2008 Woodie Awards
Uncertainties Remain About the Future of Online Music
Chris McGrady
Issue date: 9/13/07 Section: Scene
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In an increasingly complex digital world, the vast majority of worldwide business industries are running full speed into the Internet revolution. While some businesses around the globe cope with the technological advances in stride, others drag their feet reluctantly. The music industry stalwarts, namely the "Big Four" - Universal Music Group, Sony/BMG, EMI and Warner Music Group - continue to slowly find a way to adapt to (or is it resist?) the changing world of digital music.
The "fight" started in 1995, when most of the proliferation of MP3 music files began on the Internet. By 1999, with the advent of Napster, users had access to vast libraries of music through shared peer-to-peer networks. The small size of MP3 files enabled widespread distribution of music, and once record companies noticed a profit-dip from - and a reduction in - CD sales, lawsuits were filed. Ultimately, the free Napster closed down, but the digital sharing of music was cruising along at an unstoppable pace.
So where do we find ourselves today? To combat the illegal sharing of MP3 files, many record companies are encrypting their music with a technology called DRM, or digital rights management. This encryption limits the capabilities of digital copies of songs. Think of the files you might have downloaded from iTunes. Unless the files are DRM-free (as recently some iTunes songs are), you can only burn a certain number of copies, and the files will not play on someone else's computer. Some songs are even encrypted with personal information, such as your name and your e-mail address.
But, as with most processes, there are loopholes. Once a song is burned onto a disc, unlimited copies of that disc can be made and shared. It is still illegal, but hard to trace for record companies seeking royalties for using their music. So what can record companies do? Realistically, nothing. And just now are they starting to realize this.
Some record companies, such as London-based conglomerate EMI, are starting to realize that, while they may catch people sharing music here and there, the spoils are not in proportion to the fight. EMI is now releasing DRM-free music through outlets such as iTunes. The files are offered in a higher quality format than the other MP3s and come at a premium price. As these tracks spread, EMI hopes, listeners will be more likely to want to buy the whole album and attend concerts, leading to increased profits.
The "fight" started in 1995, when most of the proliferation of MP3 music files began on the Internet. By 1999, with the advent of Napster, users had access to vast libraries of music through shared peer-to-peer networks. The small size of MP3 files enabled widespread distribution of music, and once record companies noticed a profit-dip from - and a reduction in - CD sales, lawsuits were filed. Ultimately, the free Napster closed down, but the digital sharing of music was cruising along at an unstoppable pace.
So where do we find ourselves today? To combat the illegal sharing of MP3 files, many record companies are encrypting their music with a technology called DRM, or digital rights management. This encryption limits the capabilities of digital copies of songs. Think of the files you might have downloaded from iTunes. Unless the files are DRM-free (as recently some iTunes songs are), you can only burn a certain number of copies, and the files will not play on someone else's computer. Some songs are even encrypted with personal information, such as your name and your e-mail address.
But, as with most processes, there are loopholes. Once a song is burned onto a disc, unlimited copies of that disc can be made and shared. It is still illegal, but hard to trace for record companies seeking royalties for using their music. So what can record companies do? Realistically, nothing. And just now are they starting to realize this.
Some record companies, such as London-based conglomerate EMI, are starting to realize that, while they may catch people sharing music here and there, the spoils are not in proportion to the fight. EMI is now releasing DRM-free music through outlets such as iTunes. The files are offered in a higher quality format than the other MP3s and come at a premium price. As these tracks spread, EMI hopes, listeners will be more likely to want to buy the whole album and attend concerts, leading to increased profits.