After attending the Bandwidth Conference, my eyes opened wide to the many challenges the music industry faces from multiple dimensions. I am going to begin writing about my thoughts and observations and maybe elicit some honest debate.
Here's the start...
So it's LimeWire next... The RIAA has just sued LimeWire for copyright infringement much like lawsuits against Napster and Grokster.
LimeWire is proposing to do audio/digital fingerprinting (sometimes called a digital watermark) as their DRM methodology. I guess this technology is the lesser of all evils compared to platform limiting Apple or Microsoft DRM schemes. My opposition to this DRM method is based on practical experience having personally designed such a system in 1998. It is prone to abuse particularly in these times when governments around the world routinely use terrorism as justification to infringe on privacy and civil liberties. Think of Sony's rootkit debacle magnified a million fold. Digital watermarking/fingerprinting is a very bad idea that takes us closer to Orwell.
I have nothing against DRM per se except it reminds me of Linus' blanket. DRM does little to stop the bad guys who will continuously steal music and video without regard to intellectual property and copyright law. Last weekend in the Alameda flea market, there were several folks selling the latest CDs for pennies on the dollar. I doubt they observed intellectual property laws.
DRM does not make honest folks more honest. It just restricts the fair use rights of honest music fans.
DRM also has very negative effect on the music ecosystem. While you can argue there are many DRM schemes, the practical reality is there is only one: Apple's DRM which creates a monopolistic ecosystem wherein the prices are set by Apple. All the labels including Sony, EMI, Universal and Warner are held hostage by Apple.
There is no other way to describe the situation. The price lock that Apple wields has detrimental trickle down effects on other music retailers, distributors, labels and artists. The price is artificial and does not allow market forces to set the economic watermarks. I am not against any form of music but it seems clear to me that John Legend's latest album might fetch more than .99 cents versus some religious chant by right-wing wannabe rockers. There is no way to do this in the current monopolistic environment.
Even more economically devastating is the backward DRM'ed subscription model that other digital music retailers use. They claim it's great for consumers. What about the artists do work hard only to get 0.0003 cents per subscribed track? Session players, publishers and other music ecosystem participants all have to share the pittance.
I was once a corporate strategist so rants (...even my own) don't impress me. In a few weeks, I will publish a practical business roadmap to eliminate DRM in a "Capitalism Done Right" framework.