DRM And The Music Industry

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Steve Jobs created a stir earlier this month when he published his anti-DRM open letter to the music industry. A majority of the music industry viewed the letter as a threat to their income. Independent US labels felt they were left out of the conversations entirely, since they currently sell music without DRM.

European music executives have voiced their opinions in a Jupiter Research study conducted this past December and January. Around 62 percent felt that digital music would be better off with DRM-free files that could be played on any player-not just iPods which had been an issue in France.

In addition 70 percent of European music executives believes that the future of downloadable music is making tracks play on as many different players as possible. Another 54 percent feel the current DRM systems are too restrictive according to the Jupiter study.

eMarketer projects that digital music spending will increase to $5 billion in 2010, up from $1.1 billion in 2005. The US accounted for about 59 percent of the digital music market worldwide in 2005, eMarketer expects this to decline to 42 percent in 2010 as online and mobile digital music services see rapid growth outside the country.

Successful format developments like the iPod/iTunes combination have been driven mainly by consumer demand. The majority of consumers are in favor of doing away with DRM. The benefits of doing so outweigh the risks to major labels.

Ben Macklin of eMarketer said,” Content providers should not force law-abiding citizens to steal," said Mr. Macklin. "If the rightful owner does not allow consumers to get the content they want, when they want it and how they want it, they will get it elsewhere.”

He added, “"Content providers can either get a piece of the action or put such tight restrictions on their content, through DRM and restrictive terms-of-service agreements, that consumers will simply avoid them."

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