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Removing DRM Will Double Or Triple The Size Of The Music Download Business
By Mi2N
(more articles from this author)
2007-03-30
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Bob Kohn, CEO of RoyaltyShare, weighs in on what this means for the industry:

"Removing DRM eliminates one of the great impediments to the growth of the digital download business, which is the incompatibility of files purchased on iTunes with non iTunes-compatible music players.

"The most significant factor to consider with this announcement is how the move away from DRM restricted files on iTunes will allow for increased competition among the other audio player manufacturers and online retailers such as Napster, MusicMatch and Rhapsody, who now will be able to compete with Apple/ ITunes on equal footing. Ironically, this announcement signifies the end of the iTunes dominated digital music market.

"When consumers can buy a track on any download music store and use it on any kind of music player, it will allow them to trust the files they buy will work on any device they may select to listen to them on.

"By the same token, it's important that consumers don't get the wrong message-they cannot do anything they wish with the non-DRM music file. Once downloaded, the consumer can burn copies to CDs and transfer them to portable music players, but they cannot legally "share" them with their friends or post or send them out on the Internet, even if the file does not have DRM to technically prevent them from doing so.

"With respect to the upgrade feature, allowing the consumer to purchase a non-DRM version for the difference in price between the DRM and non-DRM version, has an analogy in the computer software business, where consumers are accustomed to getting a discount to upgrade to a different version. It's a very consumer-friendly practice, and it's good that the music-industry appears to be welcoming the model.

"One legal issue that arises from the upgrade program is how this will affect the calculation of royalties payable to artists and music publishers on the upgrade purchase. The answer is complex; I'd be glad to discuss it further, and it would be interesting to know EMI's take on the issue."

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