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EMI May Sell Entire Collection as DRM-less MP3s
Posted by
Zonk
on Fri Feb 09, 2007 09:23 AM
from the and-away-we-go dept.
from the and-away-we-go dept.
BobbyJo writes "According to the Chicago Sun-Times, EMI has been pitching the possibility of selling its entire music collection to the public in MP3 form ... without Digital Rights Management protections. According to the article, several other major music companies have considered this same route, but none as far as EMI. The reasons, of course, have nothing to do with taking a moral stand; EMI wants to compete with Apple. 'The London-based EMI is believed to have held talks with a wide range of online retailers that compete with Apple's iTunes. Those competing retailers include RealNetworks Inc., eMusic.com, MusicNet Inc. and Viacom Inc.'s MTV Networks. People familiar with the matter cautioned that EMI could still abandon the proposed strategy before implementing it. A decision about whether to keep pursuing the idea could come as soon as today.'"
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Your Rights Online: EMI — Ditching DRM is Going To Cost You 220 comments
33rpm writes "EMI has told online music stores that selling its catalog without DRM is going to cost them a lot of money. 'EMI is the only major record label to seriously consider abandoning the disaster that is DRM, but earlier reports that focused on the company's reformist attitude apparently missed the mark: EMI is willing to lose the DRM, but they demand a considerable advance payment to make it happen. EMI has backed out of talks for now because no one will pay what they're asking.'"
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Recent EMI News (Score:5, Interesting)
Recently, I learned that EMI will be allowing music videos to stream freely to UK, German & French users through AOL. [webpronews.com]
Also--possibly in relation to this--EMI's top legal counsel, Charles Ashcroft, has stepped down [thelawyer.com] after ten years with the company. There's been a lot of internal restructuring [cmj.com] so I wonder if these no-DRM propositions are on the way in or on the way out.
From the article linked above, I'm assuming that those profits are primarily music based so what amount would you have to offer the world's largest independent music company to be able to release their MP3s without any form copy protection? It's difficult to consider anyone being able to afford this.
Re:Recent EMI News (Score:4, Insightful)
Parent
Re:Recent EMI News (Score:5, Insightful)
Parent
Re:Recent EMI News (Score:5, Interesting)
Exactly. Personally, I'll happily pay to go to an official service, with high quality mp3 downloads, where I can quickly search by artist, song-title, album, etc. and find the exact track I'm looking for, know that what I'm getting is what is actually labeled, know what the quality of the file is, etc. As long as the files aren't DRM'd and the price is reasonable. Why waste time with p2p networks where you never know exactly what you're getting, download times are inconsistent, etc?
Hopefully if the labels go through with this, they follow the "long tail" approach and put plenty of obscure tracks up as well... demos, b-sides, live recordings, unreleased tracks, etc. Give music fans what they're looking for and they'll pay (well, some of us will anyway).
Parent
Re: (Score:3, Interesting)
Re:Recent EMI News (Score:4, Insightful)
-BA
Parent
Re:Recent EMI News (Score:5, Insightful)
"The translation of this concept from Russian to English, of course, is "Allofmp3""
Exactly. And since the EMI catalog would presumably include album art, it would make it that much easier for Allofmp3 to bolster their library.
The gotcha here is that customers want a "fair price," and many people have mentioned that since allofmp3 sells for less than $0.10 per track, that's a "fair price" and anything else must be henous profit-taking. The reality is that in the US, the minimum mechanical royalty payment by law is about $0.07 to the songwriter and lyricist (not to mention royalties for performers, bandwidth, credit card processing, and all the expenses that happen when people who draw salaries touch the product somewhere), so if your net cost per track is greater than $0.10, you can't break even no matter how many you sell. And as noted in the article, EMI netted eight points of profit last year, so they don't have a lot of room to play with.
People mentioned ease of use. The thing is, the people on the pro-piracy side have pretty good designers and coders, too. No matter how good Apple makes the iTunes interface, BitTorrent clients and sites like allofmp3 keep getting better, too.
What this means is that people will always find a moral reason to pirate. EMI releases their catalog in MP3 format in a variety of compression rates and with album art? Sorry, chaps, allofmp3 will give us the same thing, and they're $0.10 (lower than EMI will ever be able to sell at unless the law is changed), so EMI must be the greedy fucktards here. The iTMS is easy to use, you say? Sorry, bittorrent clients are just as easy and have just as much eye candy; thus iTMS et al. have clearly dropped the ball and we shouldn't give them our money.
