Archive for the ‘DRM’ Category


Interview: Jay Adelson, chief executive of Digg

January 7, 2008


Media companies will have to abandon their efforts to prevent digital music from being copied and concentrate instead on tracking a song’s path around the internet, the head of the one of the world’s most popular Web 2.0 sites has said.

The chief executive of Digg, which created controversy earlier this year when users published a code that unlocked digital rights management (DRM) software designed to prevent illicit copying, said that media companies had to change the way they policed intellectual property.

If record companies focus on finding a way to measure how many times a song had been listened to on the web, using what is known as watermark technology, they will have a better chance of accurately estimating advertising revenues, which will underpin the new business model for the record industry, Jay Adelson said.

“What social networks show is that people control the information,” he said, referring to an incident in May, when users of Digg, who recommend and vote on stories they like on the web, posted the key to a piece of software which prevented HD-DVD movie files from being copied.

When the site attempted to take down the links, other users reposted them, to the point where the site’s administrators gave up trying to stop the activity, and let the links stand.

“There’s an inertia there that is almost impossible to stop,” Mr Adelson told Times Online. “What it means is that DRM has to change its scope and purpose. It has to stop being a system that prevents distribution.”

Asked what should replace the current method, he suggested that a piece of software could be embedded into a digital file and log how many times the file is downloaded or streamed over the internet. That information could in turn can be used to determine advertising rates.

“For the majority of people, it means DRM as they know it disappears, but in truth what’s happening is the content is being monetised in a different way. All the media executives will tell you that their strategy is moving in the direction of being able to monetise content without DRM.”

Some labels, including EMI, have experimented with making their music available without copy protection, but attempts by the industry to embrace the internet as a means of distributing digital music have failed to prevent the decline in CD sales, which have fallen by 23 per cent since 2000, largely because of piracy.

In a wide-ranging interview with Times Online, Mr Adelson dismissed persistent reports that Digg, which he helped to found four years ago, was to be put up for sale, and said that the site was on target to be profitable.

The most recent rumour, on the site Venturebeat, said the site has hired the investment firm Allen & Company to attract offers in the vicinity of $300 million.

Mr Adelson said that Digg’s revenues were good and that the site, which has raised $10 million from a range of venture partners, including Greylock, would not need more money before turning a profit, but declined to say when that would be.

Digg – which ranks stories based on how popular they are with users – was “100 per cent focused” on releasing new features, he said, including a much anticipated image feature, which will let people vote on photos and other images.

Under a deal announced early last year, Microsoft will serve all the adverts on Digg, meaning that the site’s staff – which will grow from 35 to about 40 over the next year, can focus on software development.

Asked about how other web 2.0 sites could compete with the likes of Facebook and MySpace, Mr Adelson said that he thought there was room for new networking sites to emerge, but that in order to gain a foothold, they would have to offer a very specific service, as LinkedIn had with its focus on professional workers.

In addition, he said, there was scope for sites which took a syndicated approach, like Digg, and used other sites as a way of “extending their own database and value.” (In Digg’s case, this means placing their own ‘buttons’ on other websites, so that visitors to such sites could vote for stories they found there, which in turn fed back in to the main Digg page.)

“That really is the Web 2.0 thing,” he says. It really is a buzzword that gets thrown around too often, but what’s revolutionary at the moment is that you have this collaboration beyond a single location. It’s the use of collective wisdom to affect ranking and value.”

Digg, which Mr Adelson founded with his friend, Kevin Rose, in 2003, had 6.1 million unique visitors in October, an increase of 109 per cent on a year ago. In the UK it had just over a half a million visitors – an increase of 82 per cent.

Mr Adelson was previously chief technology officer at Equinix, an internet exchange he helped found that routes web traffic.

