In a departure from the company line, Yahoo Music chief Dave Goldberg said yesterday that digital rights management (DRM)--the usage restrictions that record labels insist must be attached to legally downloaded music--is holding back the industry. Speaking at the Music 2.0 conference in Los Angeles, Goldberg said too much free music is still available to consumers through peer-to-peer (P2P) services and elsewhere to constrain those who are willing to pay for music. "There's no ambivalence anymore as to whether or not this digital thing is going to fly," he said. "There is a cost associated with DRM, and that is lost sales of content." Goldberg said he was primarily talking about removing DRM constraints from fee-based music subscription services like Yahoo Music Unlimited. "If all CDs had DRM on them, [the labels] could make a better argument, but they're already selling millions of CDs without DRM," he continued, making a case for selling unrestricted music in MP3 format. "Let's just sell them MP3s. That's what they want--let's give it to them." Goldberg's call went against the argument that label execs have been making for several years, including Ted Cohen, EMI's top digital music guru. In an earlier panel at the Music 2.0 conference, Cohen noted several times that DRM is necessary to moving legal downloads forward. "The DRM makes the business model possible," he said. "Without DRM, you can't have the business models and give people choices." The restrictions placed on legally downloaded music, such as limits on CD burning and transfers to portable music players--have plagued the consumer experience largely because rival companies have competing forms of DRM that don't play well with one another. For instance, songs downloaded on Napster, Yahoo, and Rhapsody are Windows Media files with PlaysForSure DRM, making them incompatible with the far-and-away leading portable music player, the iPod. Read the rest of the article at MP3.com.
Good for Goldberg. To be honest though, the large entertainment companies are not putting money into music or even generic entertainment, but into advertising. If their advertising campaigns are successful, people buy their products. DRM is accepted by such people to whom aggressive advertising is a catalyst for whether or not they like a certain "musician" (and I use the term loosely here). I think DRM will work fine for the unwashed masses, but educated people will always resist it -- of course, they will probably resist the very music which is restricted in the first place, so they are obviously not the target of this debacle.
