Year in Review: DRM

There were major changes to the digital eco system with respect to the use of digital rights management technology in 2008. A number of stores migrated to mp3s and stopped using DRM leaving consumers of music in a precarious situation. Other forms of digital delivery emerged which use DRM and there was further discussion regarding the implications of the use of this technology.

Migration Away from DRM
A number of existing digital music stores negotiated with the record labels to allow consumers to purchase songs without DRM. iTunes was successful in transitioning away from the technology with respect to tracks from EMI and some independent artists.[1] Similarly WalMart and Yahoo were able to negotiate the right to sell music without DRM protection.[2] In the UK 7digital and Tesco also moved away from the use of DRM while the new classical site Passionato launched without the use of DRM.[3] New stores such as Amazon, Rhapsody (paid downloads), Napster (paid downloads), Limewire and Hot Topics also launched without using protected music.[4] Streaming services such as LaLa and Imeem also recognised consumer preferences for unprotected songs.[5] The new physical form of SlotMusic also entered the market without DRM protection for tracks.[6]

The Place of Consumers
In the process of transitioning away from the use of DRM on music three stores initially announced that in doing so they would remove the support for consumers that had already purchased protected music. This would have meant that existing customers would be unable to reauthorise the use of their music on new computers. In the face of public outcry MSN Music announced that its servers would remain online until 2011, Yahoo issued vouchers to existing users to enable them to replace the music they had purchased with equivalent tracks, while WalMart agreed to maintain its servers but failed to specify how long this would remain.[7]

New Services Using DRM
A number of new services were launched which retained the use of DRM.[8] This included QTrax, an ad supported closed peer to peer network that limits the use of music through the use of this DRM and employs embedded watermarks for the purposes of tracking downloads and remunerating artists.[9] TDC also launched a streaming service in Denmark with uses DRM to ensure that music is not shared without permission.[10]

Other Developments
Snocap, the business commenced by Shawn Fanning the developer of the original Napster, was sold to Imeem but largely failed in its attempt to introduce DRM technology in the file sharing environment that would enable the tracking of songs and distribution of funds to artists.[11]

A new form of DRM was deployed for use in Australian Indigenous communities which determines the personal information of computer users for the purposes of restricting access to cultural works that are considered inappropriate based on the sex, age and role within the cultural boundaries of those communities.[12]

Legal Issues
Concern for consumer protection remained high in Norway where, after 2 years of negotiations, it was determined that the limitations imposed by iTunes are worthy of litigation with the Norwegian Consumer Ombudsman announcing that it would run a test case to argue that the inability of consumers to use iTunes tracks on non iPod mp3 players is unfair.[13]

The Canadian Privacy Commissioner also lobbied against the introduction of laws supporting DRM that enables the tracking of personal information.[14]

