Wal-Mart Ditches DRM... And Lots Of Major Label Music With It

from the so-long,-goodbye dept

Over the last few months, the meme has taken hold that the big record labels had finally come to terms with the fact that DRM didn't help and only frustrated users -- and was finally okay with getting rid of it entirely. That sounds good, but it appears that the labels are still having trouble letting go. Wal-Mart's online download store has finally abandoned selling any DRM'd tracks, but with it, it's lost almost all music from major labels like Sony/BMG and Warner Music. Considering that some really major acts appear on both labels, this seems like a rather huge limitation of the Wal-Mart online store which should be trying to present a rather strong front against iTunes. It's unclear who's at fault here. Wired blames Wal-Mart for launching the DRM-free store before it was really ready, but there's an equal chance that the fault is on the part of the record labels who still don't seem completely comfortable with finally killing off DRM.

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Major Record Labels Form Joint Venture With MySpace

from the to-do-what-exactly? dept

There's been some buzz about this all week, but now it's official that MySpace has teamed up with three of the four major record labels (the smallest, EMI, is still holding out, though it may join eventually) to create a joint venture offering called MySpace Music. The company is separate, but connected to MySpace. Unfortunately, the details are incredibly vague. So far, it seems to say that the new company will "let people listen to tunes and watch videos for free on the Web, as well as buy merchandise, concert tickets, and music through downloads." That's a pretty broad description, and while it sounds good upfront, execution is everything. And, historically, the major labels haven't executed particularly well when it comes to creating online music offerings. Already, it seems like they're hedging by saying that they're not committed to offering DRM-free music from this service. In fact, it often seems like these efforts are designed to fail. So, let's take this as a tentative step in the right direction, though with the expectation that the labels will likely do something to screw this up along the way. At the very least, it's the labels recognizing they need to change -- even if they still haven't come to terms with how to actually change.

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Sony BMG Caught Pirating Software

from the funny-how-that-works dept

Wouldn't you know it? The organizations who scream the loudest about how unauthorized copies are "theft" and how "piracy" is destroying their industries are just as likely to get caught making unauthorized copies themselves. In the past, for example, we've pointed out that the MPAA was using software in an unauthorized manner, and also that it had made unauthorized copies of a movie, against the demands of the movie's producer. Now, we find out (via Slashdot) that Sony BMG has been caught in a BSA raid with a ton of unauthorized software -- potentially up to 47% of the software at the offices. Now, I tend to think that BSA raids are highly questionable, but if it's true that Sony BMG is using unauthorized software, the company has some explaining to do. It's one of the major labels and has been a huge supporter of the RIAA's "anti-piracy" campaign. For a company so adamantly against piracy, it seems rather telling that it can't live up to its own standards. Considering the RIAA has been pushing for Congress to increase the statutory fines for copyright infringement, perhaps Sony would like to set a good example and pay at the high end of the range?

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Why Sony-BMG's Music Subscription Idea Won't Work

from the wrong-way-to-go-about-things dept

With the recording industry's latest infatuation with "subscription" music systems, you would think that maybe they would look at why none of the existing subscription services have done all that well. Of course, that would take a bit of foresight, which some of the industry's top execs proudly admit isn't something they're big on. However, following hot on the heels of stories of the industry bundling a subscription service with iPhones and iPods, Sony BMG has announced that it is working on its own damn subscription plan, with details that scream "failure in waiting." Similar to the Apple rumors, you would lose songs if you ended the subscription, though you might be able to keep 30 or 40 songs (again, same as the Apple rumor). That would mean some kind of DRM. Yet, the story also claims that it will work on iPods, which means either that it's DRM-free (which disagrees with the earlier statement) or that Apple is licensing its FairPlay DRM (something the company has refused to do to date).

But the bigger problem is simply the fact that this would fragment the market. No one wants to shop at one store for Sony BMG musicians, another one for Warner Bros musicians, another for EMI musicians, another one for Universal Music musicians and yet another for indie musicians. And, at the price point Sony BMG is talking about ($9 to $12/month) if you want subscriptions to all the fragmented stores, you end up pay $75 to $100/month for DRM-encrusted subscription plans. That's not going to work. Time to go back to the drawing board and not come up with ideas that were discarded five years ago.

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Universal Music's Plan To Take On iTunes: Bring Back PressPlay And MusicNow!

from the wait,-that-sounds-familiar... dept

Business Week has the story that Universal Music's Doug Morris is planning to take on iTunes by bringing together the major record labels and having them set up their own music subscription service, and then having ISPs and mobile operators force customers to opt in. First of all, it should be pointed out that this same story broke a month ago about Universal Music's plans for a subscription service by the site Digital Music News. It just that this is from a more established publication. When the initial report came out a month ago, we detailed why it wouldn't work, and there's no indication that anything's changed. Doug Morris has shown repeatedly that he doesn't understand the economics at play, and is simply looking to squeeze as much money as possible in the short term, without any kind of long term strategy.

