Universal Music Group, the largest record label on Earth (an accomplishment akin to being the world's largest corset-buttoner, horse-shoer, or gutta-percha cable-insulator), has told Apple that it plans not to renew its contract to sell its music via the iTunes Store.
Now, I'm the last guy to celebrate the iTunes Store. Though it is easy to use, almost every penny you spend there ends up hurting you in the long term, by locking you into buying Apple products if you want to go on enjoying your music. That's because the iTunes Store sells mostly DRM-crippled music, tunes that are locked with anti-copying technology. The US Digital Millennium Copyright Act of 1998 makes it illegal to manufacture products that are compatible with DRM-locked music unless you have the DRM vendor's permission. That means that Apple's competitors are only allowed to make compatible products with Apple's blessing. Apple itself relies on the right to make compatible products without this stricture: for example, Apple's popular Keynote software is compatible with presentations made with Microsoft's PowerPoint.
But there's no denying that the iTunes Store is the only successful digital music seller that the majors have tried. They cry piracy all day long, and now Universal wants to shut down the only legit alternative?
It's clear that Universal wants leverage against Steve Jobs so that they can set their own prices, but brinkmanship won't win it for them. Universal already faces an increasingly tough time showing up in Congress and begging for more opportunities to strip everyday Americans of their life's savings (20,000 record industry lawsuits and counting). Going back to DC after shutting down the only successful online Universal retailer will be a fool's errand. "Help us protect our copyrights by suing people who take them without paying, even though we shut down the only store that anyone liked using."
If Universal wants leverage, they need to follow the example of EMI: sell their music without DRM. That will enable any vendor, anywhere, to make products that interoperate with iTunes. You'll be able to play your iTunes music on your Nokia phone, your Creative Labs walkman, your Linux laptop. With a universe of devices, Apple's position as the Wal-Mart of digital music will be weakened. Apple may have the majority of the player market, but Universal can offer its DRM-free music via any retailer it wants, on any terms it wants — and those tracks will play on the iPod and any other device.
No one buys music for the DRM. If you've set out to buy your music rather than nick it for free, the presence of DRM isn't an enticement to buy more. No one wants music that does less. And anyone who wants DRM-free music can get it in a heartbeat, just by using P2P. You can't lure those people back from the darknet by offering them crippled tunes.
I used to laugh at the idea that the record labels would roll over and die, crushed by their own stupidity. But when this is the best they can come up with, you have to wonder: how much longer can this last? The senior execs are just waiting for retirement, hoping that the business lasts long enough to see them out the door. These companies are filled with younger execs who see their future collapsing as the old men fiddle. Isn't it time that the shareholders dumped the senior teams and turned the companies over to people who care about having a future?
See also: iTunes Store will sell ENTIRE EMI CATALOG DRM-free!!11!1ONE!
