Thoughts to ponder while camped out in front of the Apple store.

By Gary Pierson

Launch day for perhaps one of the most widely anticipated - and certainly one of the most wildly hyped - consumer electronics products in years seems an appropriate time to reflect on the state of the digital music revolution. Apple's iPhone combines, among other features, the high-end cell phone and the now ubiquitous iPod music player. (For deep background, see Marty Schwimmer's analysis of the brief trademark fight Apple stumbled into when it announced the name of the new product nearly six months ago here and here.) As such, it represents the convergence of the phenomenon often credited with pushing the music industry into its current state of plunging sales and the phenomenon much of the industry is looking to for salvation. Regardless of one's view of file-sharing web sites and CD-ripping laptops, the fact that the iPod has been a catalyst to major changes in the way consumers acquire and listen to music cannot be denied. Less certain is whether the practice of purchasing ring tones and other tunes for cell phones will provide the new and sustainable stream of revenue the industry so desperately needs.

The evolution of the most common of the digital music players follows closely behind another major shift in the digital music landscape - the sales of digital music files without any DRM protection. Of course internet users have been getting their music with no digital strings attached for years from any of the legion of file-sharing sites. But last month EMI started selling its catalog of songs without copyright protections through Apple's iTunes Store and has so far reported strong sales of these songs despite a higher price tag.  Amazon has announced that it too will launch a DRM-free music store soon.  Apple was a recent advocate of this approach, despite the apparent competitive advantage it enjoys from the fact that files purchased through its service that include DRM protection typically cannot be played on devices other than the iPod. 

The arrival of DRM-free sales is seen by some as a turning point in the struggle over digital music. The argument goes something like this: since the big bad record companies are finally willing to sell their product without copy protection, aren't they acknowledging that the way music fans have been using and sharing music for so long on their own really is okay after all? Should we expect to see voluntary dismissals of all those pending RIAA lawsuits right around the corner? Are the copyright wars over? Does this signal an expansion of fair use rights in the digital arena?

Tempting as those thoughts may be for the file-sharing masses and their sympathizers, a closer look suggests this is not such a radical change of course. First, DRM-free music has been around for decades - in the form of LPs, cassettes and, with a few bungled attempts to the contrary, CDs. The main difference now is that the industry is charging a higher per song price for the DRM-free version. And at $1.29 per song, this is also likely a higher price than consumers have ever paid for DRM-free music in its more traditional formats.

Second, doesn't the availability for legal purchase of DRM-free files weaken the "fair use" argument often offered in defense of file-sharing? Until now, consumers could argue that it was unfair that if they purchased a legal copy of a song from iTunes they could not play it on their non-iPod MP3 player. As the argument goes, this is not unlike preventing a record purchased from one store from being played on a stereo purchased from a rival electronics store. This led many consumers, if not courts, to the conclusion that this perceived inequity in the digital music world justified not paying for the music at all, but rather acquiring it from file sharing sites. At least with respect to a certain catalog of works, this justification is now gone. Given the small number of "big" players in the industry, it can't be long until other major catalogs become available in DRM-free format as well. It strikes me that this takes the "I had no good alternative" argument off the table.

Perhaps the more pressing question to ponder on this day is whether a phone that also plays the latest White Stripes song is any more or less likely to drop a call in mid-conversation.   Maybe one of those people camped out in front of the stores will let us know soon.

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