By Jonathan Richards in Timesonline


Sony BMG Plans to Drop DRM

January 4, 2008


In a move that would mark the end of a digital music era, Sony BMG Music Entertainment is finalizing plans to sell songs without the copyright protection software that has long restricted the use of music downloaded from the Internet, has learned. Sony BMG, a joint venture of Sony (SNE) and Bertelsmann, will make at least part of its collection available without so-called digital rights management, or DRM, software some time in the first quarter, according to people familiar with the matter.

Sony BMG would become the last of the top four music labels to drop DRM, following Warner Music Group (WMG), which in late December said it would sell DRM-free songs through’s (AMZN) digital music store. EMI and Vivendi’s Universal Music Group announced their plans for DRM-free downloads earlier in 2007.

Getting Hip to the Internet
The impetus to lift copyright protection represents a sea change for the recording industry, which for the better part of a decade has used DRM to guard against what it considers illegal distribution and duplication of songs purchased online. In abandoning DRM on à la carte song purchases, the labels could create a raft of new, less restrictive ways of selling music over the Internet, such as through social networks like Facebook and News Corp.’s (NWS) MySpace. Partnerships with retailers such as Amazon could also help the music industry take a swipe at Apple (AAPL), which has come to dominate the legal download market through a one-size-fits-all pricing scheme record labels find restrictive.

Details of Sony BMG’s plans are expected to emerge in the coming weeks. Justin Timberlake, the popular recording artist signed to the Sony-owned Jive label, is participating in a Super Bowl promotion with Pepsi (PEP) that will kick off Feb. 3 and offer free distribution of 1 billion songs from major labels, including Sony BMG, through Amazon’s DRM-free download service, according to a person familiar with the matter. Sony has been experimenting with DRM-free songs for about six months. The company began giving away DRM-free promotional downloads for recording artists that sell less than 100,000 units, and at least one artist gained mainstream exposure through the effort. “A lot of these tests have led people to believe that maybe this works,” says a Sony BMG executive who asked not to be identified. A Sony BMG spokesman declined to comment. Amazon also declined to comment on its DRM-free deals, beyond what it has disclosed in press releases.

The move by Sony BMG is especially noteworthy, given the company’s checkered DRM past. In 2005, Sony BMG incited a consumer boycott and was the target of lawsuits after it embedded CDs with a form of DRM that was surreptitiously copied to and buried in users’ PCs (, 11/29/05), leaving the machines vulnerable to viruses.

Abandoning an Outmoded Idea
Many, including music executives, consider the industry’s about-face long overdue. “This agreement is the first of many of these types we’ll be announcing in the coming weeks and months,” Warner Music Group Chief Executive Edgar Bronfman Jr. wrote in a Dec. 27 memo to employees explaining Warner’s breakthrough deal with Amazon. “Many have argued that we could and should have done this long ago.”

Labels used DRM software in an effort to prevent illegal sharing of songs on peer-to-peer networks, such as Gnutella. Instead, the restrictions served mainly to frustrate paying customers, forcing them to degrade the quality of music by first burning it to a CD before uploading it for play on the device of their choosing. Last year, consumers filed several class actions against the major record labels (, 1/5/07) and, in a couple cases, against Apple, for restricting the devices and thereby controlling prices.

“DRM tends to punish the innocent more than the guilty,” says Rob Enderle, principal analyst at the Enderle Group, a technology research company. “It was hurting folks who were trying to follow the rules more than the folks who were pirating the music.”

Dancing to Apple’s Tune
Worse for the labels, the restrictions ultimately resulted in less control over the paid download industry. Because DRM tended to tie consumers to the store most compatible with their music device, the record labels unwittingly gave much of the power over music distribution to Apple, the manufacturer of the most popular digital music player, the iPod. Music industry executives say Apple has not wielded that power lightly. With control of an estimated 80% of the market for legally downloaded music, Apple pushed its preferred price of 99¢ per song over the opposition of several labels (, 9/25/05), which preferred variable pricing that would allow some artists to sell at a premium.