[1] Digital Music News, iTunes DRM-Free Licensing Moves Continue, PIAS Latest (22 January 2008) <http://www.digitalmusicnews.com/stories/012009pias> at 30 January 2008
[2] Digital Music News, Warner Music, Wal-Mart Work It Out... MP3s Online (7 May 2008) <http://www.digitalmusicnews.com/stories/050708warner> at 10 May 2008; TechDirt, Wal-Mart Ditches DRM... And Lots Of Major Label Music With It (8 April 2008) <http://www.techdirt.com/articles/20080408/003857784.shtml> at 13 April 2008; Digital Music News, Wal-Mart Reaffirms Commitment to MP3s; Standoff Continues (7 April 2008) <http://www.digitalmusicnews.com/stories/040608walmart> at 8 April 2008; Digital Music News, Developing: Sony BMG, Warner Music Downloads Missing at Wal-Mart (4 April 2008) <http://www.digitalmusicnews.com/stories/040308wal-mart> at 8 April 2008; Digital Music News, Yahoo Negotiating DRM-Free, Retreading Music Strategy (23 January 2008) <http://www.digitalmusicnews.com/stories/012308yahoo> at 30 January 2008
[3] Digital Music News, More MP3s In Britain: 7digital Goes Full Circle (17 September 2008) <http://www.digitalmusicnews.com/stories/091608seven> at 21 September 2008 ; Digital Music News, Warner Goes DRM-Free In Europe; Licenses 7digital (3 March 2008) <http://www.digitalmusicnews.com/stories/030308digital> at 5 March 2008 ; Guardian.co.uk, 7digital first to sign up big four to unrestricted MP3 (17 September 20080 <http://www.guardian.co.uk/music/2008/sep/17/netmusic> at 21 September 2008; Digital Music News, DRM-Free Dealmaking Continues; Tesco Inks WMG (16 September 2008) <http://www.digitalmusicnews.com/stories/091508tesco> at 21 September 2008; Digital Music News, MP3 Fever Spreads: Tesco Latest to Dump DRM (16 April 2008) <http://www.digitalmusicnews.com/stories/041508tesco> at 17 April 2008; The Register, Classical downloads service hits right note on DRM (11 September 2008) <http://www.reghardware.co.uk/2008/09/11/passionato_launches_drm_free_downloads/> at 21 September 2008
[4]The Register, Amazon to take MP3 downloads international (28 January 2008) <http://www.reghardware.co.uk/2008/01/28/amazon_mp3_rollout_this_year/> at 30 January 2008; The Register, DRM now dead, as Amazon snags Sony (11 January 20080 <http://www.theregister.co.uk/2008/01/11/amazon_sony_music_drm_now_dead/> at 20 January 2008 ; Digital Music News, It's Official: Sony BMG Delivers MP3s to Amazon (10 January 2008) <http://www.digitalmusicnews.com/stories/011008sony> at 20 January 2008 ; CNet News, Hot Topic launches DRM-free music service (29 October 2008) <http://news.cnet.com/8301-17939_109-10078414-2.html> at 31 October 2008; ZeroPaid, Rhapsody Opens DRM Free Music Store (1 July 2008) <http://www.zeropaid.com/news/9599/Rhapsody+Opens+DRM-Free+Music+Store> at 4 July 2008; ZeroPaid, Napster Comes Full Circle, Launches DRM-Free mp3 Store (22 May 2008) <http://www.zeropaid.com/news/9509/Napster+Comes+Full+Circle%2C+Launches+DRM-Free+MP3+Store> at 5 June 2008; Digital Music News, Resnikoff's Parting Shot: Putting Napster's MP3s Into Perspective (15 May 2008) <http://www.digitalmusicnews.com/stories/052008parting> at 21 May 2008; Digital Music News, Napster Gets It Done: MP3s For Everyone (19 May 2008) <http://www.digitalmusicnews.com/stories/052008napster> at 21 May 2008; Billboard.biz, Napster Goes DRM-Free (20 May 2008) <http://www.billboard.biz/bbbiz/content_display/industry/e3i9189f73c48e7dd51669d4bee4dc1d1b1> at 21 May 2008; Digital Music News, The DRM-Free Drag... Why a Broader Rollout Remains Elusive (2 April 2008) <http://www.digitalmusicnews.com/stories/040208drm/> at 8 April 2008; Digital Music News, LimeWire Store Starts Bearing Fruit; DRM-Free Catalog Appears (19 March 2008) <http://www.digitalmusicnews.com/stories/031808limewire> at 23 March 2008
