October 9, 2007 | By Fred von Lohmann

Is DRM "Enabling New Business Models"?

Advocates for the DMCA's ban on circumventing DRM have long argued that legal protection for DRM is necessary to "enable new business models" that will "create more choices for consumers." A recent blog post by Yahoo Music's general manager, Ian Rogers, suggests that the DMCA hasn't actually delivered on that rosy promise.

According to Ian, who has been part of the online music business from nearly its inception, DRM has been an impediment to the creation of new business models, not an enabler:

8 years. How much opportunity have we lost in those 8 years? How much naivety and hubris did we have when we said, "if we build it they will come?" What did we spend? And what did we gain? We certainly didn't gain mass user adoption or trust, two prerequisites to success on the Internet.

The former head of Yahoo Music, David Goldberg, said much the same thing last year.

This is Yahoo, the "legitimate" player, trying to work with the music industry to "enable new business models." Final verdict? Yahoo is done with DRM for its music offerings:

I'm here to tell you today that I for one am no longer going to fall into this trap. If the licensing labels offer their content to Yahoo! put more barriers in front of the users, I'm not interested. Do what you feel you need to do for your business, I'll be polite, say thank you, and decline to sign. I won't let Yahoo! invest any more money in consumer inconvenience. I will tell Yahoo! to give the money they were going to give me to build awesome media applications to Yahoo! Mail or Answers or some other deserving endeavor. I personally don't have any more time to give and can't bear to see any more money spent on pathetic attempts for control instead of building consumer value. Life's too short. I want to delight consumers, not bum them out.

The rest of the "legit" music industry is also moving away from DRM, and there are precious few examples of new models "enabled" by DRM (Apple's iTunes succeeds despite DRM, not because of it, as Steve Jobs made clear in his "Thoughts on Music").

The last frontier is subscription services. Many still argue that DRM is "necessary" for music subscription services like Rhapsody. It is high time someone start questioning this received wisdom, as well. If Rhapsody gave up its DRM tomorrow, how much of a difference would it make? After all, any minimally motivated subscriber can already turn their Rhapsody streams into downloads.

Rather than worrying so much about how to erase all the music when a subscriber stops paying, the music industry needs to worry more about giving music fans a reason to come in from the P2P/iPod swapping/CD burning cold (hint: threatening them with $222,000 verdicts isn't going to do the trick).

We hate to sound like a broken record here at EFF, but how about offering fans a blanket downloading license for a few dollars a month?


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