Changes in Digital Music Spell Challenges and Opportunities

• By David W. Dodd
• 04/01/08

During recent months, the digital music industry has been changing in very tectonic — but very silent — ways. University campuses have long been hotbeds of file sharing, much of it legal and practical, but much of it also illegal. Illegal file sharing, much of it involving pirated music, has prompted significant responses from institutions. In some cases, this included preventing the use of file-sharing technologies over campus networks altogether. In other cases, institutions subscribed to services that provided students with the ability to play music legally on their computers, but not to retain it.

Meanwhile, the music industry, represented by the Recording Industry Association of America (RIAA), has filed numerous civil suits against individuals who were alleged to represent the most blatant infractions of illegal music sharing. Recently, federal legislation has been proposed that would make institutions responsible for policing file sharing on campus networks. For obvious reasons, higher education is vigorously fighting this legislation. Through all of this, changes have been silently occurring that could make some of these issues nearly moot. The subject of these changes has been digital rights management (DRM), or more precisely, the fact that it is disappearing.

DRM involves the use of embedded codes in digital media that are meant to protect the content from illegal copying, distribution, and unauthorized use. Equivalent technologies are used on movies, books, games, and other content. With the passage of the 1998 Digital Copyright Act, tampering with DRM protections became illegal.

However, there were two unintended, but easily anticipated, outcomes of DRM. First, music lovers came to loathe the restrictions imposed upon them, even in normal use. For example, in a well-publicized incident, Sony embedded DRM technology in digital media that, upon playing, transferred itself to computers, making them highly susceptible to viruses.

The second outcome was the inevitable breaking of DRM codes by enthusiastic hackers. Software emerged on the Internet which made defeating DRM a relatively simple task. The fact that media companies constantly reengineered DRM technologies made little difference. Hackers became so proficient that reports began to surface that DRM decoded music was appearing on illegal download sites without minutes of its official release by publishers.

Consumers lobbied against DRM, and companies like eMusic responded with DRM-free downloads. But large studios control the music industry, and they staunchly refused to budge. This meant that only a small portion of available music could be purchased without DRM, and very little by popular artists. Tensions grew, and CD sales fell. In late 2006, Bill Gates noted the failings and frustrations of DRM by saying it “causes too much pain for legitimate buyers” and that customers should “just buy a CD and rip it — you are legal then.” This was clearly not what the music industry wanted to hear, but it certainly set a new marker in the conflict.

As Apple was being subjected to heavy criticism for DRM restrictions concerning its iTunes/iPod exclusivity here and in Europe, Steve Jobs took the stage and threw down another gauntlet. In a letter published on the Apple website in February 2007, Jobs sought the high ground on DRM by stating that DRM technologies had not worked, and had not controlled music piracy. Apple would immediately embrace DRM-free downloads, Jobs noted, if only the big four music companies would allow it. (A nice trick of shifting the focus away from Apple and applying pressure on the industry.) 

With CD sales dropping and consumer criticism rising, the music industry began a noticeably silent change of course. Eventually, EMI, Vivendi Universal, Warner, and, most recently, Sony, all agreed to sell DRM-free music. Significant retailers who pursued this new opportunity were Wal-Mart and Amazon. Both have made substantial inroads in the music download market. Amazon is now increasingly cited as a growing threat to Apple’s iTunes dominance. Single songs are widely available at Amazon for $0.89 each, and most albums are priced from $5.99 to $9.99. Further, the music is playable on almost any audio-capable device.

What does all this mean for campuses? First, institutions may want to seriously consider whether providing “free” music download services to students today is merited. This is particularly true if the music that would be provided is only “rented” to students for temporary use. If DRM is still used so that playability is restricted and the music “disappears” when the student graduates, then the free market where students can buy music inexpensively may now be a much better option. Whatever choice institutions make, it is essential that we do everything possible to instruct students on the moral and legal issues concerning copyrights and digital content.

David W. Dodd is vice president of Information Resources and CIO at Xavier University in Cincinnati. He can be reached at 513/745-2985 or [email protected].