[5] EFF Deeplinks, DRM for Streaming Music Dies a Quiet Death (15 August 2008) <http://www.eff.org/deeplinks/2008/08/drm-quietly-dies-streaming-music> at 25 August 2008; ArsTechnica, Evolution of DRM: streaming services use unencrypted MP3s (18 August 2008) <http://arstechnica.com/news.ars/post/20080818-streaming-media-services-skip-the-drm.html> at 22 August 2008
[6] ZeroPaid, 'Slot Music' - Record Labels to Sell Music On MicroSD Cards (24 September 20080 <http://www.zeropaid.com/news/9771/%27SlotMusic%27+-+Record+Labels+to+Sell+Music+on+MicroSD+Cards> at 26 September 2008; The Wall Street Journal, SanDisk, Record Companies Plan New Music Format (22 September 2008) <http://online.wsj.com/article/SB122204010273861109.html> at 26 September 2008
[7] Technologizer, 25 Arguments for the Elimination of Copy Protection (13 October 2008) <http://technologizer.com/2008/10/13/copy-protection/> at 20 October 2008; TechDirt, Microsoft Keeps DRM Servers Alive For Now; Won't Screw Over Own Customers For A Few More Years (19 June 2008) <http://www.techdirt.com/articles/20080619/0907281455.shtml> at 26 June 2008 ; Digital Music News, Microsoft: We'll Support Your Downloads After All (17 June 2008) <http://www.digitalmusicnews.com/stories/061808msft> at 20 June 2008; EFF Deeplinks, MSN Music Debacle Highlights EULA Dangers (5 May 2008) <http://www.eff.org/deeplinks/2008/05/msn-music-debacle-highlights-eula-dangers> at 8 May 2008; ArsTechnica, DRM sucks redux: Microsoft to nuke MSN Music DRM keys (22 April 2008) <http://arstechnica.com/news.ars/post/20080422-drm-sucks-redux-microsoft-to-nuke-msn-music-drm-keys.html> at 27 April 2008; Digital Music News, MSN Music: The DRM Aftertaste Really Lasts... (24 April 2008) <http://www.digitalmusicnews.com/stories/042308msn> at 26 April 2008; Digital Music News, Microsoft's Final 'Up Yours' To Those Who Bought Into Its DRM Story (23 April 2008) <http://www.techdirt.com/articles/20080422/234401923.shtml> at 26 April 2008; Digital Music News, Yahoo Music Makes Good; Offers DRM-Free Replacements, Refunds (31 July 2008) <http://www.digitalmusicnews.com/stories/073008yahoo> at 7 August 2008; SiliconValley/Associated Press, Yahoo offers coupons for songs that stop working when it shuts download service (30 July 2008) <http://www.siliconvalley.com/news/ci_10044573?nclick_check=1> at 6 August 2008; TechDirt, Yahoo Offers Refunds Or DRM-Free Music In Exchange For Shutting Down DRM Servers (29 July 2008) <http://www.techdirt.com/articles/20080728/1455551813.shtml> at 31 July 2008; CNet News, EFF: Yahoo Music should compensate customers (24 July 2008) <http://news.cnet.com/8301-1023_3-9999244-93.html> at 28 July 2008; EFF Deeplinks, Here We Go Again: Yahoo! Music Throws Away the DRM Keys (24 July 2008) <http://www.eff.org/deeplinks/2008/07/here-we-go-again-yahoo-music-throws-away-drm-keys> at 28 July 2008; Digital Music News, About Those Yahoo Music Unlimited Downloads You Bought... (25 July 2008) <http://www.digitalmusicnews.com/stories/072408yahoo> at 28 July 2008; TechDirt, Did Yahoo Not Pay Attention To What Happened When Microsoft Pulled The Plug On Its DRM Server? (24 July 2008) <http://www.techdirt.com/articles/20080724/0341381775.shtml> at 28 July 2008; ArsTechnica, DRM still sucks: Yahoo Music going dark, taking keys with it (24 July 2008) <http://arstechnica.com/news.ars/post/20080724-drm-still-sucks-yahoo-music-going-dark-taking-keys-with-it.html> at 25 July 2008; ArsTechnica, Wal-Mart joins MSN and