10 August 2007

Universal Music shows its true colours

So Universal Music has decided to offer DRM-free music for download. Hooray! Except they won't be doing it through iTunes, but through all its main competitors. Universal's argument is that Apple's DRM has stifled growth of the online music market, and thus they will not be offering their DRM-free music through the the leading online distributor. As John Gruber said, WTF?

It's quite simple really. Universal are painting Apple as being the big bad guy who needs to be toppled. The iTunes Music Store is the leading distributor of legal online music—and it's achieved that position because it was the first service to convince the major music labels that there really was a way to distribute music online and legally. DRM was the catalyst which got the record companies on board, despite it being clear that what the public wants is DRM-free music. And now that the whole DRM model has become increasingly unsustainable, everybody is tripping over themselves pointing fingers at each other and saying that the whole DRM thing was someone else's idea.

Hence, Universal are now claiming that Apple is addicted to DRM music, because it locks people into the iPod. True, Apple's-DRM based music will only play on iPods. But iPods will also play pretty much everything else except WAV. In fact it's a blatant lie: given that Steve Job's recent 'Thoughts on Music' was backed up by offering DRM-free music in collaboration with EMI on iTunes, it should be clear to anyone with a modicum of integrity that Apple isn't bothered about the so-called iPod lock-in. iTunes is the market leader; the iPod is the market leader; and they will both remain so because they simply blow the competition out of the water. Just like being able to install Windows on your Mac via Bootcamp: yes, Apple could lock you in to Mac OS X if they wanted, but given the choice, you're going to stick to Mac OS X anyway. People will use Bootcamp for playing games, that sort of thing—but they'll live in OS X because the user experience is so much better. At the risk of sounding too much like an Apple fan-boy, the key thing that you have to remember about Apple is that they are absolutely convinced that they don't need lock-in: they've got quality instead. Hence Job's comments that they won't be bringing out a budget-priced Mac even though it would garner market share—there's certain lines they won't cross, like releasing rubbish.

The whole DRM finger-pointing is just a distraction from the real issue, which is cleverly hidden down at the bottom of the NYT article:
Under Universal’s arrangements with digital retailers, at least some of its new music will be sold in unprotected form for 99 cents, company executives said.

At least some—that's the key. The problem is that Apple has steadfastly refused to change the pricing strategy on which iTunes is based—99¢ per song. When EMI and Apple launched the iTunes Plus concept, with DRM-free songs of twice the quality for $1.59, there was some discussion with how that would fit together with the rest of the store. Again, quality—this time of user experience. There is a simple, elegant pricing strategy which permeates everything. But once they were convinced that the whole online thing could be profitable, the big labels have decided that such transparency was not what they wanted (EMI excluded, hopefully). What they want is variable strategies, with 'budget' prices for back catalogues and premium prices for everything else. Lonny Donegan you'll be able to buy for peanuts; you want the Pussy Cat Dolls, you pay through the nose.

While Apple and EMI have shown us what the future of online music could look like, Universal are digging their heels in and trying to recapture the past—a past where the consumer is kept in the dark as much as possible, because lack of and clarity consumer iand clarity is deemed an economic advantage. This isn't about DRM at all. It's about whether quality vs. quantity, transparency vs. obfuscation. The basic aim is the same—naturally, all these companies want to make money—but the methods are different. Do they provide you with the kind of service where you part with your cash willingly, or manipulate you into thinking you're getting a bargain when you're not?

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