Recently I was going through some old paperwork and I found the notes from a talk I gave in August 2001. Part of that talk were some thoughts I had on how to make online music a profitable business and eliminate piracy. This was in the time when Napster ruled the online world and before the Apple iPod existed. Before I tell you my solution, let’s look at what has happened in the past week.
On February 6, Steve Jobs released his manifesto entitled “Thoughts on Music“. In short he calls on the “big four” music companies (Universal, Sony BMG, Warner and EMI) to drop DRM (digital rights management) from the songs they sell online. Of course it is Apple’s iTunes that sells the most music online today and the DRM it imposes means that the music is severely restricted. It only works on iPods and can only be stored on a limited number of computers and/or devices.
The idea behind DRM is that it prevents people from stealing music. That is hardly the case. Anyone who wants to remove DRM can easily find ways to do this. What it truly does is keep honest people from getting the most from the music they’ve purchased. It also means that music you buy from iTunes is locked into iPods. Music bought from other online stores can also be limited to a certain range of devices. So if a user decides to buy a different brand of player, they may not be able to use the music they have legally purchased.
Since Jobs posted his manifesto, several of the music executives have responded. The Wall Street Journal is reporting that EMI has talked with various online retailers about possibly selling their entire digital music catalog in MP3 format with no copy protection. Given that EMI is home to the Beatles, the Rolling Stones, Coldplay and other major acts, this would be a huge move towards a world without DRM. Warner Music’s CEO Edgar Bronfman did just the opposite. In an earnings call on Thursday, he said “Let me be clear: we advocate the continued use of DRM.” Mitch Bainwol of the RIAA (Recording Industry Association of America) said “we don’t think that a wholesale abandonment of DRM is necessary” and followed with “I think you’ll see some experimentation, but that’s a lot different from a policy saying ‘forget it.'”
This brings me back to what I said five and a half years ago. I proposed that songs be sold for no more than fifty cents and that they be sold in MP3 format. Piracy exists because the current prices are too high and the restrictions are too cumbersome. Make the price low enough that people don’t think twice about buying a legitimate copy and they will do it. Allow users to play the music they’ve purchased on any of their devices without restriction. Allow users to make their own mix CDs of their favorite songs.
Of course I said that before everyone had a portable music player. I said that before everyone was burning their own CDs. And I still believe that what I said is exactly what they should do to boost sales of legitimate music and stomp out piracy.
I will add one more thing. Steve Jobs is the CEO of Pixar and Disney as well as Apple. So I’ll ask Steve Jobs to get the ball rolling by selling Disney and Pixar content without DRM. Music is only the beginning, we also need video without restrictions!