I mentioned the law requiring minimum mechanical royalties. A few months back, the record companies actually were trying to change these royalties, and to say that it did not go over well with the Slashdot crowd is putting it mildly. If the law does get changed one day, then many people will certainly use the logic that if the record company isn't paying the artists, then they shouldn't have to. EMI is big and evil; allofmp3 is the our friend since they've been selling cheap, DRM-free music for a while now. Guess who will get the average Slashdotter's money?
Parent
Re: (Score:3, Informative)
The statutory rate can be overridden by a contract and is, in effect a maximum rate, not a minimum, see http://www.joelmabus.com/royalties.htm [joelmabus.com]
Other costs of selling downloads are much lower than CDs.
Lower costs could raise volumes.
The type of people who regard big media as evil, are exactly the people who would see a company that dropped DRM as good. The rest do
Re:Recent EMI News (Score:4, Informative)
RIAA uses an old but effective technique to keep their royalties coming: information hoarding. A fully-transparent accounting of costs per CD, traced back to what the artist gets and including taxes, etc, would neuter most of the arguments or at least put them on the same playing field for fair comparisons.
Once this is done, it becomes easy to look at artist output as the sum of recording studio time plus expenses, then promotion costs, and so forth down to distribution which, then, becomes very small as a line-item cost. Once the cost components are transparent, effective arbitrage pushes these costs down as well.
-BA
Parent
Re:Recent EMI News (Score:4, Interesting)
Interesting - my experience has been exactly the same.
I want to support the artists. I think most people do. I still buy CD's most of the time. But I will not buy anything encumbered with DRM (at least not DRM that I can't easily get around).
The more pissed off I have gotten with the RIAA, though, the more I've almost wanted to actively stick it to them. I've downloaded from Allofmp3.com, and I've downloaded through bittorrent. Not a lot, and I still try to justify it by saying it's stuff that I wouldn't otherwise buy at all. (For stuff I really care about, I still buy the CD.) But that's more of a rationalization than just downloading music I already own on another format, which is also how I started out. The RIAA has made me care a lot less about being on the right side of the law, because their idea of what the right side of the law is is both factually incorrect in many cases and also completely unreasonable. It's like telling somebody that not only can they not jaywalk (which is and should be illegal), but that they also can't cross the street from a corner with a "walk" signal. You're only allowed to cross the street in the presence of a uniformed RIAA representative, and if no such representative is around, tough. That is not an edict I'd follow, anymore than I'd follow their edicts about DRM'd music (especially their consideration of ripping CD's for my own personal use as "piracy"). Worse, the fact that they're trying to redefine the law on their own terms and enforce it themselves just makes me want to do exactly the opposite of what they're telling me to do. So now I'm going to jaywalk too, even when I wouldn't have before. I mean, if they're gonna make a criminal out of me anyway, I may as well go all the way.
They need to seriously start repairing their relationship with their customers. Ditching DRM is a good first step, and a necessary one. But it's going to take more than that to win me back as a full-time customer and to wean me off physical CD's. They need to completely re-evaluate everything from the top-down, starting with the artists they sign and promote, then the deals they sign with those artists (the artists need to be the ones taking the lead in promoting their music - I shouldn't even know what label somebody's on), then the way they distribute that music and the value they include with it. They need to be way more customer-friendly, which includes not insulting my intelligence with a bunch of American Idol wannabes all the time, not forcing DRM down my throat and not complaining that CD's are "too cheap". They need to realize that we're the ones keeping them in business with the products we buy, so if they want to make more money, they're going to need to provide us with more value for that money. Part of that means not crippling their songs with DRM.
Parent
Re: (Score:3, Insightful)
How do you figure? They've been making quite a profit selling CDs which are easily transferable to mp3, so why would also selling mp3s hurt that profit? If anything it'd help.
Re:Recent EMI News (Score:4, Insightful)
Parent
Re: (Score:2)
"the music "sharing" (pronounced "stealing") problem still needs to be solved or EMI will be very broke, very fast"
Protectionism at its best. EMI is going to go broke because what they do (find, promote, and distribute music) is done better and at lower cost by middle schoolers in their spare time.
Re:Recent EMI News (Score:5, Insightful)
Why?
DRM-less music has existed for longer than its DRM-encumbered counterpart. The web, Napster (v1), Kazaa, AllOfMP3 all made every album ever released fairly easy to get free or cheap, without any DRM.
