A couple of weeks ago, I surmised that because Apple enjoys a dominating end-to-end position in the digital music market, most consumers are never really affected by the DRM restrictions they impose -- if users are buying music to play on their iPods, then they don't really come in contact with the DRM. If consumers aren't bothered by DRM, or perhaps not even aware that it exists, will "no DRM" resonate as a marketing message? Recently released sales data seems to suggest so.
"Too many people are already ingrained in the iTunes+iPod experience, and for many of them, DRM doesn't matter. They buy tracks on iTunes and put them on their iPods. As long as iPods control the player market, iTunes will control the download market," I wrote. But the UK's 7 Digital, which sells DRM-free tracks in Europe, recently announced that sales shot up 188% since they started selling music without DRM.
A 2005 study by INDICARE (pdf), revealed that in Europe that over 60% of digital music consumers had never heard of DRM. Just 13% had any real notion of what DRM was. Certainly, with the media attention given to digital rights management over the past couple of years, consumer attitudes might have changed, but even among a presumably tech-savvy audience, such as at the blog Mashable, a recent unscientific poll indicated that 36% of users wouldn't let the presence DRM affect their music buying decisions. If we can assume that Mashable's audience is generally more tech-savvy than the standard digital music consumer, then we can probably assume that a greater percentage of the general public doesn't let DRM influence their purchasing decisions.
Yet 7Digital specifically attributes the 2007 sales growth to "the removal of DRM and availability of high-quality 320kbps format MP3 tracks." And though Amazon has not released specific sales figures from its DRM-free MP3 store, CEO Jeff Bezos said in October that Amazon was "....very happy with the early results that we're seeing. We're getting terrific feedback from customers. Everybody loves the DRM free format, so selling MP3s is very successful for us..."
So it would appear that customers are indeed responding to DRM-free music in a positive way -- or they are just responding to viable alternatives to iTunes. Either way, the results should be good for the consumer, whether they actually care or not.
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Yes, there may be a lot of people who just use iTunes, but when they get their new smart phone or other MP3 player (like my kids just did), they realize how bad the situation is. They have to burn the songs onto CDs and then re-import them.
Posted by: AlexeckI'd agree that people's awareness of DRM has increased greatly since 2005. Regarding Mashable's unscientific poll, could that 36% of people who wouldn't let DRM affect their media buying decisions be those people who are already buying in iTunes/playing on their iPod? Maybe this doesn't mean they don't care about DRM, but just that they like their iPods and will continue to fill them with music from iTunes, regardless of the presence of DRM
Posted by: Jason Peck | January 11, 2008 10:39 AMObviously DRM matters to GENERIC music services because, if music is wrapped in DRM it can't really be generic. Amazon doesn't have a specific mp3 player that it caters to, hence DRM does matter to their consumers as they expect to be able to play their mp3s on any given player at any given time. Selling DRM-free music would have been an advantage to Apple ONLY because it would have made iTunes a more generic service and would have enabled it to start using its massive catalog to fill up all the other mp3 players that aren't iPods.
As long as Apple has the music to supply people really have no reason to stop using the iPod/iTunes package. Now if iTunes didn't have anything to sell, that is a whole different story.
Posted by: Devlin | January 11, 2008 1:15 PMThis is about monopoly versus competition. In a competitive market with multiple providers (of digital content), DRM quickly becomes impractical and a burden to consumers. The fact that consumers don't currently notice DRM only tells us that we don't have a free market.
Posted by: Rollo | January 12, 2008 5:32 AMThe future is music distribution 2.0. Ad supported content publishing that allows content creators to provide free music downloadswhile sharing in ad and sponsor revenue.
Posted by: jzone | January 12, 2008 1:08 PMThe future is music distribution 2.0. Ad supported content publishing that allows content creators to provide free music downloadswhile sharing in ad and sponsor revenue.
Posted by: jzone | January 12, 2008 1:09 PM