At last, music is the winner

http://www.smh.com.au/news/digital-music/at-last-music-is-the-winner/2007/04/18/1176696844562...#contentSwap1

EMI's bold new move to unlock its music to the digital masses is the
wildcard in the poker game of legal downloads.
There's an unlimited supply/And there is no reason why/I tell you it was all
a frame/They only did it 'cos of fame/Who?/EMI
EMI by the Sex Pistols
THE entire music establishment has practically detonated for real since
Johnny Rotten lobbed that parting grenade over the wall of Britain's most
distinguished music company, EMI, in 1977.
The "unlimited supply" of cash from those decadent glory days is now
slipping like ash through the fingers of the last four major music
conglomerates. Who'd have guessed that 30 years on, the label that dismissed
the Sex Pistols for their ratbag behaviour would out-punk them all?
EMI has been conspiring in anarchic circles of late. The venerable parent
company kept a low profile while its flagship renegades, the Beatles,
hatched their mysterious agreement with Apple Computers in February - with
specifics still to be announced.
Then, last week, chief executive Eric Nicoli moved into the media spotlight
after settling EMI's ancient, $72 million royalties dispute with the Fab
litigants.
Coincidence? Perhaps.
When Mr Nicoli and Apple boss Steve Jobs called their joint press conference
in London on April 2, many assumed that it was to announce the Beatles'
dramatically overdue debut on Apple's iTunes online music service (5 million
songs for sale, and still only the 10 solo stragglers by Ringo).
The news, as it happened, was much bigger.
From May 1, EMI is withdrawing its defences in the online war against
piracy. Beginning with iTunes, the company is "making all of its digital
repertoire available at a much higher sound quality than existing downloads
and free of digital rights management (DRM) restrictions".
It's nothing less than anarchy in the UK - and in every other country with
broadband access. The other three major music corporations (Universal,
SonyBMG and Warner) are likely to be livid at the audacity of those punks
over at EMI.
While some industry pundits are predicting a domino effect among the other
three majors, that's far from certain given the stubborn culture of
protectionism that has arguably been their undoing since they went to war
with the then-illegal music site Napster at the turn of the century.
Since then, the implementation of flawed and frustrating DRM locks has made
buying music online far less attractive than it should have been. In effect,
DRM penalises all MP3 fans as de facto criminals. The resulting antagonism
has probably exacerbated the piracy pandemic the majors are so desperate to
contain.
But EMI's unilateral surrender means that, for once, music is the winner.
Removing DRM encryption from the new "premium" song downloads means that the
Pink Floyd or Coldplay song you buy on iTunes is yours to keep and copy as
many times as you want to any digital device - not just the Apple iPod, as
currently dictated by the company's proprietary "FairPlay" DRM system.
And "much higher sound quality" means that audiophiles no longer need to be
insulted by the MP3-quality definition that has made online retail such a
poor option for discerning music fans. EMI's premium downloads will be
encoded at 256 kilobits of information per second, which is twice the
definition of standard online/MP3 fodder and comparable to CD fidelity.
On iTunes, and presumably the other services yet to negotiate with EMI,
premium downloads will come at a premium price. You can still buy regular
128 kbps/DRM downloads for $1.69 a track, but should you choose to pay $2.20
(or thereabouts - precise Australian pricing is yet to be announced), you
are offered better sound and greater interoperability, whether you fancy the
Rolling Stones, Norah Jones, Gorillaz, Kylie Minogue, Keith Urban, Robbie
Williams or a fat wad of other EMI acts. But not the Beatles. Not yet,
anyway, despite the recent settlements with Apple and EMI.
But wait, there's a steak-knives clause. Buy the whole album instead of
individual tracks and you will pay a regular price for the premium product.
That's a low, low $1.69, multiplied by the number of tracks on the album,
and every song is yours to keep at CD quality to copy for your own use ad
infinitum.
All we need now is an imaginative artwork delivery model and even
obstinately album-oriented holdouts such as Radiohead might be tempted to
start licensing their conspicuously absent masterpieces to online retailers
such as iTunes, Zune, emusic and the rest.
Of course, all of this is merely fair play (as opposed to FairPlay) to those
who liked the old system when records and CDs were engineered to exacting
hi-fi standards in the first place and were indisputably owned by the
purchaser upon sale and playable on any system forever and ever - until
someone trashed it at a party or stole it from your schoolbag.
But it's life-affirming news for the more paranoid among us who had begun to
envisage an Orwellian reality in which music would be compacted into muzak,
hardwired into our Telescreens, and only rented back for limited use if we
bought regulation equipment from the iMinistry - and then bought the same
equipment again when the battery died a few years later.
But the beneficiaries of that scenario would have been few. None of the
majors, for starters, have exactly been copping it sweet in the brave new
world of digital distribution. In Australia, online music sales registered a
