January 4, 2008 | By Fred von Lohmann

Last Major Label Gives Up DRM

Back in December 2005, we announced the beginning of the end for DRM on music. Well, two years later, we're getting close to the end of the end, with Sony-BMG announcing that it, too, will be giving up on DRM for music downloads (at least for some of its catalog). Sony-BMG is the last of the four major labels to take this step.

It's about time. As online music retailers have been pointing out for years, DRM has only held back the authorized downloading services in their efforts to compete against the unauthorized world of P2P file sharing.

This isn't quite the end of DRM on digital music, however. The last hold out is DRM on subscription services like Rhapsody and Napster. Some have argued that DRM is necessary for the subscription business model, an argument that I think doesn't hold up under scrutiny. After all, anyone with any motivation can convert their Rhapsody "streams" into downloads, DRM notwithstanding. So it's not the DRM that keeps people paying their monthly subscription bills -- it's convenience, inventory, and other features that add value to the experience (DRM, on the other hand, is about subtracting value from the fan's experience).

But there is also evidence suggesting that DRM on streams may be dying, as well. Leading next-generation streaming music services, like iMeem, are using FLV (a streaming format with no DRM) for their music offerings. And iMeem is licensed by all of the major labels, so it appears that DRM is no longer a requirement for authorized music streaming, either.

Next step (and I hear that at least one major label is considering it) will be a blanket license for music fans -- pay a small monthly fee, and download whatever you like, from wherever you like, in whatever format you like. This is the inevitable end-game in a world where file sharing remains hugely popular and the labels want to prevent new retailers (like iTunes) from controlling distribution.

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