Tag Archive for 'Steve Jobs'

iTunes, DRM and Artist Royalties

published
on October 3, 2008
by
ACtual
in future of music, music, music business, music law, and politics
. 0 Comments Tags: , , , , , , , , .

Earlier this week, alarm bells were ringing when a quote from Apple in 2007 found its way back to the top of the news heap. That quote? That if royalties were to change to a point of being unprofitable to Apple, it would shut its iTunes store down. Now even the thought of this, among Apple and its competitors, has been brewing frightening thoughts for the consumers for a while due to the fact that virtually all the music these stores sell is DRM protected. Of course, the DRM is built into the song, so what exactly happens if the company selling the songs ends their existence? Well, it looks like the DRM for the material would expire, leaving consumers with hundreds if not thousands of “purchased” songs that will no longer play anywhere. As a music lover (and legal buyer of mp3s), this kind of news, even if it is an undeveloped thought, causes a good deal of frustration. Here the studios want consumers to pay for music, foregoing the option of downloading all the music they want illegally for free, but the copyright protection within the music means that if the retailer goes down, the files go down with it? That’s like buying a CD at Tower which is then erased when Tower goes out of business (you all do still remember Tower, don’t you?)

So what can we do about it when the very mechanism that has allowed music labels to go digital, and therefore the infrastructure that controls all of our legal downloads, is compromised by companies willing to close their DRMs? Unfortunately, not much. Short of burning all of your DRM tracks to a CD and then re-ripping them to mp3s to strip of them of their DRM (and some sound quality in the process), if a store goes down and discontinues its DRM licensing, all the tracks you’ve bought could die on your iPod. This to me seems like the ultimate Trojan horse of the music industry…we don’t want you to have mp3s, but if you do, we’ll create a way so that once they’re in your music library, should the stores you bought them from close, we’ll demolish your entire music collection from the inside.

I understand the purpose of DRM, but unfortunately its just not a viable business model if there are ways to stop the music playback at any point after the purchase. The point of buying music is that you have it forever. All the CDs I bought are still mine and will be mine for as long as I manage not to lose or damage them. The idea that you could buy a song which at some point in the future becomes unusable is, to me at least, outrageous.

The reason that all of this has come about this week is because the Copyright Royalty Board (CRB) was weighing a decision to raise the artist royalties on digital downloads from 9.1 cents per song to 15 cents a song. From what I can ascertain from the article announcing the steady royalty fees, a .99 cent iTunes song is sold like this…

1) Apple sells the song for .99. 2) Apple keeps .29. 3) Apple gives .70 to the record label. 4) Record label gives the artist 9.1 cents, keeping 60.9 cents. I don’t know about you, but even at 9 cents a song, it seems like the labels and iTunes are getting over on the artist. Are we really supposed to believe that the iTunes store deserves to keep almost three times as much money for a song it sells than the artist receives?

What this scare does do is make it painfully obvious that the record labels and online music stores need to create a way and find a method to allow consumers to legally retain their music, no matter what happens to the store you buy it from. Should royalty rights eventually be raised in favor of the artist, it would be a travesty for Apple to claim it can no longer operate iTunes profitably (with the number of sales they have per year and the fact that they’re getting money just to be a middle man, it would be very hard for me to accept the idea that they aren’t profitable), disable the DRMs and leave music consumers with a bunch of dead and unusable files. Apple needs to show a little more foresight and decency when it comes to wolf cries of lost profits with a change from 9.1 to 15 cents of royalty. This could have been Apple simply playing politics in order to protect its profit margin, but even then the greed factor, given what the artists out there are making, comes into play.

For now (the CRB’s decision lasts 5 years), it appears we can rest easy. But it makes it clear that more thorough examinations of the digital music sales industry, DRM technology and what the rules and technology mean to consumers are necessary and should not be ignored.

Ringtones: When DRM Goes Too Far

published
on January 21, 2008
by
ACtual
in music and technology
. 2 Comments Tags: , , , , , , , , .

Digital Rights Management and the relating issues have been big topics recently in both music news and the world of MixMatchers. As a large portion of our group is involved with creating music, the questions as to who owns it and how it can be controlled are always at the top of the conversational trash heap. It’s a sticky situation which I touched on a bit in my previous post “Record Execs: Stupid or Just Plain Greedy?“, and constantly up for debate. It’s also the subject of quite a bit of mud throwing in the higher levels of the music industry as executives try to pass the buck as to who wants DRM, how they want it and where it came from. Furthermore, some of the bigger companies are starting to roll back their DRM in an effort to make more content cross-compatible with multiple hardware solutions (Apple DRM will only play on iTunes and iPod). Steve Jobs has expressed his opinion, and despite having helped create one of the most profitable and highly controlled DRM markets with iTunes and FairPlay, he advocates an end to DRM for music. I find the amusing point here that Jobs probably said one thing about DRM when he was trying to get label executives to let him sell music on iTunes, but has a much more pro-consumer point of view in his open letter.

