Submitted by thewhippinpost on Fri, 12/01/2007 - 05:17.

Your Record Label - Help? Or Hindrance?

Signing your record contract If you're a record company executive, the future doesn't appear to be looking too great at the moment. More appropriately (perhaps), if you're an aspiring up-and-coming artist looking to be signed to a record label that still doggedly holds onto the Digital Rights Management (DRM) principal of distributing your digital music, then you might want to hold-out for a little while longer before signing that tempting deal.

If you've just recently signed-up with a label... your future perhaps doesn't look so great!

Digital Rights Management (DRM)

If you know what DRM is, skip this bit - If not, a brief description: DRM is basically a means to restricting where and how a file can be opened, and/or copied. It is/was hoped that DRM could smooth the path of nervous copyright-holders onto the web - By providing a means to manage the way people could not only buy legit copyright material, but also restrict how a customer could rip it to other media.

A quick example of DRM in operation can be found on your (now) common iPod: You buy a song from iTunes; Your song is encoded as an AAC formatted file; Only iPods can play AAC files; Songs are currently restricted to play on 5 different computers at any time; users can only copy their purchased song 7 times (previously 10); Apple can (and has), change its DRM policy at any time (No doubt with an accompanying nudge!) - Note: This list is not exclusive; media can be time-restricted (won't open after a set date/time) or "use-restricted" (5 use-only limit), for instance.

A more definitive description of DRM at Wikipedia

Change The Record DJ!

... 'cos this one is "f*%ked!"

The music industry timebomb is ticking  We only have to look back to November of last year (2006) to get a sense of how serious the conflict between restricted DRM music sales, unrestricted (non-DRM'd) music sales, and of course, plain unrestricted pirated free music downloads, is.

Big labels are f*cked, and DRM is dead
- Peter Jenner

Peter Jenner was Pink Floyd's first manager. He's also managed T.Rex and The Clash (amongst others) and today he manages Billy Bragg as well as being secretary general of the International Music Managers Forum

The guy is respected and listened-to!

As well as trying to wake-up the record exec's to get real, he also calls for a radical solution to the growing (or rather, declining) music sales riddle. Here's what he's fighting for:

He's calling-on the European Union to levy a mandatory monthly music tax on broadband and mobile phone providers of around €4/month which would allow consumers to download and consume all the music they want, without DRM.

Quite how the "music-tax" might be divied-out amongst artists - fairly and equally - would, no doubt, prove an interesting exercise in logistics. Nevertheless, that aside, of perhaps more concern to your future (or current) song-buying fans with limited income, is the prospect of them becomming criminals should they find themselves unable to afford the "music tax" one month

Try proving to the music police you don't have, or listen to any music!

... and as for asking Governments to enforce it?! (Hey! Why not just go all the way and Nationalise the whole music industry, why donch'ya?!)

You might think this is unworkable, if not completely laughable, but consider that the UK Govt - back in the 80's - allowed the music industry to levy a tax on good 'ole music cassettes in a bid to recoup lost revenues from pirated copies of music, on said cassette tapes.

Music for Rent

Yahoo Music's GM, David Goldberg, was interviewed by Michael Arrington of TalkCrunch yesterday where he spoke (on a Podcast) of the fate of DRM. Yahoo Music is one of the world's largest music websites. They provide a monthly music subscription service at $6/mth (starting price - Premium service = $11.99)

But here's the interesting bit: Goldberg evealed that record labels in the UK are demanding £15/mth - per subscriber - before granting Yahoo the consent to sell subscriptions allowing your UK fans to "own", in some form, your tunes.

Needless to say, Yahoo won't entertain rolling-out their service to the UK, believing few, if any, of your fans would actually fork-out that amount... and who can blame them?!

So who loses out here? Everyone it seems (UK is a large market you can't really ignore even if you are an artist in the States... and would you even want to in this shrinking internet world?)!

So what will UK fans do? The very thing the industry is trying to prevent... and I don't need to spell-out what that is do I!

Yahoo's Goldberg is also calling for the music industry to wise-up and consider DRM as dead too.

He wants to allow your fans to buy unrestricted song files which they will, well, basically own outright, to do with as they please.

This, instead of the current situation where Yahoo - to my mind - is basically renting music to fans (no-pay, no-play!) unless they pay an additional fee (on top of subscription) to buy the additional Right to legally own your song and listen to it in whichever way they choose... However, the songs won't play on iPods or other incompatible systems!

Ad-Supported Free Music?

"Coca Cola proudly sponsors [Your Name Here]"

I've not seen this (yet), but I believe Yahoo Music is doing it (and most probably others too) plus, the subject has certainly been raised a few times to know that ad-supported music - which essentially pays your label, for your fans to listen to your music - is a serious option on the table. You only have to look to the success of Google's revenue-sharing ad-networks (which pay webmasters a share of the advertiser's spend) to witness how attractive, and workable this might prove to be... If you, as a new artist, have a large enough fan-base to advertise to!

Whatever you may think of Yahoo's efforts, at least they seem to be trying different ideas out. It's a difficult situation requiring creative solutions - If you're wanting to support yourself as a professional artist that is... and you do, because the label ultimately wants the advance they loaned you back, plus (at some point), you would also like to show a profit for your own pocket, I daresay!

DRM vs Unrestricted Music

To further illustrate the risks of being tied to a confused record label today, consider the following latest financial facts... but before you do however, it's worth pointing out something else that Goldberg of Y! Music also revealed:

He said that if your fans are offered the choice of buying your music on an unrestricted licence, against buying a DRM licence at exactly the same price; unrestricted wins by a 100:1 ratio!

Well... who's surprised!

Hold on to that last "revelation" though - The latest following news will surely hit-home the true choices faced by your record label decision-makers... Choices about how to sell, and distribute your music, to your fans.

The question you might be left asking is: Does my label "get it"? Are they choking my growth?

What does my contract say again?