Saturday, February 10, 2007

EMI Considers Embracing MP3s

Steve Jobs' plea from earlier this week for the music industry to dump the anti-piracy(distribution) measure DRM has at least one of the Big Four music labels listening.

Ars Technica reports that EMI is in talks with online music stores about moving to an all-MP3 format. Another possibility is that the label may start letting its artists sell their music on MySpace via SnoCap as MP3s.

If EMI does move to an all-MP3 format, it could be the first domino to fall, leading to the other major music labels to follow suit. The restrictive distribution of digital music has always been a marketing inconsistency that has plagued the digital music sector, and stunted growth. Music in digital form is very similar to a commodity, but the major labels are attempting to market it as if it were a luxury item, by tightly controlling distribution, and attempting to raise prices. As a result, music fans have migrated toward the services that gives them the ability to get their music as cheaply and as easily as possible. This is why Napster was so popular, and why iTunes is now the dominant player in the digital music sector.

On Wednesday, in response to Jobs' plea to end DRM, the RIAA shot back and said that the better solution would be for Apple to license its Fairplay DRM system that is attached to music sold through its iTunes music store, to ALL of Apple's competitors. This is consistent with the RIAA's previous moves of maintaining an iron-fist over how digital music is distributed. But as even Napster showed, the answer to expanding the digital music market is to open distribution, not restrict it.

Radiohead's Kid A album is the classic case-study for how exposing more people to an artists' music results in more sales. Radiohead had never enjoyed mainstream success prior to the release of Kid A. The album, which was slated for a Fall 2000 release, was leaked onto Napster several months in advance. As a result, the songs from the album were downloaded and talked about for several months leading up to Kid A's release, building enormous buzz for the band. Suddenly, an entirely new audience was exposed to Radiohead's music, and they loved it. Kid A debuted as the #1 selling album, according to Billboard. This was even though the band refused to release a single or make a video prior to the album's release.

This is not EMI's first foray into selling unprotected music. In December, EMI began selling tracks from some of its artists as MP3s, most notably Norah Jones. EMI spokesperson Jeanne Meyer said that "The results of those experiments were very positive, and the fan feedback has been very enthusiastic."

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J.D. said...

The walls come a-tumblin' down! I'm hoping this opens the floodgates for labels to spurn the DRM technology and open their communities up.

I particularly like what that one guy said...something to the effect of "DRM sends a message to the consumer that we don't trust you." BINGO. Hammer. Nail. Head. BAM. If you want a microcosm of why the music industry has faltered lately in sales, that's your quote right there. People don't want to buy stuff from their adversaries. I'm a huge Harry Potter fan. And yeah, I might download an e-book under the table, or look at a pre-release leak, but you can bet your sweet bippy I'll be buying the book the minute it hits the shelves. Now if J.K. Rowling sued me, that might be another fact, that might encourage me to participate in MORE piracy, just to hurt her back!

Oh, and as far as Viral Community news... dude, I'm engaged! :) Getting married May 26 :)

Mack Collier said...

Congrats dude!

Anonymous said...

You're consistently suggesting more innovative, community-oriented, grass-roots marketing tactics to the music industry and I'm surprised their slow on the uptake, if only because there are plenty of examples from the Grateful Dead to Dave Matthews to the Bare Naked Ladies to suggest that this open model, even letting listeners get music for free (!), actually works (though, truth be told, it is often a long-term investment).
On another note - I agree that the "leak" marketing of Kid A was an interesting and obviously successful, but wouldn't you consider the slow-building triumph of OK Computer "Mainstream success"? Not only album of the year when it came out, but now album of the latter part of the century?