Does DRM Enable Online Music Innovation? 129
chia_monkey writes "An article at the Tech Law Forum asks the question 'Does DRM Enable Online Music Innovation?'. The piece looks 'at the range of legitimate online music distributors to see just how much the presence or lack of DRM affected business models.' It's a rather interesting read as the author breaks down seven online music stores (iTunes, Napster, Yahoo! Music, Zune, eMusic, Amie Street, and Magnatune...four of which use DRM and three that don't). The article mainly focuses on the ownership and 'renting' of the music (which can be seen with the 'buy the condo downtown' and 'rent a mansion in the slums' analogies) and how it applies to innovation and perceived business models. The numbers don't lie ... price-per-download is the clean winner while DRM-based models also take the lead. Will the market shift toward subscription based models in the future? Or, will DRM go the way of the dodo bird (as Steve Jobs has already proclaimed his preference for)?"
Next on /. (Score:1, Funny)
Yes (Score:3, Interesting)
* I work for Slim/Logitech
No (Score:4, Interesting)
It needs to compare the artists marketed in each model and ask what it means.
I think that 10% for eMusic is remarkable, considering these are primarily either artists have not yet achieved major commercial success; or achieved it some time ago.
For my money and they get it. eMusic is doing a fine job of widening the range of available artists, and in the new business model, the costs of doing so are marginal and the potential profits high.
My only complaint and the reason I will one day move away from them is there continued overcharging of non-US based customers. Electrons and bits don't cost more on the other side of the pond!
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No, but converting from your currency to our currency isn't free (it's a service provided by banks generally, and at a price). Passing costs on to the customer is normal business practice.
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That said, it's not just 2% charge, it's the infrastructure to support the multiple currencies (now, I don't know, nor do I understand everything that would be required for that, is it as simple as getting payments into your account in Euros/Pounds/Lira/Peso's and having your bank run a batch conversion? Or is the bank taking a transacti
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When I set up an e-commerce site that traded in multiple currencies, the way it worked was we sent the currency we wanted payment in along with the reques
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Well, yes, but they get to reclaim the VAT on the costs of the transaction. So you're probably only effectively paying VAT on 20% or so of the total cost of your tracks.
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For my money and they get it. eMusic is doing a fine job of widening the range of available artists, and in the new business model, the costs of doing so are marginal and the potential profits high.
eMusic is very good. I have an account with them and get all kinds of good music every month. However, I do have one issue with their pricing model: It's based around songs. I don't buy songs, I buy albums. Often I end up having to wait until the next month to download the rest of an album. It would rock if they would offer something like "5 albums a month" as an option instead of "50 songs a month".
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Re:Yes (Score:5, Insightful)
DRM exists for the benefit of the distributors and not the artists as they so readily claim. Why do the various distribution schemes out there have to have DRM in order to be viable? For some reason allofmp3.com worked just fucking fine for everyone (streaming and/or downloading) without the DRM. For me, it worked even better because I could get them in various bitrates and/or FLAC/WAV if I saw fit (and I did at times).
We need to REJECT at every turn the conglomerates' suggestions that we should bow to their demands. They are businessmen and they will respond favorably when the populace stops giving the fuckers money. It's people like you (and nearly everyone else) that makes DRM laden music viable.
Me? I'll stick to what is best... Music that is freely distributable by bands that don't make their money by sitting in a studio for one album but instead are out there working their asses off touring. I'm planning on going to see 5 shows in the next few weeks (it's what I can afford right now) and they are all bands that I would support.
That's what everyone should be doing to "give the artists the money they deserve", not paying the RIAA thieves so that the artists can gain a few pennies after a lower quality DRMd download.
DRM not neccisarly just RIAA big label. (Score:3, Informative)
Thats why many of them put their music on itunes and tell them to download the songs from it. No easy piracy, increased hassle free distribution.
I have yet to buy
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The biggest complain I hear from my friends touring to death is the amount of piracy that goes on. Fans will come up to them bragging about how they copied their cd from a friends.
