SpiralTruth

Apple did something interesting this Tuesday with its removal of DRM from most of its digital music catalog. Not only was the DRM removed from new music, but you could also get it removed from music you had already purchased – for an “upgrade” fee. I’ve bought a few tunes on from Apple’s music store because it was so easy, and at the time, I saw DRM as a concession we’d just have to make in order to coax the record industry into the 21st century. Yes, I was willing to pay extra for what should have been there (or not there) in the first place. Paying the “upgrade” fee to remove DRM from previously purchased music didn’t make me feel like a complete sucker, though, because I was also getting tracks that were encoded at a better quality. Now the quality is still not CD quality. It’s just closer than what I had before. It’s also closer than the files that I ripped from my CD library when I started the shift towards a hard disk based music library – at a time when storage space was slightly more expensive and I just couldn’t justify taking up more space for a gain in quality I could hardly hear. But here’s what I think is really cool. My “upgrade” was actually a format shift, not unlike the format shift from records to tapes and from tapes to CDs. A file type and encoding is analagous to a tape or CD in that it is a container to make transporting that idea that came from some artist’s head easier, with an acceptable fidelity. The difference is that this format shift was able to happen on the same medium.
Who remembers the shift from cassette tapes to CDs? Or VHS to DVD? Wasn’t it awful? All your favorite cassette and VHS tapes were suddenly less satisfying. You could live with that, or you could replace the ones you really cared about with their new format equivalents. Ah, but you had to pay full price for that luxury. I don’t remember record and movie companies offering to do trade ins. As a consumer of the old format, you simply had to suck it up if you wanted the new one. In light of today’s realities then, what’s something that a consumer of songs and movies might want to pay money for? Furthermore, could this be something that movie and record companies could have enough control over to ensure they make back their investment in a particular work of art? Could they have this control without turning our world into an Orwelian nightmare? What if instead of paying for a physical object, we paid for access?

No, I’m not talking about streaming.

Say I pay for access to John Lennon’s “Imagine”. I get a 256 Kbps, DRM-free audio file. Then I copy that file for all my friends. Under the existing model, that’s still a loss of revenue for the record company. But let’s say technology improves a whole bunch and suddenly we either have better encoding or cheap enough storage and high enough bandwidth to make 100% CD quality sound feasible in our electronic music libraries? Maybe later, we decide that CD quality sound isn’t good enough. After all, we’re still throwing away a lot of the analog signal at CD quality. Some of the audiophiles you know might even claim to hear a huge difference. Or maybe we start listening to music in some other way that requires going back to the original recordings and re-mixing or re-mastering them. Dolby 5.1, anyone? My point is simply that there always seems to be a better format on the horizon. Those friends who I shared a copy with way back? Well, they’ve got the copy, but I’m still the only one with the access. I just download a new copy of “Imagine” and every other tune in my collection that I want to hear in the even bigger and better format. My friends, who just have the copy, will need to go to me for “Imagine” and then to everyone else they copied from to update their libraries. Could they do this faster via file sharing? Yes. But not nearly as fast as if they had paid for access. And if the fee for access is low enough, the time they spend finding the better copy, or the time spent tweaking the file sharing clients to make that process easier, starts to be a real drag. The rules have changed. Music and movies are no longer physical goods. By insisting that we treat them like they still are, the record and movie industries are missing out on a business model that could be just as profitable, if not more – and they’re pissing us off royally in the process. It doesn’t have to be this way.

Let’s look into the future for a moment. What’s going to happen to the remaining physical goods industries as nano technology converges with 3D printing and we’re suddenly able to manufacture our purchases in our living rooms? What we do now with music and movies will determine the fate of the industries that will follow.

My suggestion to the leaders of these industries and to our legislators is to either get with the times or get ready for a bumpy ride.

Am I really saying that allowing people to legally share music is better business? Yes. I’m certainly not the first to point out that when a song can be passed around freely, “pirates” become your free “marketing team”. Add to this a real incentive to pay, not for a single recording on a particular medium, but for access to the best current and future versions of that recording. And now we start to get into that really great reciprocal relationship that can form between producers and consumers. The producer can offer related access, say to live recordings of the same song, knowing that a consumer who bought the studio version is more likely to want those live recordings than someone who never bought the song. But because there is already that relationship, the producer offers the live versions at a reduced price. In fact, the more the consumer buys from that producer, the more deals he or she gets. In the age of the Internet, this kind of loyalty program can be run with digital precision. And while I might not be willing to pay 99 cents for a live version of a tune I like, I might be willing to pay 10 or 20. With that, you have the beginnings of a model that is good for everyone, where money again reflects real value to consumers, and where the producers of content can be compensated fairly. Maybe this was the intention of Apple and/or the record companies all along, but if it wasn’t, I certainly hope they consider the opportunity they’ve opened up for a way out of this wasteful war on piracy.