The damage done
why music copy-protection hurts everybody

What’s up?

The music industry generally acts within the law, but that doesn’t make it right. And just because I don’t like it doesn’t mean it’s wrong. Let’s look at some of the key arguments about DRM (Digital Rights Management)—are there genuine problems? Is real harm being done?

Copyright, patent and trademark IPR (Intellectual Property Rights) are driven mainly by commercial interests today.

These rights are aggressively protected by new legislation. Even so, corporate owners frequently overstep the law and intimidate legitimate users into backing down. Strong-arm tactics like these are preferred by the entertainment industry too.

DRM covers a wide range of mainly digital IPR techniques. In some sectors (e.g. journalism) DRM is used to fingerprint and track content, and facilitate royalty collection. In the music industry it’s normally used to prevent recordings being shared. The Major labels favour extreme DRM.

In February 2007 Steve Jobs issued an open letter calling for the Major record labels to drop DRM.

Subsequently, EMI adopted a new two-track approach, releasing downloads without copy-protection at a slightly higher price. The extra cost doesn’t buy additional rights it merely allows the customer to exercise their existing rights fully (in the USA). The other 3 Major labels continued a DRM-only policy and Universal (UMG) threatened to withdraw its content from iTunes Music Store.

What are artist’s rights?

The rights of authors and performers may not be quite what you think. They don’t mean all copying is banned and they’re not the same everywhere (some countries allow personal copying and most allow copying for education and journalism). They generally mean artists can decide how their stuff is used (moral rights), and expect to be paid if it’s used by someone else (economic rights). Consumers have rights too: I can’t demand to see the sales receipt if I hear one of my tracks playing on someone’s iPod.

DRM is not simply a technical implementation of copyright, it goes further than copyright. These are new rights invented by the record industry and not recognised by law, including the right to:

This is clearly an extension of rights beyond what is expected by artists and beyond what is supported in law today. It’s interesting to compare the approach of the music industry with text publishing. CCC uses RightsLink technology to improve existing rights management, not to put restrictions on authors and consumers.

The record industry claims these measures are necessary to protect digital copyrights but they always confuse download listeners and infringers. Every track played online is counted as a lost sale unless it is bought from a licensed retail site. Even a 5 year old understands the difference between a radio and a shop.

The real harm of digital rights management (among other things) is that it:

Labels might argue that new technology is necessary to control business on the Internet. Real independents and other media (text and graphics) show that’s not true.

Who benefits from artist’s rights?

The music industry presents DRM as a tool for preserving artists’ rights—they don’t like to talk about their own interests. They have no inherent rights to music or recordings. With minor exceptions they don’t write or perform the material they sell, and they don’t pay for the recordings. Here’s how they really look after their artists’ rights.

First, they transfer ownership to themselves wherever possible. Consider this: who owns the rights to all the music and recordings built up over the history of popular music? Is it mostly the artists, or mostly the music industry? It’s no coincidence that the two biggest music businesses (labels and publishing) are based on recording and content copyrights.

Second, they pay as little as possible to use the rights they don’t own. The best deal any artist can dream of is 20%, and only Dave God gets that. More often it’s single figures, usually low single figures. Record companies charge their artists more for CD packaging than they pay them for their work.

Third, they don’t use much of the remaining 80% to cover their artists’ project costs. Most of that (recording, packaging, publicity, freebies, etc.) comes out of the artist’s royalty.

Fourth, they use DRM to further their business interests (e.g. by exploiting customer registration details as mailing lists) rather than to protect their artists’ assets.

Fifth, they retain recording rights but fail to exploit back catalogue. Although there’s a steady demand for many mothballed classics most CDs are deleted as soon as they fall out of the charts. The Majors’ blindness to anything less than platinum denies artists their rightful trickle of long tail sales.

They take over 80% at almost no cost to themselves and hoard as many rights as they can for as long as they can. Is the industry really acting on behalf of artists?

At Christmas 2005 Sony/BMG recalled XCP copy-protected CDs, costing 52 of their biggest artists important seasonal sales from long-planned releases. Artists would be better off without this kind of protection, that’s a fact.

How does it affect independent artists?

Unfortunately, although you can retain your rights, you can’t escape the clammy tentacles of the music industry entirely by staying independent.

1.Good quality domestic recording, duplication and media, and independent music channels (e.g. MP3 players, Internet radio and P2P) are under continual attack and restraint by record industry lawyers.
2.There is a de facto monopoly on new content for public music channels, based on records from Major labels. playlists contain little else, even though more than 80% of new titles are produced by independents.
3.Performance royalties go mainly to Major label assets, based on usage returns from radio and TV (i.e. those same playlists).

Happy coincidence? Who would lose out if independent home recording and distribution were allowed to flourish?

Sony formally abandoned their home audio digital recording format (MiniDisc ATRAC) in 2007. It was a technology leader for many years but crippled by built-in copy-protection and consumer-hostile devices. Sony continues its failed policy in many later products (e.g. UMD) with a blind belief in restricting consumer functionality.

How does it affect the public?

Of course, the public don’t want:

Subscription DRM tracks are locked in the customer’s devices and only work while subscriptions continue. In a frenzy of digital paranoia the industry has forgotten that analogue copying works perfectly well and analogue to digital conversion is trivial.

The public and their rights are also targeted by record labels as they seek to:

So the public treats Major label content on the Internet like poison or uses it recklessly, while hardcore infringers continue duplicating CDs and running offshore servers.

The artistic, economic and legal stranglehold of the music industry has alienated writers and performers, but the resulting lightweight celebrity fog and dire pop are only a passing inconvenience to the public. People aren’t hostages to the music industry or the technology treadmill. Eventually they get to choose what they listen to and how they do it. On one hand they have the traditional media, grown fat, lazy and undemanding, accepting whatever the Majors dish up every week. On the other hand they have everything else human beings can think of. The playing field is clearly uneven—the music industry doesn’t stand a chance.

This doesn’t mean the old order will be destroyed and a new people’s music will rise from the ashes. It means the industry of tomorrow will have to be different.

The future

Music industry moguls don’t spend the whole day squeezing every last drop out of their artists, when they have a spare moment they like to squeeze the fans too. They have a secret fantasy. One day all copying will be eliminated, people will pay for every second of music and record companies will hold the bulging purse.

Futurologists tell the moguls what they want to hear—digital technology will finally give them total control. The punters will get nothing unless they pay. Tiny implants will check their mood and download video enhanced music experiencettes from a vast central database, automatically debiting their bank accounts and triggering a global network of electronic royalty payments while updating their personality smart cards.

It’s worth remembering modern technology hasn’t found a replacement for paper yet (and the paper industry is booming).

But the industry is still fishing for solutions in the wreckage of dot com Titanic and many millions have already been spent. Even so, very slowly, the inevitable truth is becoming clear. CD DRM persists only in a handful of failed experiments. The Major labels have begun to release DRM-free downloads too.

The Majors don’t use any ideas less than twenty years old. They rely on recording and publishing copyrights, plus a grip on national media and high street retail. Once, this was the whole music business—now it’s a shrinking sector. DRM won’t make physical records more profitable and it won’t grow the new media music business. It will disappear eventually.

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