So the fans you mentioned copied it from a friend. Loss to the artist of about $3, max. Your friends can't see the forest for all those darn trees, though; would that fan be at the show if he didn't hear the music? It's a given that the money's in touring, NOT record sales.
In short, your pals are griping about new fans coming to their shows, making them MORE money than what a CD purchase would make. I've worked road crew locally in the past and never heard any gripes fr
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"Fans will come up to them bragging about how they copied their cd from a friends."
And their friend can burn them a copy of their iTunes downloaded song just as easy. Pirated stuff goes up on P2P networks within minutes of its iTunes release.
Putting their stuff on iTunes because their fans can find and buy it there with no hassle: smart idea. Putting it there to in any way inhibit piracy: delusional.
Digitally recorded music is made of bits. B
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You haven't addressed the point at all. Of course DRM sucks for _purchased_ music. We all understand that, because we've been purchasing music without DRM (i.e. CDs) for years. We know it works, and we know that in this case, the DRM only penalizes the people who are PAYING for the music. We know that for T
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You are correct, they didn't have an "unlimited" flat rate access but they offered streaming music for free. I would happily listen to the streaming feed of an album prior to purchasing it and we're not talking 30 second clips of each song that I have to manually click to get it to play.
I just don't under
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That must be a real kick in the ass... (Score:2, Interesting)
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For some reason allofmp3.com worked just fucking fine for everyone (streaming and/or downloading) without the DRM.
You must have a weird definition of "everyone". allofmp3 works fine for the consumers; it works fine for the owners. It does not work fine for... oh, I don't know, the artists. You see, they don't get any of the money. At all. (And let's not start with "well, allofmp3 pays licensing" -- because they pay licensing to an organization that doesn't hold any licenses to most of the music they're distributing.)
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Bullshit. DRM sucks, but many/most people _don't_ go and see many live bands, so this crap about supporting bands that "work.. their asses off touring" is just that - crap.
Also, by saying that, you're saying that the only music that has the right to survive is that of touring bands. Again, I call bullshit. Some of the most innovative and interesting music has been made by bands that _haven't_ been actively touring. Remember - the whole point of recordable music is that you don't _have_ to see the band live.
Yes for rent, no for purchase (Score:3, Insightful)
But like the vast majority of people, I am not interested in these business models. I still like to buy things, build a collection,
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Same thing here with art. Except it's us primitive native pre-DRM guys who are having difficulty comprehending.
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It also bothers me that no one really has "all" the music because some goddamn content owners refuse to ever license their stuff for distribution.
In the end, I think that pay subscription services will end up dominating the market,
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I have mod points, but I don't feel like using them. I hate the idea of music on
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I'm wary of online music because, after years and years of buying records and then CDs, I have a whole huge collection; converted to digital formats that I can use with just about any music player. Certainly the model of buying a whole CD when you don't want a whole CD is lacking, but I think it's not nearly as bad as paying and paying
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* I keep citing them because I know a lot of the background. I imagine there're others.
Exactly. (Score:5, Interesting)
On the otherhand, broadcast and rental are very nice business models for some types of media. As far as music goes, I prefer buying, but I almost never buy movies or anime - the replay value just isn't high enough for me to justify paying 5x the rental price and have more junk cluttering up my apartment. Without some sort of DRM, rental is impossible in the digital relm, and I really don't care if my devices make it difficult to copy something that I rented because I never had the right to do so to begin with. As long as the implementation is convienient I don't have any fundamental problems with DRM on rentals, and other services.
DRM is a complete failure when it comes to preventing piracy, and always will be for basic fundamental reasons. However, when it comes to rental/broadcast the purpose of DRM isn't to prevent piracy but theft of service. For that purposes DRM actually works fairly well. Because you control the stream, it is easy to change keys whenever one is cracked, as opposed to static media and players which cannot be changed after they are sold. This is why AACS was effectively broken within weeks, while the DRM for digital satallite is still secure after years. This is a situation where "Open" DRM (licened under RAND terms) can be valid and useful, much along the lines of the CableCard standard.