Apple CEO Steve Jobs also refused repeated requests from the recording industry and iPod competitors to license its DRM technology so that iTunes customers could easily put their music on other devices, without first burning it to a CD or otherwise altering the files. In a Feb. 6, 2007, letter titled “Thoughts on Music,” Jobs maintained that licensing its DRM technology to many providers would make it too difficult to keep its antipiracy code under wraps: “Licensing a DRM involves disclosing some of its secrets to many people in many companies, and history tells us that inevitably these secrets will leak.”

Jobs used the letter to pressure the music labels (, 2/6/07) to abandon their own use of copyright protection technology. “In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players,” Jobs wrote. “This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat.” The public shaming helped Apple take the moral high ground at a time when it was under pressure from European regulators to open its DRM to let iTunes customers download their music to non-Apple devices. With his letter, Jobs pointed the finger at the labels for supporting DRM, silently suggesting the wrath of consumers and antitrust authorities should lie with them. Within two months, EMI, one of the smaller of the big four labels, offered to sell higher-quality, DRM-free tracks through iTunes for a 30¢ premium. By Oct. 17 the tracks were selling for 99¢.

A Play for an iTunes Competitor
DRM is by no means dead. Music subscription services such as RealNetwork’s (RNWK) Rhapsody and ad-supported services like Ruckus (, 1/22/07) will continue to use DRM to ensure music stops playing when a subscription ends. But these services represent only a small segment of the market. “There won’t be any DRM of significance by the end of 2008,” says David Pakman, president and CEO of DRM-free music download service eMusic, the second-largest service after iTunes. “The only time you will see it used is for rental services.”

Rather than following EMI’s lead, other labels are hoping to create another Apple competitor in Amazon, which is willing to give the recording industry greater pricing flexibility. “That was a big part of it—countering Apple’s control in a positive way by creating more able competitors,” says Mike McGuire, a vice-president for research at Gartner (IT).

Narrowing Apple’s lead won’t be easy. Just ask Microsoft (MSFT), which has made meager headway with its Zune music player and online music store. Still, no service has yet been able to offer DRM-free music downloads from all four major labels. Amazon could yet become a contender.

With Tom Lowry and Spencer Ante in New York.
Holahan is a writer for in New York.

Sir Paul McCartney: ‘I Also Downloaded Radiohead’s ‘In Rainbows”

December 26, 2007


British rock legend Sir Paul McCartney criticized his former record label EMI for its “boring” approach, and accused it of taking him for granted in an interview with the UK’s “The Times.”

Sir McCartney said he also became frustrated with the amount of time it took for EMI to release a song – while he wanted them released within weeks, record label executives expected to take months.

“I’d started saying to them: ‘Look, we could write a thing and have it released the next week.’ And they would say: ‘You can’t do that these days.’ So I would say: ‘Well, how much time do you need?’ And they’d say six months. I said: ‘Why do you need that long?’ And do you know what they said? ‘To figure out how to market it.’ I said: ‘Wait a minute, are you sure you need six months for that? Couldn’t some bright people do that in two days?’ Jesus Christ. I said: ‘Look boys, I’m sorry, I’m digging a new furrow.”

He also noted that he too was one of the millions who downloaded Radiohead’s “In Rainbows,” paying “something reasonable.”

“This was how we used to operate,” he noted. “I remember John [Lennon], for instance, writing Instant Karma and demanding it was released the following week.”

EMI, on the other hand, wasn’t able to perform such a “miraculous” task and he lamented that music artists there “had become a part of the furniture.”

“I’d be a couch; Coldplay are an armchair. And Robbie Williams, I dread to think what he was … But the most important thing was, I’d felt (the people at EMI) had become really very boring, y’know? And I dreaded going to see them.”

Asked what he meant by accusing the record company of being “boring”, Sir McCartney responded: “Well, because I could guess what they were going to say.” He added that he became frustrated with what he described as the “treadmill” approach of the company when it came to marketing music. “You go somewhere, speak to a million journalists for one day, and you get all the same questions. It’s mind-numbing.