four-fold increase last year but still account for only 5.5 per cent of
total music sales. And that total is in steep decline, perhaps due to piracy
or a wider variety of leisure activities such as computer games.
So who is Big Brother? Having sold 90 million iPods and 2 billion songs
through iTunes, it's clearly Apple boss Steve Jobs and Apple Computers who
have been snickering loudest behind the ubiquitous Telescreen.
It was therefore highly pertinent when, two months ago, Mr Jobs published an
eloquent online essay titled Thoughts on Music in which he made a compelling
case for the abolition of DRM in music retail.
Apple has taken some flak for its FairPlay DRM system and even weathered
charges of anti-competitive practices in Europe, but Mr Jobs took the
opportunity to remind his critics that it was the four music majors who
together "control the distribution of over 70 per cent of the world's music"
and who insisted on DRM locks before they would license their music to
online stores.
Naturally, no company will share its DRM secrets with another. Hence the
absurd situation in which tracks bought from Microsoft's Zune store play
only on Zune players, while the same tracks from Sony's Connect store play
only on Sony players, iTunes play only on iPods and so on.
"Imagine a world where every online store sells DRM-free music encoded in
open licensable formats," Mr Jobs suggested. "In such a world, any player
can play music purchased from any store, and any store can sell music that
is playable on all players. This is clearly the best alternative for
consumers, and Apple would embrace it in a heartbeat." He also provided a
good reason why the four major music companies should acquiesce: "Because
DRMs haven't worked, and may never work, to halt music piracy."
As Mr Jobs points out, last year the DRM-protected download market made up
only 10 per cent of all songs sold.
"So if the music companies are selling over 90 per cent of their music
DRM-free (on CDs), what benefits do they get from selling the remaining
small percentage of their music encumbered with a DRM system (legal
downloads)? There appear to be none."
Another way to look at this is to think about the average MP3 player. The
hard drives are usually full to bursting with music but only a tiny
percentage has been bought on legal download sites. The rest has been
pirated or ripped from CDs.
This is the prevailing state of lunacy that EMI has apparently now been the
first major label to acknowledge.
In truth, its radical new online strategy looks more like an act of
desperation than a progressive rethink of DRM. It's perhaps best understood
as a gallant attempt to kick-start the shiny new vehicle (online retail)
before the wheels fall off the terminally ill one (CD retail) while
hopefully closing the gap on its rivals in the same cavalier manoeuvre.
It's no secret that EMI has been hit particularly hard in these troubled
times. Since 2000, there have been recurring stories of proposed mergers and
takeover bids. Just last month Warner was in the news cited as a potential
buyer of the music giant. But as a vociferous believer in DRM, one can
safely assume Warner has lost interest in the acquisition.
Nonetheless, Mr Jobs is confident that EMI's provocative policy shift will
lead to more than half the total iTunes catalogue being DRM-free by the end
of this year. If he's right, the logic of market competition suggests that
within a year most music for sale online will sound as good as technically
possible, will be owned in perpetuity by those who pay for it and will be
easily copied illegally by those who don't.
Which would roughly take us back to where we were 30 years ago when music
came on vinyl, we stole it freely on cassette while the Sex Pistols were
still burning through a supposedly unlimited supply of record company cash.
That's progress, right?
Not really. But in a poker game that's been stacking up all wrong in recent
years, EMI's bold new premium downloads concept has thrown all the cards in
the air and made bets for the future of digital music anything but
predictable.
Whatever these EMI/iTunes punks have up their sleeves next, odds are high
that it will involve their four sequestered aces: John, Paul, George and
Ringo. Most pundits see a premium iTunes issue as inevitable, but that alone
would be small change for the greatest musical asset that ever roamed the
pop charts.
More compelling is widespread speculation about a dedicated Beatles iPod,
the world's first preloaded digital music device, which could marry musical
hardware and software in the most attractive and technically advanced
package since the compact disc.
There's certainly something suspiciously timely about these three goliaths
of modern music - the Beatles, Apple Computers and EMI - choosing to settle
decades of complex litigation just weeks before June 1: the gala 40th
anniversary of the most famous, popular and revolutionary album of all time,
Sgt. Pepper's Lonely Hearts Club Band.
Listen closely and you can almost hear Johnny Rotten's canny conspiracy
theory ringing through the ages: "I tell you it was all a frame." Maybe EMI
only did it, once again, for the media attention that has been so eminently
forthcoming.
Another dramatic press release is doubtless in the drafting stages. Right
now, the pop group, the computer company and the record company of the
moment are playing their collective cards close to their chests.

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"...like it or not, hornets were stirred, canned worms revealed, cats
de-bagged, boats rocked." - M. Carlton