Unlike a large majority of my peers, I don’t have a problem paying for my music. In my mind, the .99 cents we pay per track now is a much better deal than the 16-18 we used to pay for CDs. Think about it…on an 18 dollar CD, there might be 12 tracks. Of those, you might only like two. But you don’t know that until you buy the entire thing. Now, you just buy those two tracks, $1.98, and you’re on your way. Furthermore, when you really think about it…if you pay 1 dollar for a song and listen to it 4 times (which you know you’ll do if you’re buying it), that’s .25 cents per listen, right around juke box prices (for those that remember those). Keep listening and the math’ll eventually drop you to fractions of a penny per listen. Not a bad deal in my mind. I’ve noticed that the price and ability to preview tracks before buying them has made me a much more intelligent buyer, and I almost never look through my library and think, “I shouldn’t have bought that.” I can’t say the same for some of the CDs in my collection.

Still, so many of this Generation Y grew up with the full force of Napster, LimeWire and others running the show, and still can’t get used to the idea that maybe musicians deserve to have their music bought. While I won’t name any names here, one of the worst culprits of this idea of stolen music is not only a great friend of mine, but also a musician and aspiring attorney. You would think that if ever there was to be someone who would respect the legal rights and compensation of musicians it would be a fellow musician with a legal background, but not the case. Regardless of how much I pay for my music, he has no problem taking it from me for free, and in the end, I believe he feels an inward sense of smug satisfaction that he’s getting away with something, all the while failing to see where that would leave him if his musical career ever got off the ground.

Where the DRM conversation get really interesting is when you match it with the topic of ringtones. Now that phones are mp3 players too, and Apple’s iPhone is running the game in terms of what a hybrid hardware solution has the potential to be, the ringtones of beeps and blips from our Nokia phones has been replaced with full 2-30 second clips of songs. Just when everyone thought the copyrights were locked up for music, you have to now examine them in the context of clips for ringers. According to Gavroche, the reason for this is that the end user agreements for a song and for a ringtone are different. Then the question becomes why. In my mind, once you’ve paid for something, you should be able to use that personally however you see fit. I’m not advocating the free sharing and swapping of music and ringtones among friends, but if I want to burn the song I bought to a CD, listen to it on an mp3 player or program it as a ringtone, I should be able to without additional cost. iTunes, however, requires you to pay an additional .99 cents to turn one of your songs into a ringtone, and they don’t offer a simple solution, within the application, for turning a non-iTunes store purchase into a ringtone.

Now without getting into specifics that could be at odds with the legal standpoints of the companies I’m talking about, I will tell you that there are solutions to this problem out there. GarageBand offers one of them, and a bit of simple maneuvering of songs within iTunes will help you create a free, custom ringtone from any song in your library. It’s really quite easy once you’ve learned the process and done it a few times, but it still requires multiple steps in order to “trick” iTunes into thinking the clip you’ve made is a ringtone. The problem here is that having already established one payment and method for protecting music, the industry wants to change what and how much you pay to use music you already own in a different way from what they intended when you purchased it. It smacks of revisionism…already late to the party in terms of recognizing the moving trends towards digital music, the industry again finds itself behind the game. “What? You mean people might want to use the .99 cent track as a ringtone and not just a song to listen to? Better find a way to make some money off that.”

As someone who supports the idea of paying artists for their work in a way that is fair and equitable both to them as the producer and me as the consumer, I don’t have a problem with DRM. I don’t think it really solves anything (there’s always multiple ways to “unlock” a track), but if it helps the industry feel better about digitally distributing their product, in the end it benefits me as a listener. But rights are rights, and once a song is purchased, be it an mp3 or a hard copy CD, the purchaser needs to be able to take that song to any device or medium they want, even if that requires copying it for multiple locations. It’s one thing to limit the ease with which people illegally share music with one another. It’s another thing to try to step in and dictate how and when the consumer enjoys their purchase. That’s why my ringer is The Fall by Blake Leyh. So stick it to those DRM people, People, and make your whole library into unpaid for ringtones! Go crazy! That is, of course, if you already own it.