That said I would hate to see the situation where media is locked up and only provided as a service, and never made available for purchase. But as long as we don't get to that extreme have think both non-DRM sales and DRM'd services can coexist peacefully.
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It's generally very difficult to defend any overly broad generalisation. On the other hand, I think I'd find it quite easy to defend the notion that DRM is almost universally bad.
It reminds me, (if I may be permitted a short digression), of Robert Lory's Dracula books [blogspot.com]. In these, an obsessive paraplegic criminologist uncovers the Count's resting place and (as one does) implants a tiny remote control stake in the Vamp
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"It's generally very difficult to defend any overly broad generalisation. On the other hand, I think I'd find it quite easy to defend the notion that DRM is almost universally bad."
Another example: I use a form of DRM (password protection) on the *nix box that holds my web site. I do this because my web site is my revenue stream, and I would like to prevent people from either copying my code (yeah, I subscribe to that ancient "closed source" model) or sabotaging my web site.
I grant that I'm probably t
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"what you described is not DRM. simple password-based authentication cannot be construed as DRM without the term losing all meaning."
I manage the rights to my *nix box digitally, through the use of a password. It's DRM. So is the use of passwords on your personal PC, as well as security software that scrambles your data, as well as your PIN codes. It's your digital data, and you're protecting your rights to your data. You don't want it copied or misused any more than that guy at the record company wants
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your example of personal encryption software could be massaged into DRM if you somehow wanted to distribute your encrypted data
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Let's apply your criteria to downloading Red Hat ISOs and binary updates, shall we:
Access to Red Hat's ISO and binary downloads is controlled through a password. Thus Red Hat Linux must be a DRM-laden OS.
No, the point of DRM is that it allows control of access to the work after the end user already has it in his/her possession -- after (s)he has already downloaded it.
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A bit of a non-sequiteur that, don't you think? Never mind, let's pretend it wasn't.
The difference in your case is that you own the hardware, and you also control the encryption process. In general, the use if encryption is not in itself sufficient to qualify as DRM; it is also required that the encryption keys are controlled by another party.
This is a problem because the DRM controller can impose more
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If that monthly subscription fee was paid to musicians working on commission to create new music, then you could have an even better service without DRM. The artists get paid and the public gets their entire catalog without restriction. Of course the middlemen who currently
Missing a critical element of the business model (Score:5, Insightful)
The companies that want DRM on their music are the ones that they spend a lot of money making popular. Their business model is to get a lot of people aware of certain songs, and then sell the song to each of them individually. That's the RIAA's model.
The independent labels don't have a huge marketing budget, and so they care a lot less about whether they get paid for each individual download. For them, passing songs between people really is free advertising.
So the success of any individual music store has more to do with how effective they are at getting you to find the music you want than with the DRM. iTMS sells a lot of the RIAA's music, which the labels spend megabucks marketing (an investment they want to protect). eMusic sells songs that aren't heavily marketed.
There are a few performers who straddle the line, who got famous on the RIAA's dime and then managed to extricate themselves. They get the best of both worlds: a huge audience without the need to make each individual download pay. But these are the exceptions, not the rule; don't forget how they got famous in the first place.
That's the key here: promotion. It's way more important to most people's music choices than nearly anything else.
hrm (Score:1, Interesting)
Steve Jobs is a liar (Score:5, Interesting)
Apple has absolutely no reason to get of DRM -- the iTunes DRM locks consumers into iPods.
I am an IP lawyer working on music licensing. The industry consensus is that Steve Jobs is a publicity hog and pro-mp3 his editorial was an attempt to take credit for upcoming rumored announcement from the major labels regarding selling in non-DRM format. Rumor has it that such shift will occur within a few months.
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If the major labels do decide to ditch DRM in the next few months, then we will all be able to see if Steve Jobs is lying by how quickly iTMS switches to DRM-free.