And yet... The music industry still manages billions of dollars in sales per year.
How can that happen? It only takes one copy, right?
What the RIAA, MPAA, and apparently you need to understand, most people consider themselves basically honest. People want to "do the right thing", and they want to support their favorite artists.
People do not, however, like getting "burned" buying an album of crap with one overhyped single on it.
You basically have two kinds of music downloaders... The first group (which I consider the vast majority) downloads a few tracks to check them out, and if they enjoy the music, they'll buy the album. The music industry should court these people, not take them to court, because they count as customers (if they don't get too pissed off at the antipiracy measures put in their way). The second group will download anything and everything the can, and wouldn't dream of paying for music. You can fairly call them parasites, but their behavior (and how little they actually buy) wouldn't change in the least if the MP3 fairy came along and made it physically impossible to pirate music. So, as much as the industry may hate them, they have no effect on sales, whether given free reign to download, or whether DRM eventually proves effective in stopping them.
I would actually add to that one more pseudocategory, the "potential" customers... These people fall into the first group but currently can't afford to actually buy much music. Many college students fall into this category. Although they may superficially look like group #2 at their present station in life, in a decade they will start replacing their collection with legally obtained copies, to the great profit of the music industry.
So, does the industry need to address the "problem" of try-before-you-buy, or embrace it? Since we don't already all have a complete collection of every song ever made, despite the ready availability of them, I'd say "no". This problem exists only in the closets and under the beds of media company CEOs.
Parent
Re:Recent EMI News (Score:4, Insightful)
When DRM is abandoned, sales of digital music will go through the roof. It will promote greater competition across a more level playing field all throughout the music industry (i.e. Jobs is right).
Parent
Re:Recent EMI News (Score:5, Interesting)
Who the hell is talking about that? You're reading things into it that aren't there.
On a different note, if EMI is seriously considering selling unencumbered music, I would suggest they buy allofmp3's back-end software, or they develop something along similar lines along with a similar sales model, except of course more realistic pricing that hopefully actually compensates the artists. I personally consider up to around $5 an album for 128Kbps MP3 an acceptable price, any higher than than and downloads almost completely lose their attraction. Future pricing models simply HAVE to take into consideration the quality-per-buck aspect, otherwise it won't fly long term. Paying $10 an album for considerably lower quality than what you get on a CD from Target or Wal-Mart at the same price simply won't fly. Besides, offering a tiered pricing model also gives them the chance to zero in on the sweet spot of the market.
Parent
Re:Recent EMI News (Score:5, Insightful)
I would however pay £5 for a high- or very high- quality mp3 album.
Parent
Re: (Score:2)
We're not talking about pirating here, of course free will always beat non-free. We're talking about what a sensible pricing model would be so that a large percentage of people would buy instead of copy. And no, I don't consider 128K MP3 the bee's knee either, it was just an example. Somehing more palatable for $5 might be 160K WMA or equivalent. My point was to offer a tiered pricing model so users could make their own qu
Re: (Score:3, Insightful)
Re:Recent EMI News (Score:5, Interesting)
ant.
Parent
Re: (Score:2)
I'm assuming that those profits are primarily music based so what amount would you have to offer the world's largest independent music company to be able to release their MP3s without any form copy protection? It's difficult to consider anyone being able to afford this.
No one needs to offer EMI anything. Even in the summary, it says that EMI wants to drop DRM in order to compete with Apple's iTunes. Since iTMS sells everything in DRM form, they're hoping (rightly so) that people will get their music from someone that does not do DRM -- or more accurately, someone that will allow them to play their music on whatever player they choose, move it to their home stereo, etc.
Someone has to be first (Score:5, Insightful)
Re: (Score:2)
So.... what if one of the big 4 removes DRM, Apple is faced with the choice of either a) admitting they were lying all along and selling EMI stuff without DRM or b) Putting DRM straight back on.
Re: (Score:2)
Compression (Score:4, Interesting)
Re: (Score:3, Insightful)
Re:Compression (Score:4, Funny)
Parent
Re: (Score:3, Funny)
Re: (Score:2)
Re: (Score:2, Informative)
Re:Compression (Score:5, Funny)
Parent
I think they'll be pleasantly surprised (Score:2, Insightful)
and the price is fair, there are a lot of songs I've wanted to buy. I only liked one or two
songs from the album so I was never going to go buy the whole CD anyway.
