Introducing me and MP3

For the last 3 years I've been working with digital media, from streaming PopIdol highlights to showing Kylie's music and underwear, dealing with the labels, the technology companies and the users. The music industry slowly seems to be accepting digital music, with the legitimisation of Napster, iTunes, BuyMusic and the European MSN MusicStore.

Ancient (in internet terms) History

As always, however, there are problems. For years the geeks and nerds have been clamouring for music on-line and when the industry didn't respond the bogeyman appeared, in the form of the MP3 format. Offering computer playable music that didn't sound that different from CDs (format arguments aside) and with a file size that the average user wouldn't mind waiting for. Users starting copying their CDs to their computer, then started sharing. When software arrived in the form of Napster that made sharing easy MP3 took off, without the music industry being involved. The music industry panicked, the RIAA over-reacted and the artists either shouted about their songs being swapped for free or shouted that music should be free and bands releasing an album direct to MP3 as a final two fingers in the air to their label. Users didn't care, the music companies were seen as large, faceless corporations who signed contracts with artists which stole the artist money. It was easy to withhold money from a corporation. Computer magazines were full of articles about how artists should publish their music themselves, in digital form, obviously, cutting out the labels and making money directly. People were sued, sharing networks came and went, geeks shouted about freedom of information, the industry shouted about losing money and napster probably set back legitimate digital music for a couple of years.

Portable MP3 players become popular; consumers ripped their CDs into MP3 and loaded them onto their RIO players. Again the RIAA became heavy handed and tried to stop the march of technology by legal bombs. They failed.

Slowly the music industry realised that music was going to computerised no matter how many swappers are sued or networks shut down. Legal digital music started to appear on-line, for free or with marketing departments using Digital Rights Management (DRM) to collect information on their listeners. Microsoft produced an easy to implement DRM SDK, which only really worked on Windows (version 1 worked on both the PC and the Mac, but the following versions have been for the PC only). This was rapidly cracked then patched. Unmarked "Copy protected" CDs appeared, in an attempt to stop computer CD drives ripping their contents to MP3 or WMA. Consumers found that their computer would no longer play their CD, some Macintosh consumers found it would crash their computers. A lowly marker pen was used to bypass one protection method.

iSaviour

The cycle went on, create new swapping network, get sued, create new swapping network, etc. (the latest challenge to the RIAA and the industry is a swapping network hosted in a refugee camp in Palestine) until Apple got involved. Apple Macintoshes have been the machines of choice for media people for a long time. They've been used in the music industry and have gather fans such as Peter Gabriel (ironically, since his digital media company, od2 produce windows only DRM solutions). Apple produced the iPod, the first real "non-geek" MP3 player. Sleek, stylish and expensive (much like their computers) it rapidly became a must have item for geeks and those with money to burn. Initially Mac compatible only, a Windows version was quickly released and their market share grew. Each iPod was stickered with the plea "Don't steal music".

So the MP3 format grew in the consumer consciousness, but because of its inherent lack of control the labels didn't like it. You still couldn't download MP3s from the labels, you had to buy the CD and rip it (assuming it wasn't copy protected of course).

Slumbering giants awake

Legal subscription services started to appear, the original incarnation of EU MSN Music was one. You could pay to listen to streams, or download tracks that would expire when your subscription expired. Obviously these weren't popular, probably due to the lack of content and the lack of ownership. The labels seem to look on this failure as proof that music may not succeed on line (although if the majors of EMI had put their entire catalogue on-line I'd happily have paid a €10 subscription a month for full access).

Having proved the consumer market for MP3 players with the iPod, Apple kicked the music industry again. They managed to sign a deal with the major labels to sell their content on-line, with the same terms and conditions for each label, the same price per track, quite "friendly" DRM rules (playable on 3 computers, any number of iPods and each playlist can be burnt up to 10 times) and available in AAC format (a DRM protected version of MP4). Somehow Apple had managed to bang the industry heads together and come out with something usable. Even slashdot didn't complain too loudly about the DRM (although they still complain about Windows Media restrictions, but zealots can be hypocritical). Of course iTunes was restricted to the Mac (despite there being a PC iPod which uses third party software to drive it) and, due to Apple's contracts with the labels, only available in the US (as Shawn Yeager soon discovered, to his cost).

Bugs and limitations

As you can imagine the immediate success of iTunes, which is levelling off after launch, Microsoft would not sit idlely by. Rather than recreate iTunes for the PC, the Microsoft strategy has been to let their partners use the Windows Media DRM SDK to produce their own stores. These stores have had problems that iTunes hasn't had, the labels have forced their own DRM rules on their tracks (so you will be able to do different things with a EMI track compared to a Universal track), poor implementation (for example buymusic doesn't appear to predeliver licenses, so for the first time you play a track you must login to a license acquisition system before it will work), support issues (for example as PC hardware is more varied than Apple's buymusic.com washes their hands of any problems using the tracks you have purchased), obvious errors (such as od2 sending emails from a domain name that doesn't exist, so most mail servers reject their emails) and differing pricing models per track. Of course none of the tracks available for sale are CD "quality", they all use a lower bitrate, so if you burn audio CDs with them you end up with a poor quality CD for the price of a "proper", commercial one.

Real have their own subscription store, with their own format, linked to their player. Despite Real's attempts to use "open source" to increase support for their formats Real's habits such as spying on their users, installing things users don't want, stealing file associations and dropping advertising icons on the desktop means most users don't care about or want Real Player installed.

So you generally have unhappy consumers, who won't pay the high price for a CD, have problems with the current digital music stores and who fire up KaZZA Lite to get what they want (be it music, video, cracked software or porn).