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Re:Steve Jobs is a liar (Score:5, Funny)
Holy crap. I guess I've just been entirely gullible to believe Steve Jobs. Not anymore, though! From now on, I'll only listen to the record industry's lawyers!
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Considering his editorial was posted in a timeframe that reflected pressure from the EU about licensing FairPlay, a bit of cynicism creeps into my view of what he has said. I am not sure of the numbers, but it is known that a portion of the music sold on iTMS is not a part of the RIAA and i
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In theory, one of the great things about iTunes Store is that it is consistent. If I buy a song from iTunes Store, I know what I can do with it. Most other stores have a dizzying array of what can and can't be done with a song purchase--you can/can't burn it to CD, transfer to music player, rent it, squirt it, etc.
Adding in the "Digital Rights Managed" field would be a step against this. Suddenly, when you download a song, you don't know what you c
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Jesus, that's putting the cart so far before the horse that the horse won't catch up before the heat death of the universe.
Nobody, but nobody, buys an iPod just so they can buy songs off of iTunes. That's laughable. The figure repeatedly comes up that the average iPod user only has less than a dozen songs from iTunes on the thing.
The iTunes DRM was there so that Jobs could dupe the music labels into jumping on board with the iPod, while all the time he realized th
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It doesn't mean that it forces people to buy an iPod in the first place. It means it imposes barriers to ever switching away from it.
It doesn't really matter whether the iPod or iTunes Music Store is more popular. Even if someone buys an iPod first and loads it up with MP3s before starting to use ITMS, once he is using both, he is forever locked into them. If, one day, he finds a superior portable music player made by someone else, he won't be able to switch t
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The reality for many people is more that they are locked into iTunes Store rather than being locked into the iPod. Content from other providers isn't available on the iPod. This is a problem for the record labels more than the consumers. For the
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How's that working out for you?
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Yes, Steve Jobs may be a publicity hog. Why shouldn't he be? Good for him as long as it's good for Apple. It's impossible for us to say how sincere Steve Jobs' editorial was, but I'm sure it has more to do with the European antitrust issue
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"Yes, Steve Jobs may be a publicity hog. Why shouldn't he be? Good for him as long as it's good for Apple. It's impossible for us to say how sincere Steve Jobs' editorial was, but I'm sure it has more to do with the European antitrust issues than anything else. (Hey, it's not my fault, go bug the record companies)."
A good test of his sincerity will be whether iTunes starts selling the Disney/Pixar films in a DRM-free format which one can easily burn to CD or move to a non-iPod player. Steve Jobs certain
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The independent labels are largely irrelevant. Most of what Apple sells is from a major label. The major labels require DRM.
If Jobs wanted to sell such mp3s, he could do so today.
Yes, but there's little point in sett
No allofmp3.com? (Score:4, Insightful)
The fact that they decided not to include allofmp3.com in the "study" should give you a hint regarding how objective this "study" is.
Personally, I think allofmp3.com is the best of them all.
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in fact, I just tried a*mp3.com and while visa was still 'disabled' mastercard still works. works fine.
3 cheers for the russians.
(can't believe I am saying this. 20 yrs ago, who would have thunk...)
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Or was it limited to legal means ?
Re:No allofmp3.com? (THANKS!) (Score:2, Informative)
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How Enlightening! (Score:1, Insightful)
In other news, gravity is still in effect, and time is still going forward.
In the mean time, the music distributors, with even less musical talent than Karl Rove, are still making millions, and all of my musician friends are still broke.
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This [tinyonline.co.uk] is not Guitar Hero.
Oxymoron (Score:5, Insightful)
I believe in limited copyrights to protect an artists ability to profit from his works. I don't believe those copyright should be transferable to corporations. I don't believe those copyrights should have anywhere near the duration that they currently enjoy, and I don't believe I'll pay a damn dime for drm encumbered crap that does nothing more than deprive me of rights that I should have by virtue of paying for the damn content...At least if I stole it, someone would have taken off the damn drm!
