Hi all,

I am surprised that this thread has pointed so strongly toward the price hike and quality as being risky.
Please let me be concise with some of the facts....
Steve Jobs noted that about 3% of music on all iPods is copied from CD...... CD that is already non-DRM and sold by the major record labels. In the penultimate two years, the biggest selling albums have sold about 10 million copies each worldwide, down to 6 million in 2006. Seeing that probably over a hundred different albums are released per month in the UK and US, the chance of a new recording being successful enough to make the charts in future is pretty slim on CD sales alone..... if you look at the amount of new artists in the UK chart during any one year, I would be surprised if there were a crossover of upwards of ten percent in to the mainstream.

With this in mind, the major record labels are making pretty large investments in new product, which is cross collateralised from profit on their own successful artists. If one looks at the piracy issue, the biggest "loss" was through illegal copying of CD by industrial duplicators. The RIAA and others could average their losses by looking at the illegal manufacturing, in the physical sense. They then put their stall out by going after "high profile" sharers..... mostly youngsters, as a way of changing public opinion..... as well as trying to stop the real pirates with criminal legal action. The relationship between the Majors and its public has been fraught for a long time, in my opinion since W.H.Smith was included in to the fold of record shops only selling what the Majors wanted them to, back in the late eighties when it was all about a monopoly on physical distribution. The top five lost much of their customer loyalty and as such the internet, and copying, was the perfect reply. From way back then, EMI was parodied as "Every Mistake Imaginable" within the recording world..... which if you look at some of their failures was pretty true. I think that Steve Jobs has defined a market and it has taken a lot of persuasion to get the Majors involved....... illegal file sharing will be eventually seen for what it was all along, a smokescreen covering the fact that the major record companies completely lost the plot at the beginning of the nineties. Now they have evidence to support legal downloading as a relevant revenue source. There is still a huge market for high quality music and recordings, with sample rates better than CD on the horizon.... this is hopefully the beginning of that new market. With almost 0% manufacturing and distribution costs in comparison to a physical CD, they will surely make more money, not less, and EMI's share price will hopefully reflect the u-turn in policy. For my ten pence, I would rather pay for a proper legal product than any of the crunched mp3 files that I have heard. In future I would even pay double the present license fee to watch BBC TV on my laptop worldwide through the net..... and I hope to, eventually. One of the most exciting parts of all of this entertainment is the growth and realtime connection within society as a result of TV schedules, tours, and album releases..... across the board perhaps that has a value that is lost when the control of the distribution of ideas is lost, as has been seen due to concentrating on negative issues instead of the positives.

Remember that Thriller sold 40 million copies in its first chart run......... and for all the losses, CD sales haven't done too badly, still, it is time for a change.


Download sales increased by 65% in 2006, but in the UK digital albums are still only 1.4% of the overall album market. In the singles market, where all this is being promoted, 79% of the 65.1 million sales in 2006 were from legal downloads. A quite astounding statistic is that CD sales, for many reasons, fell by 20% in the US in the first quarter of this year compared to last..... perhaps CD has finally had its day .... and now we can begin to enjoy larger files with better quality. Blueray at 96Khz with DTS for example, but then who wants a physical copy?

On the other hand, perhaps Apple and EMI are crazy......... the evidence would suggest that they both have far to go forward, and at least they are willing to give it a go. At £15 an album, if the quality is good and the product is free of DRM, then I will certainly buy it. I hope that they achieve the success that the artists need in promoting their products, in a way that sounds as good as possible.

On 3 Apr 2007, at 13:15, Dave Crossland wrote:

Hi Jason!
On 03/04/07, Jason Cartwright <[EMAIL PROTECTED]> wrote:> Yes, of course. However, I said "more people put the unDRMed file on the> torrents". The file without DRM will be easier to distribute, therefore> perhaps more people will. The point about this Apple/EMI deal is that they have costed out the"cost" of non-DRM. This is very significant, and something MilesMetcalfe suggested in the DRM Podcast. Since there's no transcript, here's my understanding of what Miles was on about: The BBC was in a unique position to be the first to challengeentertainment businesses on their assumption that they cannot makemoney without DRM. How? Calling their bluff by asking to cost it out, and negotiate overreal figures. Apple/EMI have beat them to it, but as Tom Loosemore said at the startof the DRM podcast, the BBC dropped the ball on strategic future mediavision some time ago. In a capitalist system, everything has a price, even intangibles. Sowhat is the precise figure of the risk that non-DRM formats poses toproducers? Specifically, at what price would they sell the BBC therights to publish online in non-DRM formats? It makes sense for the BBC to offer non-DRM formats because it ispublicly funded, and restricting the public isn't good. It makes sensefor the BBC to seriously ask how much this would cost, because it ispublicly funded and can actually pay a reasonable premium for suchnon-DRM rights. So far, this has not been discussed anywhere openly. All we have fromApple/EMI's no-DRM publishing is a 130% price, and a higher bitrate. The higher bitrate is a misdirection, as someone else already said inthis thread.
The price is still significant, though.
The BBC is paying rightholders to be able to publish things in the DRMiPlayer, they could pay them 130% of that cost and have no DRM. Soundslike that hundreds-of-thousands budget figure bandied about to develop"Open Trust Model DRM" or whatever it was, could be better spent onthese 30%s. Prices are ultimately set by what the market can bear, and whenproducers have talked about the price of non-DRM content before, namedvast sums that the market simply would not bear. The BBC needs to beprepared to call their bluff on this. If I can buy a DVD of a wholeseries for £20, watch any episode as many times as I like, convert anyep to a format that will play on my iPod, and even share duplicatecopies of the discs with my friends using software that comes with theoperating system, then something like £5 per showing per person isclearly a nonsense figure that the market simply won't bear. The thing about putting it into numbers is that they can be tested. £5per showing per person can be put to the test in the market, as anexperiment. If the public engages at this price point, amazing. Ifthey don't, either the price has to come down, or a better service hasto be provided. I'll be interested to see what happens to the 130% price, if it goes up or down. The other thing about putting it into numbers is that it examines theassumption that producers should be paid for things that haven'thappened yet. Performers are by their nature egotistical, and tend tooverestimate the size of their audience. The risk that they aresuccessful, and non-DRM files will hurt their income, must beconsidered next to the risk that they are unsuccessful, and they willhave no income at all. The other group who are influential in the BBCs use of DRM is the BBCTrust. For them to mandate DRM seems to be the tail wagging the dog.Surely the "public value test," that the trust is meant to evaluateBBC activities with, is failed by DRM, since DRM provides no value tothe public at all. Its possible that, despite this Apple/EMI deal, television productioncompanies will never take part in any non-DRM discussions. The BBC has said it is committed to new talent, though, so if thisreally turns out to be the case, the BBC can either become anelitist institution propping up the old established players,or make good on its commitment and start giving new talent theexposure that they need, on the new terms that they will no doubt becomfortable with. And pay them 30% more than the big boys!
-- Regards,Dave
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