EMI/iTunes DRM Drop | Some Additional Thoughts

So because I’m a bit of a nerd when it comes to all this digital music stuff, I wanted to follow-up on yesterday’s big iTunes/EMI news.

If you missed it, there’s been a ton of blog chatter about it. But if you don’t have time to read all the other posts, here’s a quick run-down of the key elements:

-EMI’s entire catalogue will be available on iTunes free of DRM (copy-protection)
-Tracks will be available at higher bit-rates (256 kbps in place of 128) – which should lead to better audio quality
-The new tracks will cost $1.29 (a $0.30/track jump up from the standard $0.99/track cost)
-Complete albums will be sold in the higher bit rate but at the same cost (automatically)
-EMI will also offer other retail partners the opportunity to sell unprotected file formats

So this is definitely big news, but my sense is that it is mainly a big deal because of the symbolism: a major label finally giving in and dropping its stubborn stance on DRM. In the current state of the music industry, that’s a big deal. Of course, my cynical side says this is just as much about creating additional hype. In practical terms, I’m pretty doubtful this move will create a huge change in consumer behavior, (especially with the higher price tags), but symbolism and hype can certainly be powerful forces.

Now the key element will be how the other Major labels react. Will another Major follow suit with a similar change? Or will all the big dogs just hold back and watch how the EMI’s experiment goes? I think it is the reaction to EMI’s change that will really be what make a difference…and as said, the reaction in terms of hype has already been deafening.

So the other Majors can now sit back and watch how the “no-DRM experiment” works out. They might eventually jump in the game with their own experimentation, but they may see that it’s effects are small and hold off even longer. So I’m not so sure this will have the big over-arching effects that most consumers really want to see.

A few more observations after the jump…

Does the major music-buying public really care?
Honestly, I don’t know. I think the DRM debate tends to get a bit blown out of proportion, especially in the blog world. I know I care, but I know plenty of people who don’t or who don’t even know what DRM is. So is this just the latest hype in the blogosphere or will it open the average consumer’s eyes?

Incentives to buy albums (rather than individual tracks):
Some of the more interesting developments are Apple’s recent policy changes that offer incentives to buy albums. Hypebot reports:

In a move that other retailers are sure to mimic, iTunes will offer full album downloads for the current $9.99 price and 20-30 cent song “upgrades” to DRM free for those who have bought tracks previously.

Apple also recently revealed the “complete my album” option that allows consumers who’ve bought a few tracks from an artist, buy the full album at a reduced rate. I think these are both solid, artist-friendly moves that other digital music retailers will definitely seek to replicate. Speaking of other retailers, a lot of folks think that this move might actually help their situation in terms of competing with the iPod/iTunes behemoth.

Higher Bit Rates
This is probably the most surprising news. And as somewhat of a nerdy audiophile, I think I dig this news more than the average consumer. And, I think most readers of this site probably feel the same way, considering the number of folks who have probably downloaded music in a lossless file format from the Live Music Archive or grabbed a FLAC torrent off of Etree. So to all of us audiophiles, this will likely appear to be a step in the right direction. But I’m not sure anyone in the general public will significantly alter his/her buying habits because of a higher bitrate.

Higher prices and consumer confusion?
If anything, my sense is that the higher price tags and additional options might just make the buying process more confusing. The added options create a level of complexity to the purchasing process — one that consumers might just not want to even think about. Just think about the process…”should I shell out an extra $0.30/track or just grab the $0.99/tracks?” And that doesn’t even factor in the enormous amount of people who just opt for “free.” Lastly, hasn’t Steve Jobs been completely set against “Variable pricing” since day one? Isn’t this just another form of variable pricing?

From the LMB perspective
While all of these are key elements and considerations, I actually have a completely different take. When I really put on my “live music blog” hat, I start thinking along these lines:

There is just so much fuss over the sale of these little digital tracks (I mean look at the sheer amount of media attention this story has garnered)…..so much hemming and hawing about easily copied bits of code and how to balance all these competing interests — from the major labels’ stubborn stance against unprotected Mp3s to the rabid music fans that think any kind of DRM is another nail in the coffin of “Fair Use.” And, again, these are the people who tend to be the more lawful customers (we’re hardly even talking about the dreaded “file-sharers” who play a huge role in the minds of Major label CEOs everywhere!).

Yet, what’s fascinating to me is that so many of the bands that end up on the pages this site hardly even need to deal with these issues. Sure, they’d like their albums on iTunes, they might have some tracks up on eMusic, but most actively touring bands know where their bread and butter is: playing concerts! They promote themselves by giving away lots of music and getting people to shows, allowing fans to tape and trade live recordings, and generally by getting fans interested, involved, and obsessed…This was an almost accidental “business model” utilized by the Grateful Dead, later perfected by bands like Phish, and now put to use by thousands of bands in a variety of innovative ways (and not just those in the “jamband” category either!).

So, in the context of the live music scene, when bands can find success by selling a mix of concert tickets, recordings of those concerts, and merchandise, doesn’t all this seem like a lot of fuss over tracks that sell for $0.99 a piece or less?

Haven’t had enough? Read more:
Hypebot has solid in-depth coverage

Digital Music News is on it

Coolfer (includes a link to the webcast of the press conference for the truly obsessed) and also has some analysts’ reactions

Engadget has a solid write-up that formulaically pokes holes in the entire charade to show us it’s a bit more of a ploy….and they’re already looking to Microsoft’s Zune for the next DRM-change.

Bob Lefsetz, as usual, thinks this move is ‘irrelevant!’ in yet another classic Lefsetz rant. He then proceeds to call out Steve Jobs on the European politics of the decision with some great points.

Fred Wilson has a pretty positive take.

I’m sure there’s more, but these are our favs.