However, what's most amusing about this is that it looks like it's going to merely be an update of the last time the record labels tried and failed to do something similar. The big labels all teamed up to create the services MusicNow and PressPlay, which became better known as MusicNot and PressPause. That's because they were created by companies who were too scared of cannibalizing their existing business. It took Apple to come along and show them how a music service could be done. While you can hope that they've learned something, Morris's repeated statements on the economics of music suggest he still hasn't figured it out. He might want to talk to his bosses at Vivendi, who seem to understand that selling music isn't the business model the company should be in. In the meantime, as was noted a month ago, there's still not the slightest shred of evidence that ISPs or mobile phone operators are willing to force all their customers to opt into a $5/month charge for music subscriptions.

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Sony-BMG Exec Tells Two Whoppers In File-Sharing Trial

from the say-what? dept

Wired's Threat Level blog has been doing some excellent work covering the first RIAA file-sharing case to go to trial, in my home state of Minnesota. In the latest post, reporter David Kravets quotes a couple of whoppers in the testimony of Sony BMG exec Jennifer Pariser. First, Pariser claims that "Selling music is the only way a record company makes money." That's just silly. While record sales are certainly a major source of revenue for record labels, there are lots of other revenue streams out there: concert tickets, merchandise, online subscriptions, endorsement deals, advertising revenue, and so forth. Just yesterday we had an excellent example of a band experimenting with offering name-your-own-price downloads coupled with a premium "discbox." And even some of Pariser's fellow record label execs have begun acknowledging that relying so heavily on music sales is a bad business strategy. At least I can see why Pariser might have thought it was a good legal strategy to pretend that record sales are the only conceivable revenue source for the music industry. Her other claim is even more puzzling: when asked if it's legal to make just one copy of a song you've legally purchased, she apparently said that was "a nice way of saying, 'steals just one copy.'" Not only is that flatly untrue as a matter of law, but saying it also seems like a lousy legal strategy, because (as Kravets points out) some of the jurors probably own MP3 players and won't like being accused of stealing. It's also worth mentioning that this is something the industry keeps flip-flopping on. Sometimes (like when they're arguing before the Supreme Court) they say that of course iPods are legal. Other times they call anyone who rips their CD collections for personal use thieves.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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The 'Ringle,' Or What Passes For Innovation In The Recording Industry

from the something-else-you-won't-want dept

It's no secret that the record labels face a chronic inability to innovate in their business models, choosing instead to continually repackage content and seek ways to force people to buy stuff they don't want in order to get the things they do want. It's this sort of thinking which has brought about the "ringle": a combination of a single and ringtone, and apparently Sony BMG and Universal Music's latest strategy masterstroke. Buyers would get a CD with the full-length track, a B-side or two, and a ringtone for $6-7 -- which doesn't really compare favorably to a 99-cent download and a few bucks for a ringtone (or a download and free homemade ringtone). Is there any real benefit for the consumer here? It's hard to see any, but that's not really surprising. It seems more like an attempt by the record labels to try and deter people from buying single-track downloads, since they don't like the low price and the way they've blown up the album sales model -- which itself is another variation of the "buy stuff you don't want to get the stuff you do" model. It's unlikely that many consumers will fall for it, especially since the CD single is pretty much a dead format. It's probably also worth pointing out that just like the labels try to recycle content, they recycle their innovative ideas as well, since it would appear that Universal tried pretty much the exact same thing in 2004, just calling it the Pocket CD instead of the ringle.

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Sony BMG Hits Rootkit Providers With Lawsuit

from the misapportioned-blame dept

Sony BMG settled both the class-action lawsuit against it and with the FTC, after it distributed rootkits that opened up security holes on consumers' PCs in the copy protection it used on its CDs. Now the company's filed a suit of its own against Amergence, formerly known as SunnComm, and its MediaMax unit, which supplied one of the pieces of copy-protection software in question. The lawsuit alleges Amergence/SunnComm supplied Sony BMG with faulty software -- which, all things considered, seems true. But the bigger issue here is that Sony BMG is implying that none of this mess is its fault, when it's the one that felt the need to implement the DRM in the first place. As we've pointed out plenty of times, DRM doesn't stop piracy, it just annoys legitimate customers. The SunnComm and XCP copy-protection that Sony BMG implemented on its CDs didn't stop piracy, and it wouldn't have, even if it hadn't been "faulty", as the suit alleges. It created a huge PR mess for the company, and it's cost them a fair bit of money to clean things up. Getting $12 million from Amergence won't change the fact that deciding to put the DRM on its CDs was a bonehead move that never would have delivered any real benefits.

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