Yahoo, leaves DRM servers online (10 October 2008) <http://arstechnica.com/news.ars/post/20081010-wal-mart-joins-msn-and-yahoo-leaves-drm-key-servers-online.html> at 12 October 2008; TechDirt, Surprise, Surprise: WalMart Changes Its Mind, Keeps DRM Servers Running (For Now) (10 October 2008) <http://www.techdirt.com/articles/20081010/0020522511.shtml> at 12 October 2008; EFF Deeplinks, And Walmart Makes Three: Another Music Service Plans to Shut Down DRM Support (28 September 2008) <http://www.eff.org/deeplinks/2008/09/and-walmart-makes-three-another-music-service-plan> at 5 October 2008; Digital Music News, Wal-Mart Moves On; Ditches Support on DRM Downloads (30 September 2008) <http://www.digitalmusicnews.com/stories/092908walmart> at 5 October 2008; ZeroPaid, Another DRM Music Store Scheme Bites the Dust - WalMart Shuts Off DRMd Music (1 October 2008) <http://www.zeropaid.com/news/9780/Another+DRM+Music+Store+Scheme+Bites+the+Dust+-+Wal-Mart+Shuts+Off+DRMed+Music> at 5 October 2008; TechDirt, Reason #9,358 For Not Buying DRM'd Music: Wal-Mart Shuts Down DRM Servers (29 September 2008) <http://www.techdirt.com/articles/20080929/0004132388.shtml> at 5 October 2008
[8] ArsTechnica, If music DRM is dead, the RIAA expects its resurrection (8 May 2008) <http://arstechnica.com/news.ars/post/20080508-if-music-drm-is-dead-the-riaa-expects-its-resurrection.html> at 10 May 2008; TechDirt, RIAA, MPAA In Denial About The Death Of DRM (8 May 2008) <http://www.techdirt.com/articles/20080508/1414361067.shtml> at 10 May 2008
[9] Wired, Qtrax Licenses Universal Music Group International (14 October 2008) <http://blog.wired.com/music/2008/10/qtrax-licenses.html> at 15 October 2008; Wired Listening Post, Qtrax Inks Deal With Universal for Legal P2P Music (6 May 2008) <http://blog.wired.com/music/2008/05/qtrax-inks-deal.html> at 7 May 2008; TechDirt, Yet Another Report Of Free Label Music That Isn't (28 January 2008) <http://www.techdirt.com/articles/20080128/02035986.shtml> at 30 January 2008
[10] Digital Music News, TLC for TDC? Why a Danish Model Is Getting So Much Attention (20 October 2008) <http://www.digitalmusicnews.com/stories/101708tdc> at 21 October 2008; TechDirt, Danish ISP Latest To Offer Crippled DRM-Infested Music Subscription Service (1 April 2008) <http://www.techdirt.com/articles/20080401/104543715.shtml> at 3 April 2008
[11] Digital Music News, Right idea, wrong time: Snocap's corpse washes up at Imeem (7 April 2008) <http://www.theregister.co.uk/2008/04/07/imeem_acquires_snocap/> at 8 April 2008
[12] BBC News, Aboriginal archive offers new DRM (29 January 2008) <http://newsvote.bbc.co.uk/mpapps/pagetools/print/news.bbc.co.uk/2/hi/technology/7214240.stm> at 31 January 2008
[13] Technologizer, 25 Arguments for the Elimination of Copy Protection (13 October 2008) <http://technologizer.com/2008/10/13/copy-protection/> at 20 October 2008; WashingtonPost/Reuters, Norway consumer body challenges Apple over iTunes (1 October 2008) <http://www.washingtonpost.com/wp-dyn/content/article/2008/10/01/AR2008100101183.html> at 5 October 2008; Digital Music News, Norway Starts Sticking It to iPod+iTunes... (30 October 2008) <http://www.digitalmusicnews.com/stories/092908norway> at 5 October 2008; TechDirt, Norway To Move Forward In Trying To Force Apple To Open Up iTunes (30 September 2008) <http://www.techdirt.com/articles/20080929/1902222408.shtml> at 5 October 2008
[14] ArsTechnia, Canadian Privacy Commissioner: Just say no to intrusive DRM (20 January 2008) <http://arstechnica.com/news.ars/post/20080120-canadian-privacy-commissioner-just-say-no-to-intrusive-drm.html> at 31 January 2008