Ian Rogers of Yahoo Music has a fascinating blog post containing a talk he gave to an audience of music industry folks. Basically, his point is that the user experiences provided by record labels and retailers are what's losing them massive opportunities in online sales. The gist of the presentation is nicely summed up in its title: “Convenience Wins, Hubris Loses, and Content vs. Context, a Presentation for Some Music Industry Friends.”
DRM is one major example he gives of customer inconvenience:
While running “New Media” at Grand Royal I released the first day/date digital/physical release with At The Drive-In's “Relationship of Command” . Thanks to EMI requirements (hi Ted! hi Melissa!) it was DRM'd WMA and we sold about 12 copies in the first month, probably all to journalists.
He notes that it's taken eight years from the early days of Napster and Gnutella for a major retailer (Amazon) to give customers what they want–DRM-free, compressed music.
Rogers goes on to criticize the subscription model of downloading:
When you compare the experiences on Yahoo! Music, the order of magnitude difference in opportunity shouldn't be a surprise: Want radio? No problem. Click play, get radio. Want video? Awesome. Click play, get video. Want a track on-demand? Oh have we got a deal for you! If you're on Windows XP or Vista, and you're in North America, just download this 20MB application, go through these seven install screens, reboot your computer, go through these five setup screens, these six credit card screens, give us $160 dollars and POW! Now you can hear that song you wanted to hear…if you're still with us. Yahoo! didn't want to go through all these steps. The licensing dictated it. It's a slippery slope from “a little control” to consumer unfriendliness and non-Web-scale products and services.
Implicit in all this is a pragmatic outlook that had been all too absent from the entertainment industry. When people start talking about removing DRM, invariably someone starts getting upset about enabling piracy. But the increasing trend towards DRM-free music shows that retailers and labels are getting the idea that complete control isn't the answer. Letting go of the data a little will actually improve sales and revenue, provided there are easy-to-use, legal alternatives to infringing downloads. After all, the system is all about artists having an incentive to create and even make a living from their work. Giving them limited control over the work (however tightly they want to hang on to that control) is just a means to that end. If tighter reins on content hurt sales and revenues, there's no practical reason to maintain those controls.