Innovate that.
Re:Oxymoron (Score:4, Insightful)
It's only since the creation of the CD that you could do any of those things. The old model has to go out the window; people like the stuff that they can do with the new format. But it's not clear where to go from there, since free copying tends to encourage exactly one pricing model: give it away. It may be the only model, given how ineffective DRM is compared to the old "press it into vinyl" model.
Watermark Me! (Score:3, Interesting)
Copyright law still protects the artists' work. I'd hate to see that go away given how well the GPL has worked.
So the problem in digital duplication is figuring out who violated Copyright law. There's an easy solution to that - watermarking. I wrote [bfccomputing.com] about this a few weeks ago - water
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How does watermarking allow effective copyright control? It's completely ineffective against people who are prepared to lie in court (e.g., "Oh, I'm sorry, I lost a CD with those files on it a while back, I thought it was in my house somewhere, but maybe I dropped it outside..." or "My local computer expert tells me I have something called a trojan horse on my computer, and that people could have been copying my fi
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It does no better than current Copyright Law, which is subject to the same attacks. "Oh, my, is that a licensed stock photo? A photographer gave it to me and said it was his original work, I didn't know." etc. Fortunately, the courts do not depend on the veracity of defendants to make their judgments.
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You could only play it on the *type* of device for which you bought it, but there was nothing that prevented you from playing it on your friends turntable, and if your turntable died you could just buy another one and all your music would still be playable. Furthermore, once you were tired of a
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It was the transition from Analog to Digital.
In this transition, the music industry has reaped enormous benefits and efficiencies - from the recording, to the production, to the manufacturing, and even in the transition of consumer audio equipment (going from analog turntables to digital CD players was a HUGE boon to the electronics industry, with regard to the level of audio quality per dollar spent).
The music industry wanted to get all the benefits of goin
Re: Analog - Digital Context (Score:2)
Not counting world class hobbyists, I don't know of *anyone* who could copy their own vinyl music onto other blank vinyl.
There was the first version of this outcry when standard tapes became the 10-year standard. If you were indeed willing to suffer some quality loss, you *could* form small sneaker-nets of 1st generation copies of tapes. Youth of the 1980's got to experiment with Mixing. After a little serious thought, the world realized that in this case the pr
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"Hi, I have an innovative new method for selling DRMed music in an online store, and I want to license your content." "OK."
Whether you believe Jobs or not, the ITMS only took off because it has RIAA content and it only has RIAA content because it has DRM.
Sure.. (Score:5, Funny)
tangible (Score:2)
Well (Score:2, Insightful)
Define 'Innovation' (Score:4, Interesting)
For some definitions of 'innovation' I would agree that DRM might be an enabler. I consider the the definition of 'innovation' as "1) something that allows you to do the same thing as before with less effort; 2) maintain what you were doing before with no increase in effort even though environmental conditions have changed; 3) do more than you're currently doing with no increase in effort."
Hrm, looking at that, DRM could be considered an innovation for the distribution industry because it enables them to keep some lock on their product/service in light of a changing market landscape.
So I guess I don't have a problem with the concept of DRM being innovation. I think the more important question is "innovation for the benefit of whom?"
What would turn this on its head (Score:3, Insightful)
For a couple of months before launch collect every freely distributed bit of music it is possible to collect. This would take some searching and downloading, but it would result in a significant collection.
Make it all available with an ad-supported service and use the ad revenue to buy up anything else available from folks like the Russian mob (allofmp3.com) and various other quasi-legal services. Grab their collection before they are shut down.
Extend this into P2P, collecting more and more and mixing it in so it would be impossible to tell for any given music clip where it came from. Allow anonymous user contributions and hide behind the DMCA like YouTube. Take something down and it would immediately pop up again from anonymous contributors.