I'd teach to the world to download, in perfect harmony

So, what can be done? How will the labels, the geeks and the consumers meet? What would be the ideal way to by on-line? What are the sticking points?

• Format

Currently Windows stores sell music using WMA, the Apple Store uses AAC, the Real subscription service uses Real Media and a few stores use MP3. None of the players from the major parties play any other format than their own plus the ubiquitous MP3 format. Only Microsoft seems to share their format with others, there are numerous portable devices which support WMA and even DVD players which support WMV (Windows Media Video). Frankly this situation won't go away. The labels won't use MP3 as there is no control mechanisms surrounding it. Apple won't play nicely with anyone else, sticking to the strategy they started with when building PCs and Microsoft has yet to push the recent versions of Windows Media DRM onto the Mac (saying that it hard to provide DRM on an operating system where the source is available). Of course the runner up OSes, Linux, BSD and so on don't have a hope of getting protected AAC or WMA files to play on their operating systems. This problem can't be solved. Even with the porting of iTunes to Windows I doubt Apple will integrate their format with Windows media player or allow third party portable players to use it. No matter what format it is a CD quality recording should be available. Broadband is here, make use of it.

• Pricing

Consumers are aware CDs are over priced and that labels act as a cartel to keep prices high. Even when the labels have obviously recouped their investment in a production (back catalogues for example) the prices for these CDs are the same as new releases. This attitude has continued with digital music sales. Individual track prices vary from 99cents on iTunes (almost acceptable) to £1 and €1.50 on European stores. $1=£1 is not an acceptable conversion rate.. Full albums, if they are available, cost approximately the same as the physical item. Of course when you buy digital music you don't get a physical item, you don't get the artwork, the sleeve notes or something to hold so why should the price be the same? Consumers like having a physical item for their money. Until the price drops to a reasonable level (for example 75% or even 50% of the physical price) digital sales will not take off (and the labels will use the poor demand as a reason not to continue with their experiment, blaming the consumer and the technology and not their own greed). Don't pull this "golden" track nonsense. There is no reason why new tracks should cost more than existing tracks. It doesn't cost any more to encode a new track than it does to encode the back catalogue and the encoding cost per track is minimal. Either sell them at the same price, or lower the price of back catalogue music. If you are making CD quality files available, don't charge more for them.

• Security

Despite working with DRMed media I don't believe you will ever get secure digital music. There is always a way around the restrictions. The current offerings allow users to burn tracks to CD audio. They can then re-rip the burnt CD into unprotected MP3s or WMAs (although with the inherent loss of quality re-sampling incurs). Software protection systems are routinely broken by crackers. At an extreme you can play the music through your PC and hook a microphone up to your speaker output and re-record that way. The only way to make music "secure" is to play it to one person at a time, in a sound proof booth, then when the listener comes out remove their tongue so they can't sing it, break their fingers so they can't tap it out and for good measure deafen them so they can't compare it and confirm if someone else sings it. Not exactly a workable solution. The industry needs to accept that DRM stops the casual consumer swapping, enforcing their honesty, nothing more. The people that crack the protection were never planning to be honest.

• Usage Rights

"Information wants to be free."
"Really? Then give me your credit card details, that's just information."
This is a major sticking point for the digerati. If you read slashdot you will see the belief that everything digital should be free for anyone to have, this was the attitude that lead to napster. It's only bits and bytes, who gets harmed if they get copied? The labels on the other hand want to limit users' rights as much as possible, witness the restrictions on a DVD license ("Only for use in a private home", heaven help you if you watch a DVD on a plane.) A compromise has to be reached and the compromise has to be accepted by all the labels. Apple got this right, buymusic and od2 haven't. Allow users to play the content on multiple machines, burn to CD, play on any portable players even transfer the license just like they do when they sell a CD on ebay. If the labels want users to play fair then they should play fair themselves.

• Availability and Payment

Make paying easy. Consumers don't care that Visa takes a slice of each payment, why should they be penalised for this? Offer credit card payments (including non-global options like Switch), PayPal, SMS reverse billing and children friendly options. Don't make me pay for credits (like the OD2 system) then charge 1.2 times the maximum number of credits you can buy at one time so I can get a full album.
Make stores globally available. It's fights between labels that have split worldwide rights, again why should the consumer be penalised? The labels need to kiss and make up so everyone can shop from a global store. If I buy in the UK, then move to the US I should still have access to my music.

• Ease of use

Apple has it easy with ease of use. The amount of third party hardware a mac can use is limited in comparison to a PC. Microsoft need to make sure that their DRM platform works well (Windows Media and DRM used to cause massive problems on Windows ME). It must be easy to recover your music and licenses in case your computer crashes. Downloads must be reliable. It must work everywhere and stores should take responsibility for the problems of their users. Buymusic makes the mistake of making you download each track individually. Purchase 20 tracks, click 20 links and choose where to save the files 20 times. There's no need for this, especially when Windows Media provides a virtual album file format. The MSN Europe store almost gets it right, with iTunes it's click and go.
• kazza, napster and the RIAA

Sharing is not going to go away, the labels must accept this. The current RIAA lead prosecutions bankrupting students for sharing harms industry perception. Who wants to give money to an industry that rates the damages for writing a search engine and not actually sharing at over $10,000? An industry that is threatening to sue parents for the actions of their adult children? An industry that rates the damages per shared track at $750 to $150,000? The industry has to reign in the RIAA and promote legal downloads. The money they claim that are losing is imaginary. Would the "pirates" have bought CDs if the MP3s weren't available? Unlikely, they can always tape off the radio.

If you follow this and make a sucessful service, remember me when you're rich. I'd like cash or free backstage passes to a Kylie concert.