Online Media Cultist

DRM, Digital Rights Management, is a technical means of restricting the use of media. In other words, it can control how many times an MP3 can be played, for example, or how many devices it can be played on, how many times it can be downloaded, and so on.

This was thought to be a great way for music labels to distribute music online while protecting their intellectual property. The problem is that people don’t like DRM, and many hate it. When you purchase a CD, your expectation is that you can play it at home, in the car, at the office, and while on the exercise bike at the gym. People therefore expect to be able to do whatever they want with a legally purchased MP3.

And the reality of course is that music labels are hemorrhaging cash anyway. Steve Jobs, Apple’s CEO, opened the floodgates to lifting DRM restrictions in a well written essay several months back that urged the labels to allow music to be sold on iTunes DRM-free.

Now we’re starting to see some major changes in the works. Wal-Mart, one of the biggest brick-and-mortar sellers of music, announced that it had signed on with a bunch of labels to offer DRM-free music for purchase online.

Meanwhile, start-up gBox is looking to tap into the new DRM-free wave by offering a service that lets people create wish lists and purchase DRM-free MP3s for friends.

Beyond music purchase, streaming services – both free and paid – are now plentiful. The thinking here is that people don’t really need to “own” music anymore if they can access whatever they want whenever they want it, and from wherever. Rhapsody, which has been around for quite a while, has hooked up with Viacom (and MTV, which it owns) in an effort to penetrate a larger share of this growing market.

And services like Anywhere.fm are creating ways to access your iTunes library from anyplace with an Internet connection.

GigaOM notes that EMI Music and Universal Music Group are already offering DRM-free music, and that “When it comes to DRM free music — that is, music not encumbered by copyright restrictions — the pitchers are still throwing their warm-up pitches.” And Techdirt rightly points out that people can care less what label music is released through – they just want what they want, and will flock to wherever that need can be best met.

Personally, I’m old school and like the feeling of “owning” my music. However, I believe the future of online music will be for the most part free, streaming, and advertising-supported. Think about a service that allows you instantly access any song you want in the known universe from wherever you want, whenever you want. Maybe the basic service is free with some relatively unobtrusive ads, and a paid subscription layer that lets you download a set number of songs (DRM-free, of course!) each month, create favorite lists, advanced social networking features, and so on.

I think that’s where things are headed, and we’re just at the very beginning of this process.

Maybe record labels are finally starting to get it. Well, they have to start getting it pretty soon, because there’s nothing like the prospect of extinction to get those innovation-juices flowing.

The latest indication that record labels are starting to meet the demands of today’s marketplace is Amazon’s announcement that it is launching a digital music store later this year that will sell millions of songs from more than 12,000 record labels, all DRM-free.

DRM, or Digital Rights Management, refers to technology that restricts the use of purchased digital content. In English that means that when you purchase an MP3 with DRM attached to it, you don’t actually own the music, you just have some right to use it. So DRM could restrict you from burning an MP3 that you purchased to CD, for example, or downloading it more than once.

So going DRM-free lifts all of these restrictions, including one that annoys many music lovers: restricting playback to one type of music device. Apple, a company that is often accused of imposing too many restrictions on its users, opened the door to a new era of DRM-free digital content when CEO Steve Jobs issued a passionate and intelligent analysis called “Thoughts on Music” back in February.

The key, of course, is getting major record labels to agree to DRM-free and it looks like that is finally beginning to happen. EMI, for one, is willing to sell DRM-free music at a “premium price” of $1.29 per song versus the standard $.99 that iTunes songs usually go for. The higher pricing, in my view, is somewhat irrelevant as prices will be adjusted to meet market demand. EMI is also signed on with Amazon’s new venture.

David Card notes that Amazon is in a solid position to compete with major digital music stores: “Amazon’s a master of upselling, and has zero customer acquisition costs. It should do just as well as any other store, likely better.” And hypebot notes “exclusively” that while it was announced that the new Amazon store is slated to launch later this year, that Amazon is pushing to get it rolled as early as this summer.