“So I started saying: ‘God, we’ve got to do something else’.” McCartney split with EMI earlier this year, and released his latest album Memory Almost Full with coffee giant Starbucks’s newly-launched Hear Music label.

Now I can only imagine what it was like when EMI execs would meet with Sir McCartney, but you’d think that they’d give him carte blanche to do as he pleases. I think as a former Beatle, and as a music artist in every sense of the word, he’s at least earned that courtesy. When a guy like Sir McCartney says “Well this is what John and I used to do,” and “John” is the John of all Johns besides that baptist fella, it’s probably safe to bet that his plan will work out just fine.

I mean honestly, 6 months to market what he can do in 6 hours? No wonder the music biz is falling apart.

What’s also telling about Sir McCartney is that he really is all about the music. Always has and always will. Unlike Prince and others who seem to try and sue any website that allows fans to hear their music unless they benefit financially, he has own official YouTube channel. Sure he can afford it, but can’t Prince?

in ZeroPaid


EMI confirms good results in DRM-free music sales

June 20, 2007


EMI’s recently-appointed senior vice president of digital Lauren Berkowitz has confirmed significant success with the company’s move to sell DRM-free tracks through iTunes.

Speaking at a US music industry event, Berkowitz confirmed: “The initial results of DRM-free music are good.”
EMI began selling its music in high-quality DRM-free format last month. It’s unrestricted catalogue is now available for sale from 7Digital and Apple’s iTunes. In future, EMI will sell DRM-free music through Amazon and PassAlong Networks.

Berkowitz said that initial success with DRM-free songs seems set to boost sales of digital albums, as well as songs. She confirmed that sales of the legendary Pink Floyd album, Dark Side of the Moon had increased since it shipped DRM-free – these are up 350 per cent.

The other three major labels: Universal, Warner and Sony/BMG are reportedly studying the results of EMI’s experiement closely. Those labels still favour rights-restriction in an attempt to protect their content, but market pressure may force them to emulate EMI and join Apple’s iTunes Plus service.

Labels in the independent sector have been cheerfully embracing DRM-free music for many years now, and claim their strategy has been successful.

in:  Macworld


Weblog starts anti-DRM T-shirt contest

June 8, 2007

TorrentFreak, a blog dedicated to filesharing protocols, has just started a new T-Shirt contest – but a very peculiar one indeed.

Openly standing against Digital Right Management (DRM), the weblog has decided to take actions further by creating a contest on campaign slogans against this kind of music protection.

They received the desings which had to carry a slogan speaking up against the DRM protection major record companies use in their attempt to stop people sharing music on the internet. And now, the T-shirts’ designs are available for voting by the general public throughout this week.

You can still go to the TorrentFreak site and vote. The winners will be announced this weekend.

The site also states that “If you can’t wait, feel free to copy these images, and print your own T-shirt!” That’s what sharing is all about, hei? 😉


Personal Data Hidden in iTunes Tracks

June 4, 2007


Fresh privacy fears have been sparked after it emerged that Apple has embedded personal information into music files bought from its iTunes online music store.

Technology Web sites examining iTunes products discovered that personal data, including the name and e-mail addresses of purchasers, are embedded into the AAC files that Apple uses to distribute music tracks.

The information is also included in tracks sold under Apple’s iTunes Plus system, launched this week, where users pay a premium for music that is free from the controversial digital rights management (DRM) software that is designed to safeguard against piracy.

The Electronic Frontier Foundation, an online consumer rights group, added that it had identified a large amount of additional unaccounted-for information in iTunes files.

It said it was possible that the data could be used to “watermark” tracks so that the original purchaser could be tracked down were a track to appear on a file-sharing network.

Ars Technica, among the first Web sites to unveil the hidden information, said: “Everyone should be aware that while DRM-free files may lift a lot of restrictions on our personal usage habits, it doesn’t mean that we can just start sharing the love, so to speak. Sharer beware.”


