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Warner Music's Bronfman on DRM-free tunes

The technology never did what it needed to do

Entrepreneur interview by John Shinal
November 7, 2008 | Comments
Short URL: http://vator.tv/n/508

Several years ago, the major music publishers were still clinging to digital rights management as a way to prevent consumers from copying music. 

Today, all of them have abandoned DRM in various ways in an effort to stop their revenue from continuing to plummet.

So what happened?

"The world changed," says Edgar Bronfman, the head of Warner Music Group, which has just teamed up with MySpace to put all its music on the new music service for the social network's music site. 

An entire generation of consumers got used to downloading pirated music for free, and those that do pay are shelling out just 99 cents on Apple's iTunes store.

The music labels get between 50% and 70% of that revenue, but given the price, it's unlikely they're making much profit margin, if any, from those sales.

That's a radical shift from an industry that used to make huge money from selling music on physical media like CDs.

"No content industry ever went through what we just did," says Bronfman, referring to declining CD sales and digital music models that have failed to yield any profits for the music giants.

In addition, the technology never did what it needed to do. It should have been a standard, and less a restrictive technology, Bronfman says.

"Frankly we never came up with a version of DRM that did what we needed it to do. We're not technology companies."

 

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