Columns

The Recording Industry’s Digital Strategy Out of Tune

My weekly Law Bytes column (Toronto Star version, homepage version) begins with the following:

Ten years ago, as the Internet began to mushroom in popularity and emerging technologies enabled consumers to make near-perfect copies of digital content, the recording industry emphasized a two-pronged strategy in response to the changing business environment.  First, it focused on copy-control technologies, often referred to as digital rights management (DRM), that many in the industry believed would allow it re-assert control over music copying.  Second, it lobbied the Canadian government for a private copying levy to compensate for the music copying that it could not control.

While the industry’s approach proved successful on the legal front – the 1996 World Intellectual Property Organization’s Internet Treaties established legal protections for DRM and Ottawa introduced a private copying levy on blank media such as cassettes and CDs in 1997 – the strategy’s effectiveness has long been subject to debate.  The week of February 5th  may ultimately be viewed as the beginning of the end of that debate.  That week, which began with Apple CEO Steve Jobs calling on the industry to drop DRM and concluded with the Canadian Private Copying Collective (CPCC), the collective that administers the private copying levy, applying for its dramatic expansion, leaves little doubt that the recording industry got it wrong.

The column proceeds to discuss the failure of DRM and the mounting pressure on the industry to drop it.  On the DRM issue, it concludes that "given the rising chorus against DRM, it is seemingly only a matter of time before the industry backs away from its locks-first strategy. EMI, the world's third largest music label, is rumoured to be ready to do so and should one of the majors move in that direction, it is likely that the others will soon follow suit."

The column then focuses on the CPCC private copying levy, echoing many of the comments I posted last week (part one, part two).  On that issue, I conclude that the latest CPCC filing may well herald the end of the private copying levy.  Unpopular with the public and targeted for elimination by the Conservative party, the levy has been overtaken by the prevailing view that consumers should be entitled to make copies of their store-bought music without further compensation.  While there may be a need for an alternative compensation system for peer-to-peer file sharing, the private copying levy is ill-suited for this role since it does not legalize the making available of content on peer-to-peer systems and the purchase of blank media bears little relation to P2P activity.  Indeed, there are better solutions out there – levies tied to network providers make more sense (and are already replicated by cable television levies for retransmission of content) and there is a need to cover both peer-to-peer and the non-commercial use of content in user-generated content.  Those approaches will require the recording industry to play a new tune – one that includes the abandonment of the 1990s strategy of DRM and the private copying levy.

5 Comments

  1. ***Sigh!***
    (…Sigh!) Could the music industry do anything more NOT to inspire consumer trust, and confidence?

  2. I don’t buy any DRMed products apart from DVDs and only because the DRM used on DVDs does not hinder my basic viewing of it and if I want to format shift a DVD then breaking through the DRM is easy as pie.

    As for MP3 downloads like iTunes, I’d NEVER buy music files with DRM – EVER. eMusic has the right idea but the majors refuse to jump on board. AllOfMP3 had THE BEST option – low cost and DRM free – but the majors would never agree to a westernized version.

    EMI has already dropped DRM on their CDs. I bought the non-DRM reissued version of the latest Beth Orton no that there’s no DRM. If EMI led the way and dropped DRM on their MP3 downloads, that’ll force the other majors to fall in line.

    Sony BMG has stopped using DRM/Rootkits on their CDs but they lost a great deal of goodwill from fans. Sony BMG should be shut down for their DRM/rootkit antics.

    DRM simply does not work. One look at newsgroups, torrent sites, etc will show that EVERYTHING is already online for free anyways.

    If the industry wants to remain relevant then quitting the DRM game is a big first step. Then make MP3s resonably priced – 99¢ is STILL too much to pay for a lossy MP3 file.

    Bev Oda is a puppet of the four non-Canadian major labels (EMI, Sony BMG, Warner and Universal). The REAL labels like Nettwerk and True North have already abandoned CRIA as CRIA only serves the multi-national majors. CRIA is like a parasite that exists only to see that it stays alive at any cost.

    In closing, let’s take a look at the cover art to an album by Conflict:
    [ link ]

  3. Micheal have you become the next music industry sellout “indeed, there are better solutions”. The music industry’s main goal for several years has been to add a Internet surcharge or levy. Ever since the Private Copying section of the Copyright Act went sour on them this has been their goal. It’s not just the music industries goal the motion picture industry is striving for this end. The entire media industry is waiting on & positioning themselves for a Internet surcharge levy. They already have television & radio & now want to add the Internet to their revenue stream. The prospect of a Internet surcharge or levy is far worst for the consumer than the CD levy ever was.

  4. Darryl Moore says:

    Network levys no better than blank media
    the6ofpopes is quite right. Michael, you offer assertions claiming network levies to be superior to blank media levies, without making any argument regarding how this can be. I repeat my argument from a previous post saying it is not.

    As with blank media, raw network bandwidth usage bares little relation to P2P activity. Between video blogs, remote backup sites, open source and shareware software, streaming radio, and many other high bandwidth uses besides P2P filesharing, it is very difficult to identify P2P activity based on solely on network usage. Additionally, to try to differentiate P2P from other uses will only cause a cat and mouse game as p2p networks attempt to disguise there presence, as they already do to avoid bandwidth throttling practiced by some ISPs.

    Please, if you are going to endorse such concepts, offer also some thoughts as to how it will be an improvement over the status-quo, because I don’t see it.

  5. I don’t buy any DRMed products apart from DVDs and only because the DRM used on DVDs does not hinder my basic viewing of it and if I want to format shift a DVD then breaking through the DRM is easy as pie.

    As for MP3 downloads like iTunes, I’d NEVER buy music files with DRM – EVER. eMusic has the right idea but the majors refuse to jump on board. AllOfMP3 had THE BEST option – low cost and DRM free – but the majors would never agree to a westernized version.

    EMI has already dropped DRM on their CDs. I bought the non-DRM reissued version of the latest Beth Orton no that there’s no DRM. If EMI led the way and dropped DRM on their MP3 downloads, that’ll force the other majors to fall in line.

    Sony BMG has stopped using DRM/Rootkits on their CDs but they lost a great deal of goodwill from fans. Sony BMG should be shut down for their DRM/rootkit antics.

    DRM simply does not work. One look at newsgroups, torrent sites, etc will show that EVERYTHING is already online for free anyways.

    If the industry wants to remain relevant then quitting the DRM game is a big first step. Then make MP3s resonably priced – 99¢ is STILL too much to pay for a lossy MP3 file.

    Bev Oda is a puppet of the four non-Canadian major labels (EMI, Sony BMG, Warner and Universal). The REAL labels like Nettwerk and True North have already abandoned CRIA as CRIA only serves the multi-national majors. CRIA is like a parasite that exists only to see that it stays alive at any cost.