue of DRM has been one of the most hotly debated topics in the music industry since it sparked on to the scene by Napster and other peer-to-peer MP3-sharing systems.
Today there are several different approaches that music labels use to try and prevent others from mooching off the guy next door’s wad of tunes in his iPod. Sony failed miserably, some prevent use on other devices all together, others can be cracked in seconds.
So as the RIAA is out there trying to stop students from swapping music around at Universities, today’s announcement is somewhat of an admission of defeat.
The math probably went something like: we know x% of people who get access to a music file are going to swap it with an average of x.xx people over a certain period (factoring in those who purchase a file may have different swapping ethical standards), so the premium that we could charge ($.30 in this case, plus they’re offered at higher sound quality) could actually create incremental demand from those who want to legitimize his/her right to swap, and make it work such that it offsets assumed losses from those who won’t buy the song now with those who won’t buy because of the higher price actually allows EMI to break even or make even more money than the status quo.
From the article:
Mr. Nicoli said early market tests showed EMI that consumers widely preferred to buy songs without copy protection, even at a higher cost. Unrestricted tracks outsold the others at a rate of 10 to one, he said.
Steve Jobs, the chief executive of Apple, who shared the stage with Mr. Nicoli for the announcement, predicted that half of the songs available on iTunes would be sold without restrictions by the end of the year. None of the other three major record labels, which with EMI account for 70 percent of songs sold today, have said how they might react.
But then again, we’re just PR dudes who like music.