Digital Music Trends: DRM Declines, iPod Rises in 2007
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A look back at this year's trends that defined the digital music business.
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At the Consumer Electronics Show this year, it&#39;s clear that consumers are making choices that are driving industry changes, and nowhere is that more evident than in the digital music business.Music industry and technology executives convened for the Billboard Digital Music Live conference Wednesday to talk about what those in the business need to do to meet the needs of music fans who appear to be running the show.&quot;2008 has to be the year we get real or the business as we know it goes away,&quot; said Fred Goldring, an entertainment attorney with Goldring Hertz &amp; Lichtenstein. He said that consumers will access music regardless of whether artists, labels, publishers, and digital music distributors approve of the means or receive money from the exchange.Since Napster turned the music industry on its ear in 2000, the digital-music business has been rocked by dissent among artists, labels, publishers, and the breed of technology companies distributing and selling music online that emerged in Napster&#39;s wake. All of these parties want to derive revenue from their contribution to the business, but have been arguing for years about how everyone should get paid.As this drama unfolds behind the scenes, consumers continue to find ways to bypass DRM and emerging revenue models to download and share music, making it not just impossible for the music industry to make money from traditional means, but also difficult to make money at all. In the meantime, artists have embarked on their own revolution, using social-networking sites and other online means to get their music directly in the hands of fans and finding other ways to derive revenue from their work.An example of the latter is the controversial and much-publicized move by U.K. rock band Radiohead to sell its new album &quot;In Rainbows&quot; direct to consumers without going through its record label or Apple&#39;s iTunes Store. The album first went on sale in October on Radiohead&#39;s Web site, allowing users to choose their price for the record; a few weeks ago, Radiohead released the record to iTunes and other retail channels.Scenarios like this will continue to happen, both among major-label artists and independent or unsigned artists. Whether they work is not the point; it&#39;s what the industry will do to work within these models and support them rather than continue to resist that will decide how the industry will fare in the future, said Terry McBride, CEO of Nettwerk Music Group. Nettwerk is a Canadian privately owned record label and artist management company.&quot;The corporate side of it has to shift,&quot; he said. &quot;The corporate people have not allowed us to do what we know we have to do. This is about the consumer, about monetizing their behavior and giving them choice. For all of the people that believe in controlling the&#160;[intellectual property]&#160;and how [the music] gets to consumers, the game is over. It was over seven or eight years ago, and soon your business will be over.&quot;Goldring suggested the industry focus on business models built solely around the networks that allow users to download music and find ways for everyone involved to make money that way.&quot;We have to stop trying to keep our old business alive&#160;... and figure out how to monetize the pipes [music files] are going through,&quot; he said.Barney Wragg, head of digital, EMI Music Group, said that in a perfect world, scenarios like the ones McBride and Goldring propose would exist. However, the needs of different artists vary, and there are still concerns about the integrity of their work and how they will be compensated for it as new business models emerge.&quot;I have artists that don&#39;t want to be involved in certain business models,&quot; he said. &quot;I have to balance those conflicts. ... There are a whole bunch of artists who are worried about how they&#39;re going to get paid, and what this is going to do about their representation or their art.&quot;Allowing their music to be distributed through ad-supported online music services is a particularly hard sell for artists who worry that having their work be associated with advertising &quot;devalues&quot; it, Wragg added.Subscription-based models such as Rhapsody that don&#39;t give users ownership of their music have struggled to take off. Wragg compared music fans&#39; view of subscription models to the early days of e-mail, when people wanted files to be stored locally and were adverse to the concept of e-mail existing only on a remote server.That concept changed over time, as will the perception of subscriptions if they are marketed to consumers in the right way, he said.Another factor that should boost the popularity of subscriptions in the future is the increased spending of younger fans who are naturally more comfortable with the idea of not owning their music, said Matthew DeFilippis, vice president of new media and technology for the American Society of Composers, Authors and Publishers, a membership organization representing the rights of artists.&quot;Ownership is a generational thing,&quot; he said. &quot;Even though kids today are buying from iTunes, I don&#39;t think they care about owning a thing. As they become the new generation of homeowners and bill payers, [music subscription] will be moving toward a cable [TV] model.&quot;
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Executives from Nokia and Philips published an open letter today calling for the European Commission to consider scaling back, if not eliminating, imposing levies on digital recording media and playback devices, including DVRs and MP3 players. But the alternative may be a hard sell: increased DRM.
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After 2006 -- a year when virtually no  one managed to launch a digital music service in competition  with Apple's dominant iTunes -- 2007 was a refreshing change of  pace.
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2004 is turning out to be the year of the iPod. Last week retailers reported that they're running short on the popular digital music players. This week brings news of novel ways that people are putting their iPods to work.
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Sony's three-year effort to beat Apple Inc.'s iTunes Music Store is over. The company will shutter its Connect music store and adopt Windows Media DRM.
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&#147;Apple&#146;s latest addition to its hugely popular iPod line, the iPod Photo, has moved the bar even further as the digital lifestyle continues to converge,&#148; writes Mike Wendland for the Detroit Free Press. &#147;It combines the two most important things driving consumer electronics this year: digital music and digital pictures.&#148; [Nov 02]
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NEW YORK - Now that digital music players have evolved beyond the ability to store 20 gigabytes worth of music, storage capacity memory is no longer the only factor to consider before buying.
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The compact disc has at least another five years as the most popular music format before online downloads chip away at its dominance, a new study said on Tuesday.
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It is not a stretch to say that the iPod changed, and helped save, the music business. One in five Americans has owned one of Apple Computer Inc.'s sleek little iPods. Consumers have filled their iPods with more than 1 billion songs from Apple's Internet music store, where tunes go for 99 cents...
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Apple has done extremely well in the digital music market. They sell the largest number of portable digital music player in the form of iPod and they sell even more songs on their music store iTunes.
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NEW YORK - If you've tried to buy digital music online lately, you may have noticed your options have blossomed, seemingly overnight.
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If anything characterized the world of digital music in 2004, it was Appleâs iPod. Although a slew of music players and online music marts were unveiled by entities other than Apple, no
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LONDON - Six large technology and music companies announced Monday they have banded together in an attempt to bring some interoperability to the DRM (digital rights management) systems protecting digital content such as music and movies within the next nine months.
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Amazon MP3, which only sells music without digital rights management copy protection, now has licensing deals with all four major music labels. Watch out, iTunes.
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By Anonymous  Online music stores cheered at EMI's decision to sell their music free of digital rights management (DRM) software. The move will help stores cash in on digital music sales.
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As storage gets cheaper and download speeds faster, digital music files are moving closer to CD quality.