Major Record Labels Adopt ACS

The online community is buzzing today over the announcement that Universal Music plans to "give away" music online through a new service called SpiralFrog (which is also negotiating with other major labels including EMI).  The approach is not particularly innovative – the service will be ad-supported, something people like Terry McBride from Nettwerk has been advocating for months and other sectors (television, radio, online gaming, newspapers) have been offering for some time.  Moreover, the service is likely to face some challenges – by relying on DRM that is not compatible with the iPod, it is leaving out a large part of the market. 

That said, there are at least two bigger points worth making.

First, despite repeated denials from the industry that it would ever be willing to entertain alternative compensation systems for music, that is precisely what they are doing here.  While this is ad-supported rather than levy-supported, the end-result is the same – consumers get music that feels "free" yet is paid for through mechanisms that do not involve traditional sales or fee-based downloads (how artists are paid through the ad-model remains to be seen).  By supporting the notion that music can be made available to consumers for "free", the industry will help drive down pricing on music and eventually seek a compensation system for P2P.

Second, note that Universal plans to make this service available in both the United States and Canada.  This further affirms the view that anti-circumvention legislation is a non-factor when it comes to encouraging online innovation (though it can serve as a barrier).  Businesses will respond to the market and government should stay out by not incentivizing the use of DRM.  The industry may repeatedly claim that it needs DRM protection to enter the marketplace, yet its actions regularly prove otherwise.


  1. Michael, one small update – The Universal service does use Microsoft DRM protection, which has already been cracked, freeing the music for use on iPods.

  2. Closer to reality
    This is closer to a better solution yet it still employs DRM. Too bad.

    Until a service comes along that supports the concept eMusic (non-DRM, indie, obscure) and AllForMP3 (also non-DRM, with wide choice of format and bit rate, major labels, REASONABLE PER SONG PRICE) then we’ll still be without a genuinely GOOD online music service.

    F*ck the DRM – PERIOD. Do NOTTTTTTTT support ANYTHING that’s DRM!!!

  3. Liz Waldner says:

    Marketing & Communications
    My favorite website for watching/listening to music is Youtube. I think it actually stops people from ‘downloading’ music online, as you watch and listen to the song anytime you want and then you realize you like acertain song so much you actually go purchase the CD. OR in some cases..decide that person actually can’t sing worth beans. hehe..

    My thoughts,
    Liz Waldner
    Prince George, British Columbia, Canada

  4. Matthew Rimmer says:

    ANU College of Law
    It was worth adding that the proposal for Universal to allow for free downloads on Spiral Frog was made the same month that the record company obtained a settlement from the peer to peer network, Kazaa.

    Could it be that Universal has become tired and weary of being locked in a never-ending battle with successive generations of peer to peer networks?

    Could it be that Universal, too, is envious of the success of Apple with iTunes and iPod?

  5. Liz
    Along the same lines? regarding online video production, I just got this from [ link ]

    A well-written article about copyright that is being lost by some artists submitting their work to MTV Flux…
    [ link ]