Music industry set to relax digital restrictions?

Written by Tim Smalley

January 2, 2007 | 16:15

Tags: #digital #downloads #drm #industry #ipod #itunes #labels #limewire #management #music #record #rights #strategy

Companies: #amazon #myspace #yahoo

2007 could be the year where the DRM wall finally crumbles because a number of major record labels are pushing for the right to sell unprotected digital downloads.

Bigwigs inside the industry believe that legal music downloads will actually decline in some cases throughout 2007. This will mean that those DRM-backing executives inside major record labels will no longer be able to point to growing digital music sales as proof that DRM actually works.

The revenue generated by digital music sales still doesn't offset the continuing decline in CD sales and flat first quarter sales could make alternatives to DRM much more attractive to those that believe in the digital restrictions currently used by iTunes et al.

Several giants, including Microsoft, have tried to compete with Apple's iTunes store - nobody has loosened Apple's stranglehold on the industry yet. Tactics have included competitors attempting to sell music that is incompatible with the music giant's incredibly popular iPod. Rather unsurprisingly, that tactic has been rather unsuccessful.

The industry needs competition in order to survive and one way around the problem is to open the market place up by removing DRM. That obviously won't please Apple because a large number of its digital music sales come off the back of its iPod sales, and vice versa. Reuters believes that there are five key players to watch out for over the course of the year, because they could collectively (or single handedly) play a part in the decline of DRM.

Amazon has obviously felt the squeeze on CD sales and is believed to be itching to get into the world of digital downloads. However, the online retailer hasn't entered the market yet, because it appears to be holding out for a DRM-free service. The clout behind Amazon could see it single-handedly force a DRM strategy shift on all fronts. In addition, LimeWire, MySpace, eMusic and Yahoo! Music are also currently testing DRM-free download services in some shape or form.

The collective power and influence behind the five companies could see a massive change in the current DRM strategies, but it is up to record label executives to force a much-needed change in direction. Do you believe we'll ever see the day when we can finally say goodbye to DRM for good?
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