Face it, DRM is here to stay. Sure there are cracks (thanks DVD Jon!), file-sharing networks, and Bit Torrent, but the fact is many people are still buying digital music online legally. Some pundits say DRM is either doomed to failure or harmful to the consumer experience because of its increasing lack of interoperability, but I see a clear path through the DRM labyrinth. One company in particular, Navio, has been trying hard to create a new paradigm of ownership for digital content—so-called rights-based commerce. So why hasn’t this potentially brilliant idea taken off yet?
It’s not rocket science why purchasing rights to digital music (and other content) is a good idea. You go to an artist’s web site or an online store and purchase the rights to a song, and those rights are stored in a “digital locker”. In some cases, you’d download the appropriately DRM-ed file directly from the site, while in other cases, you would receive a set of license codes for various online stores and download the appropriate file there.
For example, say you purchase a license code for a track off GWAR’s your favorite group’s web site, and you choose Apple’s protected AAC format. If you should later switch from an iPod to a non-Apple player, you could simply use your license code to download the protected WMA of the same track, since you own the rights to the song, not just the file you downloaded. And if you want to play that track on your phone or your work PC, you could just use your trusty license code to download the appropriate files without having to re-buy.
I checked in with Navio last week after having spoken with them over a year ago, and apparently the company has been working like gangbusters to overcome the technical limitations of rights-based commerce. In fact, according to Navio’s COO Ray Schaaf, the technical stuff is entirely out of the way, and now they’re just trying to solidify the business side of things.
I asked Schaaf how he feels DRM is perceived by the music-buying community and by artists.
“I think that musicians want to make sure their content can be readily available for consumers to listen to. Fundamentally what consumers are starting to realize now, as they get more intelligent, is that the interoperability is not working. For example, they’re trying to move stuff from their iPod to their phone, but it’s very hard to do. Consumers don’t want to become system administrators for their content. If people know they’re getting a fair deal, knowing the rights will always be stored in your digital locker, that makes it more valuable than piracy, because your music is essentially backed up in case of data loss.”
This sounds all well and good, but it carries the pungent odor of premium pricing, which is has about as much public appeal as E. coli. Still, Schaaf believes “consumers will pay a reasonable premium for that, because they are buying something different.”
Hmm. I’d like to believe that, but people already whine about how 99 cents for a song is too expensive. If rights to a song will cost anywhere from $1.29 to $1.69 (I’m guesstimating here), I don’t think anyone’s going to jump up and down just because they can get multiple formats and be able to re-download lost tracks easily. Where’s the attention to music lovers’ bargain sense? Subscription music services like Rhapsody to Go cost a lot less in the long run, and they also solve the data backup issue. And although interoperability is still minimal, you can enable more than one device for use with most services.
The only significant advantage of rights-based commerce that really stands out is the ability to get items in multiple formats for multiple devices, which is a nice perk, but it’s not something I truly believe people will understand well enough to pay a premium for. Schaaf maintains that bundling media together (videos, music, ringtones, digital booklets, etc.) is where Navio’s solution will shine, but I think the overwhelming majority of legal digital music buyers will perfectly happy to forego paying extra for something they can’t quite grok in favor of something they perceive as a little more friendly to the bottom line.
AudioFile by Mike Kobrin is a weekly reflection on electronic music and the MP3 biz. You can read his collected columns here.
Interesting Mike. Just to get it straight, you like Navio’s idea about buying a license or a set of songs rather than an individual DRMed file, but you don’t think it will really work in today’s market because of the cutthroat rates and because people aren’t willing to pay extra for the extra formats because it might be too complicated or not useful (at the time) for them?
Sounds good Mike. I definitely agree with your last comment on how consumers really wouldn’t be too receptive to a slightly higher priced song or license even though they get access to a backups/variety of formats. Yes a lot of consumers are tech savvy enough to want to take their songs off their iPod and onto their work computer or onto their phone, but I think the majority of iTunes customers really just listen to music on two devices: their home computer and the iPod.
An interesting idea would be for Apple to pair up its media market monster of iTunes and to buddy it up with Navio. Apple is always looking to expand it’s market, and as Jon (the other one) always says, they can always turn a profit by offering new formats of the old songs. In addition, it would also solidify (even further I guess) as the sole competitor in the online media market world. I don’t know how the corporate rights go and whether or not Apple could offer songs in WMA format, but it would be an interesting market concept.
As for GWAR, my roommate would say “God What Awful Racket.” I don’t hold an opinion. Keep up the great friday comments Mike!
Why will right to a song cost that much and not .99? Is this because you are putting one more party into the pie? Will this license based system work as effectively when the artist choose to leave the record companies behind which is guess is a fact within the next 10 years?
No…more…
coffeedrm…blah!DRM is such a mess. Whenever I want to buy music, I just get the CD for now. And I’ll continue to do that until they get this all smoothed out….
Sounds like a good idea, but why a premium price? If I can get a song in one format from Apple for $.99 and in another format from another music service for $.99. Why can’t this music service give me what I want for $.99? If they can’t stay competitive people are not going to bite.
I buy my music on CD from Walmart. $10 – $15 a piece and I can play my music on any device I want.
Anthony:
The extra prices for the songs are probably for the rights to license in the multiple formats. Like you said, if you were to buy a song Apple and get it in AAC format, you’d have to pay 99 cents. If you bought the same song again in another media format, you’d have to pay 99 cents. With Navio, you’d get the song in as many formats as they offer for only 30 cents more. Sounds like money saved to me.
The only thing holding this back is the lack of support. I saw that only Fox and Disney libraries are available through the Navio service.
And don’t forget, it’s like having an automatic backup service… if you lose your files, you can re-download. That plus multiple formats gives you a lot more value for your money.
don’t think i can jump on board here; DRM is still a four letter word in my book.
i don’t buy stuff from iTS (or anyone else) so i’m not sure if there is a backup feature. there should be considering the volatility of digital product.
i think the answer lies in itunes and others allowing the vendor to chose to have DRM or not. if apple has not allowed indies to peddle their wares thru itunes there must be a clause in the contract with the big labels that keeps them from doing it. after all, they have free podcasts and all this content is there just to fill the ipod. no more no less.
i think apple and the labels should look into ‘creative commons’ type licenses. these make more sense than anything else. it can give the consumer options in handling their content without treating them like criminals in the first place.
no matter how you slice it, it’s going to be an interesting year in the copyfight, that’s for sure.