Monday 12 January 2009

The futures bright – the futures open

So Apple has followed Amazon's lead and is planning DRM free downloads. This is quite a turn up for the books as industry insiders had been saying that it could be anywhere up to 5 years before the market realised what a handicap DRM actually was. The main drivers of DRM have been two-fold – a demand from the music industry keen to protect its content and a bonus for suppliers like Apple, keen to take advantage of a closed market that forces users of its hardware to buy the music it sells.

However what everyone seemed to have missed was what the consumer wanted. Sure, before legitimate sites appeared people were downloading and sharing MP3 tracks like it was going out of fashion and this made a real dent in record label sales. However this was in part driven by the desire to consume music differently and the record companies were slow to react to this initially. When they did then begin to recognise this paradigm shift they were trying to close the stable door even though the horse had already bolted – consumers were used to having their music held electronically and moving it from device to device and DRM was preventing this.

Apple managed to mask this undercurrent of discontent by creating a fabulous product – the iPod - which is still yet to be bettered in many people's eyes and it was this that drove sales on iTunes. It was never about the iTunes software or the iTunes store – these were simply a means to an end which was the iPod itself.

But for consumers like me – and I know I'm not alone here – DRM created a fundamental stumbling block. I refuse to purchase something which I own but cannot do with as I wish. I know I could burn music off onto CD to "own" – but this is a poor substitute to the real CD and anyway, I want the music on my PC, on my laptop, on my server, on my phone. It's my music and I want it where I am. While I'm paying a price close to the physical product I'll just buy the CD instead which gives me a multitude of options – and it looks good on the shelf.

The argument that DRM prevented music theft through file sharing was ridiculous – anyone wanting to share music would just rip the original and post it for everyone else. This meant the music industry spent time and money trying to fight these file sharers – posting spoof tracks to the sites and taking legal action where they could. Meanwhile their law abiding consumers were being inconvenienced and ripped off because of their DRM technology.

Many years ago the software company Borland had a simple and ground breaking licence agreement – treat the software as you would treat a book. You can't read a book in two places at once so don't use the software in two places at once. They didn't try to actively prevent you installing it on two different machines, say how many people could use it or dictate how many times it could be installed – they just told you how it could be used in a way which was fair and worked for them and the consumer.

Contrast this with the attitude of Sony in 2000 when they were quoted as saying "The industry will take whatever steps it needs to protect itself and protect its revenue streams… Sony is going to take aggressive steps to stop this… We will block it at your cable company. We will block it at your phone company. We will block it at your ISP. We will firewall it at your PC". Despite sounding like Deputy Marshal Samuel Gerard from the Fugitive with his request for a search of every "warehouse, farmhouse, henhouse, outhouse and doghouse", it's also not a particularly customer friendly approach and quite obviously there is no mention of the consumers interests here – simply the protection of their revenue streams.

Later when Sony tried to implement DRM on CD's in 2005, the public backlash to this was probably the nail in the coffin for DRM. A number of people filed lawsuits against Sony BMG because of how this was implemented and the potential security holes it created and they ended up having to recall all the affected CDs.

Customer loyalty can be earned through consistently good customer service and great products or it can be forced in the short-term by monopolistic behaviours such as walled gardens and proprietary products – I know which I'd prefer and I've demonstrated it with my own purchases. Since the launch of Amazon MP3 I'm now buying music online in non-DRM MP3 format and it sits on my server, my phone and my laptop so I can listen to my music when I want and where I want.

All in all this has been a demonstration of an industry that hasn't seen the tide of change coming and was surprised and out manoeuvred by new technologies and which then reacted to it in a slow and draconian way.

It's good to see the industry is finally seeing sense and although it's taken almost a decade to get this far I think the future now looks bright. Removing DRM will allow for increased competition and openness – spurring on innovation in how people find, buy and consume music - it might also allow a refocus on customers and what they want.