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Enders Analysis on music industry: DRM, piracy red herrings
April 12, 2007 | 12:45 pm
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By Chris Meadows
Eric Bangeman on Ars Technica looks at a study by British media research company Enders Analysis which examines the music industry’s recent sales slump.
Is piracy to blame? Is DRM the solution? Enders Analysis says no, instead laying the blame for the industry’s sliding sales at the feet of the record labels. “As we analyze the industry’s core challenges…, we consistently find that the industry has lost the ability to influence and control its future,” reads the report’s executive summary. “Worse, the industry has often appeared caught short, and its reactions accordingly wrong-footed.”
This seems to confirm what many Internet pundits have been saying for years: “piracy” is not the problem so much as the music industry’s prolonged inability to read the market. They tried to beat users with the stick of restrictive subscription plans when they should instead have been using a carrot of features customers actually wanted to lure them away from peer-to-peer.
The study also points out problems with the iTunes Music Store’s customer lock-in and single price point hurting the potential “long tail” salability of older music; the article also mentions Universal’s recent decision to enter a licensing deal with YouTube as one way that music industry businesses are now looking into alternate revenue streams.
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Comments:
[...] This is what happens when you allow people the ability to choose either a £15 album, or the four main tracks at £4. People are no longer buying the filling. Go on all you like about piracy, drm, evil Russian websites that have a proven digital music model, the root cause is simple. The buying public are smart. When we have the option to buy just what we want, we do. [...]
Certainly I agree that the music industry is a mess–partly of their own making. I’d be careful about the pricing thing, though. Part of Apple’s marketing strategy is that everything is easy and that there aren’t unexpected prices. Sure old songs might be sold more cheaply to take advantage of the long tail, but maybe they could be sold at higher prices reflecting the fact that if someone has gone to the trouble to look them up, they’ll pay more. And unfortunately, until someone comes up with a micropayment system that works, you simply can’t make money selling things for less than a buck (believe me, this is something I’ve learned the hard way over at BooksForABuck.com).
DRM is not the answer, but going DRM-free isn’t the solution, either. It’s just one small step.
Rob Preece
Publisher, http://www.BooksForABuck.com
What is the question/problem again?
Assuming you’re serious, the question/problem is allowing artists, authors, editors, publishers, and producers to make money and get a return on an investment that is easy for people to appropriate without payment.
DRM’s intent, as I understand it, is to manage use of digital rights. Unfortunately, applications of DRM have, to date, resulted in the inability to use legally acquired intellectual property, support costs for retailers, and ‘orphaned’ files when the original vendors go out of business, when customers change PCs, or when they wish to transfer their file to a new operating system or reader device.
Simply saying ‘no DRM’ doesn’t eliminate the problem DRM was created to solve–but, as I said, I don’t think DRM solves it, either.
Rob Preece
Publisher, http://www.BooksForABuck.com
[...] Table taken from http://www.teleread.com/2007/04/12/ender-analysis-on-music-industry-drm-piracy-red-herrings/ [...]