Dear EMI, (Score:3, Insightful)
To paraphrase Johhny Dangerously... (Score:4, Funny)
Re: (Score:2)
So can EMI.
Re:To paraphrase Johhny Dangerously... (Score:5, Insightful)
Parent
Wait a minute, I'm confused (Score:3, Funny)
I'm confused, and I think my wallet's a little frightened. I might actually be able to spend money on new music. How strange.
So by AllofMp3.com (Score:3, Interesting)
I know the common perception is that they shoveled product at dirt cheap prices, but the prices were not that cheap (albums cost around $3) and they were easily able to get the sale price EVEN THOUGH THE P2P NETWORKS HAD THE PRODUCT FOR FREE
Plus they were working on download managers etc. and have the experience of running a major store.
EMI could sell their own product through their own store (allofmp3 mk2) and make their own money and even sell it to iPod users.
Competing with Apple??? (Score:5, Informative)
Not according to the New York Times http://www.nytimes.com/2007/02/09/business/media/
Don't be confused by the submitter's opinion. Moral reasons vs competition was mentioned nowhere in the linked Associated Press article...
In the manner of Steve Ballmer "FUD! FUD! FUD!"
Not really "competing" with Apple (Score:3, Insightful)
Apple will greatly benefit from the destruction of the iTunes "one price, everything DRM'ed" model for music. As Jobs pointed out in his essay, only a tiny fraction of music on iPods is bought from iTunes. If iPod is to continue to grow as fast as it is now, ripping CDs will become a bottleneck. A multi-supplier, competitively priced, flexible, compatible, user-friendly download business is needed for the media-player business to reach the next level of expansion.
What will prevent piracy? The same thing that made phone phreaking obsolete: Music, like long distance phone service, will become too cheap to steal. $0.10 to get a high quality digital recording vs. swapping sketchy rips with sketchy people - the choice is easy. The other side of the coin is that $0.10 is too little money to support the customer service required when people migrate a DRM'ed music collection from one computer to another or one player to another.
Re: (Score:2)
Plea to EMI (Score:2)
lame --vbr-new -h --preset standard
"Excuse me! Old man coming through!" (Score:5, Interesting)
How about you just *continue* to release albums in the best digital sound quality possible (i.e. on CD) and just make the price of those a lot more reasonable?
Then all of us out here in Consumerland can rip the CDs to whatever format is appropriate to us and not go into fits of hysterical laughter when a Beatles album that was recorded 40 years ago appears in a shop with a £15+ price tag.
If people want the option of picking tracks from albums in a lossy format, then let them have it - but if theire lives are so damned hectic that they cannot find the time to listen to an album from start to finish, then they are not the true, CD-buying music enthusiasts anyway.
And if people start whining about "only 2 or 3 good tracks on an album" then suggest that they do a little more research into music and go find some better music.
Give Steve Jobs some credit (Score:4, Insightful)
I hope EMI follows through on this. Without DRM, now we'll have real competition. Stores will differentiate on quality of music, artists available, and price. I think in the end, FLAC will become the format of choice so player compatibility won't be an issue at all.
And I still think Apple has something up its sleeve. Now that they've settled their feud with Apple Corp., they are free to enter the music business. At some point, they will have an agreement with a major artist to sell the artists music on iTunes without one of the Big 4 labels being involved. This could signal a major shift in artists way of thinking. Who needs a label if you can distribute your music through iTunes?
This will also start a new industry of marketing agencies whose primary business will be marketing recording artists. They will become the promoters instead of the record labels. In 10 years, the labels will either be transformed into promoters or be out of business.
MP3 eh? (Score:3, Interesting)
Re: (Score:2, Interesting)
I'd buy legit tracks [as opposed to just massively hording ripped cds] if I was assured they were encoded to sound reasonably well.
I'm sure 128kbit/sec AAC sounds good on an iPod, but a home stereo with a decent speakers requires a bit more fidelity than that.
Tom
Re: (Score:2)
A 7 min track with FLAC usually gets around 54MiB insize. At 256kbps it would be 13.5MiB. Multiply that difference by a billion and you can see why they don't sell FLACs.
I'm not saying they shouldn't have the option, just that it should cost more because it does take more resources to transmit.
Tom
Re: (Score:2)
Get your evil ISPs to mirror movie collections and download locally. The way I see it, if we have huge monopolies for telco/isp/etc they might as well be useful.
Tom
MP3 is the perfect first step (Score:2)
He did exactly that (Score:3, Informative)
He did exactly that: [apple.com]