Have a rating and keyword system for finding stuff. All free and just ad supported. Of course, since the original material was freely distributed or "contributed" the ads just support the service - no need for any revenue sharing except you could mail out prepaid Visa cards every so often to people that put in an address. Nothing large, say $20 or so just to keep the interest up. Still utterly anonymous.
And the RIAA would be powerless to stop it.
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Right now, the average person isn't making the correlation between one product from another (which is only made worse because they don't understand the scary, almost magical technology). To them it makes sense to buy songs from Apple to play on their App
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TFA is absolute correct. DRM does cause enable... (Score:1)
Napster. Gnutella. Gnutella-2. e-Donkey. BitTorrent. All innovative technologies.
Re:TFA is absolute correct. DRM does cause enable. (Score:2)
Re:TFA is absolute correct. DRM does cause enable. (Score:1)
Perhaps not DEVELOPED in response to DRM. (Score:1)
Innovative, yesno?
DRM and the dodo (Score:2)
Ignores ORIGINAL Napster (Score:2)
Everything else has been downhill since.
Dodo? Really? (Score:1)
The Business Models - Translated for UK readers (Score:2)
Buy the Small Condo (Napster) = marry slapper
Buy the Small Condo Downtown (Yahoo!) = marry chav
Buy the Even Smaller Condo Downtown (Yahoo!) = marry troll
Buy the Ranch On the Edge of Town (eMusic) = marry cutie
Buy the Ranch in the Country (Amie street) = marry heiress
Rent the Mansion in the Slums (Napster) = hooker
Rent the Mansion in A Different Slum (Zune) = rent boy
Aime Street (Score:2)
What happened to WeedShare? (Score:2)
http://www.weedshare.com/ [weedshare.com]
The hidden cost (Score:4, Interesting)
Record companies contracts are so agressive that signed musicians earn very little from even millions of sales via the conventional channels. The record companies have traditionally been able to get away with this because of their monopoly on the marketplace, however the internet has thankfully broken their monpopoly in that a few sales on the internet now earn musicans more money than a million sales through a record contract. Furthermore musicians also get to keep their rights to their own music which are usually also demanded by the record company.
Ironically as a short-sighted response to this the record companies are making cotracts even more restrictive and making their products less desireable by adding DRM. For some reason they think us consumers are too stupid to spot or be concerned about the DRM. Just like every other accounting-driven business, record companies have a large blind-spot with respect to lost sales thorugh bad treatment of customers as there's no way to calculate the exact figure so they ignore it. This also explains why most companies feel its ok to keep you waiting in phone queues for 20 minutes over the cost of one more minumum wage phone clerk.
Ultimately record companies will just have to accept that they've lost their monopoly on the marketplace and will be obliged to either start making products that people actually want, and treat musicians like equal partners, or fade away into obscurity. However until then, they are kicking and screaming like the fat cat spoilt brats they are. But rest assured the change is being forced on them wheter they like it or not, so they can't keep it up forever.
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Ironically as a short-sighted response to this the record companies are making cotracts even more restrictive and making their products less desireable by adding DRM. For some reason they think us consumers are too stupid to spot or be concerned about the DRM.
Newsflash: once you get out of slashdot-land, most consumers DON'T care about DRM. It's not that they're stupid, it's that it doesn't affect them, so they don't care. My wife gets her music from itunes. She can listen to it in her car, on her 'pod, and on her computer. While I've certainly made her aware of how evil DRM is, she doesn't actually care. And why should she? As far as she is concerned, there is no DRM that affects her: she is not prevented in any way from doing the things she wants to do.
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Dont post such fud on slashdot please (Score:2)
and it is well known that the fud spreaders of riaa use "innovation" excuse to push for shit they need to control the market.
so please dont post no shit, dont post no fud, dont post no shitty fud.
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Wrong model, period (Score:1)
Here about some real innovations that the internet would allow? These are off the top of my head:
1. Online radio stations. (Yes I know they are using other laws to shut these down, too.)
2. Music attracting fans to a bands website to show concert dates, where you could buy show tickets, airplane tickets, etc. (Some independen
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