The battle over music piracy

May 25, 2007

time_article.jpg, in partnership with CNN, has published an interesting article about the cultural aspects of music piracy. Lev Grossman has taken the recent news of entering the MP3 market and raised some fair questions about why it might be a success in Time’s Technoculture section.

Learning to love your inner pirate

When announced its plan to open a digital music store to sell MP3s, you had to really work to get excited about it. It’s hard to think of a press release that would be less surprising. At this rate, my 3-year-old daughter will be opening a digital music store pretty soon. And Amazon’s selling MP3s? It’s a digital music store. What else would it sell?

But Amazon’s move was actually a strategic salvo in the great secret war of the $60 billion music industry, the fight over Digital Rights Management, usually known by the spine-tinglingly thrilling abbreviation DRM. What’s DRM? An invisible layer of software that bodyguards a computer file and limits what you can and can’t do with it. Buy a song from Apple’s iTunes Media Store, for example, and you can copy the file to five computers but no more. That’s because the song comes with Apple’s DRM software, FairPlay, baked in, and FairPlay has its own ideas about what is and isn’t fair. Most people don’t even notice DRM–who puts their music on five different computers anyway?–but there’s something annoyingly unfair about FairPlay even in the abstract. You paid for the music. Who is Apple to tell you where you can and can’t stick it?

Nobody will admit to actually liking DRM. Consumers feel retailers are treating them like potential copyright criminals. Retailers say they use DRM only because the labels make them. The labels blame us, the customers, for being such filthy music pirates. And around we go. Steve Jobs even swore that he would de-DRM every track on iTunes if only the labels would let him. (Jobs did broker a deal with one label, EMI, to sell DRM-free music, with higher audio quality. But it’ll cost ya: DRM-free tracks will go for $1.29 vs. the standard 99¢.) Amazon is saying it’s prepared to go skinny-dipping in the digital music pool: the company will sell all-nude, plain-vanilla MP3 files stripped of any DRM.

This won’t make Amazon the iTunes killer. There’s no way Amazon will match the silky-smooth user experience of the iTunes store–I mean, interface design and hardware integration are what Apple does–or the depth of its song selection. DRM-free music is a nice perk, and the freedom-loving anti-copyright geekerati will be all over it, but there are more important things in life. And Amazon doesn’t need to kill iTunes anyway. Amazon’s music store will be a handy tool for setting up package deals and promotional giveaways and such, but that’s all it has to be: a loss leader, not a world beater.

But all this does bring into stark relief a basic question that haunts the music industry: Can consumers be trusted to control their own music without pirating the record labels and the artists they produce right into the ground? The answer is yes. People have been buying and selling music for years without DRM, in a form you may have heard of called the compact disc. CDs have never had DRM attached. Off the record, most executives–on the technology side at least–will tell you that DRM is a dinosaur that’s waiting for the asteroid to hit. It’s just a matter of when the music industry will stop assuming its customers are all criminals.

To be clear: most of us really are criminals. Almost everybody owns a little stolen music. But a little piracy can be a good thing. Sure, O.K., I ripped the audio of the Shins’ Phantom Limb off a YouTube video. But on the strength of that minor copyright atrocity, I legally bought two complete Shins albums and shelled out for a Shins concert. The legit market feeds off the black market. Music execs just need to figure out how to live with that. (And count themselves lucky. When it comes to movies, consumers actually do act like hardened criminals. The real pirate war is being fought in Hollywood.)

In the end, the real consequences of DRM may have nothing to do with piracy. One side effect of Apple’s FairPlay software is that music purchased on iTunes plays only on Apple products–i.e., on iPods. The result is that DRM helps perpetuate Apple’s quasi-monopoly in the portable digital-music-player market, which ironically has a slightly Microsoftesque air about it. (The European Union is looking into an antitrust suit.) If–meaning when–Apple drops DRM for good, the playing field on the hardware side will get a whole lot more level and the iPod will have a whole lot more serious competition. Zunes, Sansas and other exotic digital fauna will all be able to play songs from iTunes. Turnabout, as the saying goes, is fair play.

in: Time