Today record labels may find digital rights management less easy to defend

The adage I heard as a kid was, “Why would anyone buy the cow if they can get the milk for free?” True, these sages of my youth weren’t referring to music downloads and DRM (digital rights management). But record labels with much to lose financially have used this argument to defend their aggressive protection of their artists’ intellectual property. They have to be troubled this week by news of Radiohead’s In Rainbows topping album sales charts — in spite of the band’s offering this CD months ago for download, unprotected and at whatever price a listener would like to pay (including nothing at all).

Radiohead wasn’t the first to act on the urge to give fans a voice in setting the monetary worth of their music. One of the first artists was Issa, formerly known as Jane Siberry. As I’ve written before, this is an online business model not unlike street corner busking — in a way returning artists to their performing roots. Radiohead is, however, the most prominent group of recording artists to try this model.

Now, according to a New York Times account released late Wednesday, the band — and their recording label — are reaping an unexpected windfall from this experiment in open source music. Here is an excerpt:

In a twist for the music industry’s digital revolution, “In Rainbows,” the new Radiohead album that attracted wide attention when it was made available three months ago as a digital download for whatever price fans chose to pay, ranked as the top-selling album in the country this week after the CD version hit record shops and other retailers.

The album, the first in four years from the closely watched British rock act, sold 122,000 copies in the United States, according to Nielsen SoundScan.

Part of the reason I find this fascinating is, frankly, personal guilt. This news helps assuage any feelings I might have about copyright violation. Like millions of others, I too occasionally trade digital copies of CDs I like with a friend or two. I tell myself this is ethically acceptable, because it promotes music that my friends might not hear otherwise. In my defense, these friends are hardly a mainstream bunch.

They listen to long tail music.

That means chances are slim they would otherwise sample a given artist’s music. What’s more, these folks are the sort to glom onto an artist they like. They may wind up buying all of that artist’s work (yes, I’m thinking of you, Michael!).

As a business model, I wonder if all long tail artists and labels might benefit from “legal” DRM-free distribution. Perhaps DRM should be removed from any downloadable CD that doesn’t meet a certain sales level. And perhaps the stigma should be removed from ripping and sharing (one-on-one only, not using peer-to-peer online pirating platforms).

Call it a crazy libertarian streak, but I’m the type to wonder about decriminalizing other activities whose overall harm is in serious dispute. This latest news raises the “dispute level” for me of this common little “crime.” It makes me wonder even more about the real financial harm done when a CD by a relatively obscure artist is shared at no charge.

What do you think?

3 thoughts on “Today record labels may find digital rights management less easy to defend”

  1. You know there s something wrong with copyright law when fans are not allowed to freely promote music they like to their friends. You also know that something is wrong with a law when millions of people violate that law constantly.

    Personally, I don’t think that music sharing/stealing via the internet has had a negative impact on the music industry as a whole. The problem the record companies face is that the sales are being taken away from record company artists because they no longer control all the major pipelines that people use to discover new music. ie: more people are discovering and enjoying music from non-record label artists. The foolish reaction of the record labels to this situation (suing their customers) as well as their fear of new media avenues (music podcasts, streaming internet radio) only exacerbates their problems in the long run.

    I find lots of new music by listening to streaming internet radio and music podcasts. There is no big label music on these channels because the labels won’t allow it, or they force podcasters/internet radio stations to pay ridiculously high broadcast permission fees. They fail to see these channels for what they are, FREE PROMOTION.

  2. This is a tough issue with no easy answers. I am less concerned about musicians who tour (and even less for the labels who have historically been greedy and given the artists leftover crumbs) than songwriters who don’t perform their own material and rely on royalty checks to live and continue developing their craft.

    What I love about the sources quoted above is that it turns anticipated logic on its head.

  3. Thanks for your comments, Matt.

    I agree that major record labels may be missing the boat by pricing themselves out of non-pay online sources (streaming radio and podcasts). The internet is not only a great supporting medium for spreading the word about new music … it’s replacing, in many cases, traditional media such as broadcast radio and broadcast and cable TV.

    And Michael: Yeah, it’s always gratifying to see an industry that’s too rigid to adapt see the premises of status quo arguments challenged by consumer behavior.

    I’m wondering what will unfold with EMI, which is vowing to cut most of their non-profitable artists from their roster, in a sink-or-swim challenge. My suspicion is that a few niche artists will swim just fine — away from traditional management for good.

    They’ll find profits by a more direct-to-listener business model. Thirty years ago Johnny Rotten sang to his ex-label (they had dropped his influential punk band, which was scooped up by A&M): “EMI … Good bye!” Who will be the first of this latest batch of expats to blow a raspberry and proceed to earn pots of money.

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