Digital music can be considered a product of information technology (IT). Thus, over the past year, this industry has experienced significant changes on all fronts, with legal issues standing out as the most prominent—similar to what has happened in the global IT sector.
Many of us may have received digital music players as gifts this Christmas—one of the trendy products that are essential at this time. However, few of us realize that these products are just the beginning of a much larger story…
The battle over digital music formats, along with the issue of illegal music downloading, remains the most pressing concern over the past year, despite the music industry taking some strong actions to curb it. The results are still open to debate.
For the recording industry, the struggle to convince users to pay for digital music ownership on their devices has not achieved any significant results. The battle continues…
For users and critics of the music industry’s transition to digital music, the fight to persuade them is a complex issue that cannot be traced back to a single “root cause.”
The Control Issue
2005 was truly a tumultuous year for the music industry. However, in some respects, there were noteworthy victories in the realm of copyright music business through file-sharing networks.
Yet, the recording industry faced a significant setback in addressing copyright infringement. This issue escalated further when Sony BMG’s XCP anti-piracy application on some CDs was found to employ techniques typically used in viruses, worms, and trojans to hide itself from detection on PCs.
Wayne Rosso, the director of music services at Mashboxx and former director of the Grokster file-sharing service, believes that the “negative” pressures and the forced retreat of Sony BMG’s XCP technology could signal the death knell for DRM (Digital Rights Management).
DRM is defined as any mechanism used on CDs or audio files to control how users utilize multimedia files. DRM comes in various forms and can limit how many times songs can be added to playlists, how many CDs can be burned, or what devices songs can be played on…
Rosso believes that 2006 will be a year when the recording industry successfully convinces users to embrace MP3 digital music.
Piracy Networks
Rosso argues that we must not only call for general action but also think about the root of the problem.
Mark Mulligan, a music analyst at Jupiter Research, agrees that the music industry should consider the idea of coexisting with free music if it wants to capture a segment of the next generation of music lovers before they turn to file-sharing systems.
“Grokster may be taking its final steps on its path, but the demand for online file-sharing networks remains substantial. This demand will not disappear overnight.”
According to Mr. Mulligan, 2006 will witness growth in piracy networks that function similarly to peer-to-peer file-sharing systems. However, the likelihood of detection and prosecution will be much more challenging.
2005 also saw some legal victories for the music industry against file-sharing networks. The most notable victory was the U.S. Supreme Court’s ruling that legal penalties could be applied to file-sharing networks. This ruling led to Grokster’s shutdown.
However, the Supreme Court’s ruling did not address the issue of illegal music downloading.
Mulligan believes the music industry must find a way to embrace file-sharing systems, possibly by creating free services… perhaps by reducing the quality of the music files, for example.
Weak Relationships
It is an evident fact that while the number of digital music listeners and devices is growing rapidly, digital music has not kept pace with this growth.
According to a recent survey by Napster, music lovers are struggling to “fill up” their digital music devices, as these devices are often only utilized up to 50% of their storage capacity derived from CDs.
“Retailers predicted that 2005 would be a bumper year for MP3 digital music sales, but our data shows the complete opposite,” said Leanne Sharman, the CEO of Napster.
The issue lies in the time-consuming process of extracting music from CDs. Napster is always focused on encouraging users to adopt subscription services that allow unlimited music downloads for a fixed monthly fee.
Mulligan predicts that in the coming years, subscription-based music services will thrive. MP3 will remain the primary format used to manage music collections.
“Digital music still has a loose relationship with digital music devices. It seems to be regarded merely as an additional feature.”
