Apple is posting that iTunes sales are down - both in total sales and total per transaction. It’s almost low enough that they could be losing money on the simple cost of transaction - which is impressive, seeing as it’s entirely driven by computers.
I like my iPod… far more than an anti-Mac enthusiast probably should. Second only to my PSP, it’s probably the coolest thing I own. However, I’m one of those people who is bringing the ratio of songs bought from iTunes to iPods sold down to 20. I don’t even have an iTunes account set up yet (although I have tried - usually if I can’t get “theMediaman” as my username I give up). So what’s the problem? DRM - Digital Rights Management.
If you buy a song from iTunes, you can only play it on your local computer, or an iPod (TM). The file is digitally encrypted so you cannot play it or convert it easily into another format. In fact, the only way to circumvent DRM is to burn it to an Audio CD, then re-rip it to MP3, OGG, or a handful of other audio formats playable by 100% of portable music players. The problem with this roundabout way of doing things is that you have to waste a CD (Apple contributing to the non-recyclable content!) and compressing your audio again can add new artifacts to otherwise clean music.
I used to argue how the current move to MP3 as the audio format of choice is similar to the advent of livingroom VCRs, cable TV and playing music on radio stations. A few innovative people started an economic model around it, were sued into oblivion by copyright holders. Successive innovators then get sued into submission, crippling innovation long enough for the rights-holders to catch up and build an economic model that exploits that system. I agree with the exploitation and developing an economic model around a good idea, and I firmly believe that the rights-holders deserve the money that is due to them. I have a problem when the legal team has more say in what can and can’t be done than the innovators.
Here is where DRM entered the picture. Rather than building an economic model around the distribution of music on peer-to-peer systems like Napster or the legions of similar programs, encrypted audio - and later video - were used to ensure that spreading of digital audio files didn’t happen. Unlike published video cassettes, cable television and music on the radio, the economic model for digital music sales provides a product that is inferior to the inspiring technology. Legal options for use are limited, and sound is compressed to a point that some details of the audio becomes lost (vs. the pure sound on audio CDs). The same is the case for audio you get from the peer-to-peer programs, but you can often opt for higher-quality compression, or even a lossless compression format - making audio as clean as if it were coming from your CD player.
The reason DRM is failing is because it gives us an inferior option to the alternative, and at a cost. I had Princess Bride taped from television, but I bought the production VHS tape anyways - the better quality made it worth $16. A structured cable system for television channels gave better quality and more options to people than a small community sharing the cost of a high-gain antenna. Distribution of music to the radio stations allowed the masses access to the newest music, resulting in higher sales of records. In fact, all three examples have two things in common; the innovator was sued brutally, and in the end the rights-holders turned thousands of dollars of profit into millions, millions into billions, and billions into trillions. All this through understanding the innovation, and providing a better product.
DRM music (and videos) may remain, but it will never accomplish for the owners of the rights nor the media what radio did for music, what cable did for television, or what VCRs did for home movie viewing.
