Monday, April 02, 2007


Episode #28 - Apple and EMI's Timid Step


Apple and EMI Music today made a "historic" announcement that they are dropping the DRM from downloads. Sort of. Find out why I don't think this announcement is not all it's cracked up to be, and how indie artists can still do better selling their own music.

Vergel Evans -"E k G"
Check out Vergel on the Podsafe Music Network

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Jay, I respectfully disagree. I think you went off half-cocked on this one and did not consider (or present) some very relevant facts:

1. The increased cost is not just for removal of DRM, it's for a double bitrate AAC. While I would have liked loss-less AAC makes sense on a number of levels - there's some interesting speculation about that going on today.
2. Album purchases will remain the same price as encumbered downloads, which should incentiv-ise the purchase of full albums, which were often a better deal anyway.

This may seem like a timid step to you, but I believe it is more like looking at a chess master making the move that essentially wins the game, even though you don't see it, it's inevitable w/in a few more moves and both players simply "call it"

PS: I asked about it w/ CD Baby, and the response I got was that they're working on it, I really think you are looking to close at the trees on this one.
Kaklick, some good information, but I stand by my conclusion that this is a timid step.

My basic premise and main point was that the prices for DRM'ed lossy music was too high to begin with. If you thought a 99 cent fixed price for a compressed AAC file was a good deal, I guess that's your call, but I never did and I don't think most people who think about it for 3 seconds do either.

You're right, I did leave out the fact that it is a double bitrate AAC file, still not as a good quality as CD but indeed better than it was. That said I also left out the fact that not every player can play AAC, as did Apple and EMI in their announcements, but those points to me are not terribly relevant to my conclusions, unless again you thought you were getting a sweetheart deal before on digital downloads, which I didn't.

The album pricing thing I honestly wasn't clear on. You're right, albums are a better deal than single track downloads, but they are still not great deals.

I guess I just have a hard time seeing what these companies, who have essentially been in collusion for years to keep prices artificially high, as "chess players" rather than robber barons. But perhaps you're right. After all, the major labels are all doing so well financially, aren't they? Not to mention the fantastic music most of the artists on their catalogs are producing. I should probably cut them some slack.
Didn't mean to get you so worked up, thanks for coming by the show tonight, btw.

Yes, if you think that $.99 is a raw deal I can see how you think this is even worse. I see this as the first crack in the dam. I also tend to purchase more albums than individual tracks - especially when there's a bunch of little tiny ones involved. I also made darn sure that my albums both had at least 11 tracks to make the album deal at least worthwhile (assuming you think my music is at all worthwhile).

Something I'm not used to exactly, but considering the market share figures, a good 90% of the players in peoples hands today play AAC - yes, that's because Apple has a good 80% market share and several other high profile players are coming out w/ it (Zune, etc.) and it's likely that going forward, more players will add it if they can get a piece of the iTunes pie. MS screwed them w/ PFS and MP3 is a patent mess right now. THe real chess game is actually 2 fronts:

Apple v MS format wars - Apple has a stake in the world not getting locked into WMA and this is playing out well. AAC is an open part of the MPEG standard, WMA is wholly proprietary if that went the other way, it'd be very bad for consumers. The other front is trying to get DRM out of the picture - it's been clear to me from the start, that this is all about the labels - Jobs is forcing their hand and now that one has fallen, it won't be long before we see the others follow suit. You have to know that the labels aren't going to give up their DRM w/o some quid pro quo (think Hannibal Lecktor) and the higher price is the carrot that complements the "stick" that Job's open letter was.

I think the problem is you're seeing Apple and the big labels on the same side of the chessboard, when I see them on the other side from each other. I'm dead certain that if he could have, Jobs would have opened the ITMS w/o DRM, only problem was he would have not had any product to sell. They always put on just enough DRM to keep the labels from walking away.

I still think you have some blinders on on this, did someone in a black turtleneck and jeans take your lunch money when you were a kid? :-)
Kaklick, no worries, didn't mean to sound angry although I do enjoy arguing this stuff. You sounded great in SL tonight BTW, sorry I had to take off, heading to NYC in a couple of hours and a had a bunch to do.

I'm starting to understand why people are arguing on the side of this, they're seeing it as a Apple vs. MS thing. It's not about that for me. Personally I don't care about Apple vs. MS (at least in this context), and I totally agree it's at the behest of the labels that any DRM is still in place. That said I do still think Apple have had a hand in exasterbating the situation by perpetuating their own essentially iPod-only format for years, so they're by no means lily-white in this. Let's remember that Apple were named in a suit by the French government over their DRM as being part of a non-competitive practice on their part. Is Jobs singing a different tune now? Sure, and good on him, he's a smart man and he sees which way the wind is blowing, but let's not pretend Apple had no hand in creating this mess in the first place. All that being said, I agree totally that most of the blame here lies that the door of the labels, not Apple or any of the other music store operators or hardware manufacturers. It's them I suppose I'm really beefing on, okay fine. You see it as a chess game with Apple vs. the labels? Sure, whatever, but that's inside baseball in my book and outside of what I was trying to get at.

My point is that the model is messed up from the get-go. I love your whole thing about how strategic you are about what you buy and sell (you buy mostly albums only, your albums have 11 tracks or more) to make sure you're getting/giving a good deal. Don't you see how that proves my point? Why shouldn't single tracks be a good deal, isn't that part of the promise of the legal download revolution? The pricing model is f'ed at it's core, and now they're finding a way to charge me _more_ for individual tracks? THAT'S my objection. Prices should be dropping, across the board. These companies should not be looking for ways to charge more money for individual tracks, period. And I'm not totally out on the woods on this, check out the Lefsetz Letter link from the original post.

I'm not anti-Apple, I'm anti-label. Actually I take that back, I'm not even anti-label, I'm anti-DRM and anti-stupid-business-model. Single tracks (and generally full-album sales too) are overpriced, that's really the beginning and end of my point.
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Just thought I'd add a link to a Daring Fireball piece that came up for me today:

I think it sums some things up nicely.
Thanks for that Kaklick, it actually does clear up a few things. That said, this is still beside the point as far as I'm concerned, the use of AAC vs. MP3 for me personally is of little relevance. AAC is, as the article points out, a common and well-supported format, so non-DRMed high-quality AAC is a perfectly reasonable solution as far as I'm concerned.

My main point remains on price, and the fact the price is fixed for all songs so it's pretty much impossible to compete on price. Nobody has yet convinced me that I should be paying more for something that was idiotically already overpriced.
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