Keep on DRMng ?

Last night at the Virtual Worlds session I was talking to two of the sponsoring consultants about DRM, when one mentioned SnoCap as the best system for music distribution today.

I said I thought it was worth waiting a few cycles to see how it pans out (knowing that Sean Fanning was already off to new fields, never a good sign). I then opined that iTunes, (a rival approach) was more than just a content delivery system and was actually a complete value chain, and that this was the real point to grasp, not the DRM free distribution solution component.

I'm no DRM fan (read this) but we need to look at things as they are, not as we would wish.

I was reminded about this little episode again after reading in the Wall Street Journal that EMI (one of the companies talking last night in fact) is trialling selling songs in unprotected MP3 format through Yahoo. Apparently online sales are stalling, so new models are being tried - about time, because the music industry (entirely via its own efforts) has allowed major competitors to disaggregate it..

With Yahoo in the frame it may just work - the thing that seems to elude everyone in this is that end to end Value Chain requirement and Yahoo gets that more than most.

I think DRM is a dead end, but there is one thing Apple taught us that seems to be missed so often; its not the point technology, its how to structure the overal value chain:

- Search for music you want via a high context database
- Get what you want - and only what you want - no bundling
- Make it easy to use and get a "free ride" on existing infrastructure
- Make the price acceptable, so the hassle factor of obtaining free music is a higher cost than buying it off iTunes
- Have a great user experience that connects into the delivery system
- Analyse the data in your end to end chain to improve the service, economics, stickiness etc etc

If these exist, then so long as the DRM is not rapacious, most people will put probably up with it - as the WSJ notes, Apple's iTunes accounts for more than 90% of the tracks sold online some weeks (according to people who work in the music industry).

And if you are going to build a zero DRM system this value chain becomes even more critical, because its only by having superior services that people will be tempted to drop free musc (aka piracy). And this is important. As the Journal notes:

Eric Garland, chief executive of BigChampagne LLC, which tracks peer-to-peer traffic, says more than one billion songs are traded over those networks every month. "It took iTunes several years to reach that particular mile marker," he notes. "The pirate market -- if we considered that a market -- would command better than 90% of the online marketplace."

To compete with all this free music will probably require a combination of better quality end to end services, and a pretty low cost of track purchase to the end user - which probably implies advertising or some other form of subsidy.

And if that occurs, you have to ask "why DRM" - DRM is necessary for a high price subscription or PAYG service, but is irrelevant for a subsidy model.

Will the DRM'ers wake up I wonder?

Postcript.....while searching for similar articles after posting, came across this one by Nick Carr (the Does IT Matter author).