[A2k] Napster goes DRM-Free...

Tue May 27 13:47:17 2008

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Plugged & Unplugged: Napster Goes DRM-Free
May 23, 2008 - Digital and Mobile <http://www.billboard.biz/bbbiz/industry/=
digital_mobile.jsp>

By Antony Bruno, Denver

Plugged:

By the end of this year, virtually every digital music service that sells d=
ownloadable music will have to do so without DRM in order to remain a relev=
ant competitor in the business.

The transition won't be easy. Each major label has its own agenda when ente=
ring into DRM-free licensing negotiations. EMI started the movement as a wa=
y to sell more files and work with more partners, starting with iTunes. UMG=
 uses DRM-free files as a way to empower iTunes competitors in an effort to=
 weaken Apple's negotiation position on several fronts. WMG is more interes=
ted in DRM-free licensing as a carrot to encourage partners to invest in th=
e technologies needed for its other strategies, like bundling. And Sony BMG=
 is angling to directly control sales by insisting on selling the files the=
mselves through an agent relationship <http://www.billboard.biz/bbbiz/conte=
nt_display/industry/e3i9b83c368b14067224aa1b57a4ccfdea3> . And of course al=
l of them want variable pricing.

This is why it takes so long to get such deals finalized. It's why Wal-Mart=
 is still one major label shy from completing its DRM-free catalog, and why=
 others are still in line waiting for their turn at the table.

So it is with that in mind that Napster deserves a lot of credit for naviga=
ting these waters and launching its DRM-free <http://www.billboard.biz/bbbi=
z/content_display/industry/e3i9189f73c48e7dd51e9a8af5824382c0a>  salvo with=
 all major labels onboard. But the launch is just step one, a prerequisite =
to join the real game-expanding the market for digital music.

DRM-free means the potential for more partnerships with brands looking to d=
o music-related promotions. (For instance, "Grand Theft Auto IV" developers=
 Rockstar Games made DRM-free files a condition of choosing which partner w=
ould facilitate the sale of in-game music).

It means Napster can now convert more subscribers to music purchasers as we=
ll (a Jupiter Research poll found more than 50% of current subscription use=
rs would buy more music if it were interoperable with other devices).

If Napster or any other DRM-free digital music service is going have a long=
-term future, it must continue to evolve, particularly once the DRM issue n=
o longer becomes the sole differentiator. They need to offer bundled produc=
ts that include things like video, lyrics and more in a single track downlo=
ad. The tracks need to double as make-your-own-ringtones. They need to incl=
ude opt-in messaging for more information on the artist's tour, notificatio=
ns on ticket sales, or links to buy merch and other related content.

WMG's Michael Nash perhaps says it best: "We look at MP3 licensing as a sho=
rt-term move to expand the field to digital music retailers. Over time, we =
don't think an unprotected individual file is going to grow our business in=
definitely."

So congrats on getting the door opened, Napster. What you do from here is t=
he hard part.

UnPlugged:

Once we're done patting Napster on the back for launching a DRM-free servic=
e, the time now comes to slap it in the face for its implementation.

Securing a formidable catalog of DRM-free music from the major labels is on=
ly half the effort. The Napster MP3 service needs a lot of work from an exe=
cution standpoint before it can stand a chance at making a difference.

For instance, from any given artist's profile on Napster, users have the ch=
oice of selecting a list of "tracks" or a list of "mp3s." Not sure why, unl=
ess some artists have tracks that are not yet available as MP3s for some re=
ason. I couldn't find any in my search, but it sure seems to make more sens=
e to just list them all under "tracks" and then show me what's available.

Another thing - tracks are listed with two buttons,":30" to stream a 30-sec=
ond sample, and then "MP3" which replaces what normally would just say "buy=
." What happens to all those people out there who don't know what the heck =
MP3 is? Granted they're not a majority, but still...

The point is, branding MP3 as a separate tab or sales button ignores the br=
oader reality that selling in unprotected MP3s (or even AAC files) isn't by=
 itself the point. It's not an end, it's a beginning.

It's the beginning of an interoperable ecosystem of digital music where all=
 music works with all devices. It's the beginning of reducing customer conf=
usion and increasing ease of use.

Relying too heavily on the MP3 moniker is a roadbump in the way of that mom=
entum, one I expect will be flattened soon enough. Because the larger issue=
 here is sales - increasing sales. Empowering more digital music services n=
ot to act as an "iTunes Killer," but to nurture a fledgling digital music m=
arket that needs more services to attract more users to the fold.

The clich=E9 that DRM stands for "doesn't really matter" holds true, so bra=
nding tracks as "MP3" is a bit too much insider for the mass consumer marke=
t. It's like wireless operators branding their content services "BREW downl=
oads" based on the technology used to deliver it.

HOW the music is interoperable doesn't matter. The fact that it is interope=
rable is the message.

Anne-Catherine Lorrain

Intellectual Property Policy Expert

TransAtlantic Consumer Dialogue (TACD)
Avenue de Tervueren, 36 Bte 4
1040 Bruxelles

Mob (Belgium): +32 473 99 97 92

Cell (US): +1 202 390 6264
Tel: +32 2 740 28 17
Fax: +32 2 740 28 02
www.tacd.org <http://www.tacd.org/>