I will be speaking at the Flow Conference in Austin, Texas on October 9th at a round table about music and copy protection.  I’m posting here my position paper, though regular readers should be familiar with my opinion on the subject.  If anyone’s heading to the conference, please contact me in the comments, email or Twitter.

The other panelists will be (links go to panelist’s position papers).

Patrick Burkart, Texas A&M University (convener)

Danny Kimball, University of Wisconsin-Madison

Ali McMillan, University of Western Ontario

Moderators: Marnie Binfield and David Uskovich

This is the question the roundtable will be discussing:

More and more music fans, artists, and labels are rejecting DRMed file formats in favor of more lenient digital music sharing policies than what are available through most commercial music service providers. Under what conditions do music fans resist copy protections? When have music labels dropped copy protections? What is the disposition of digital music distributors towards DRMed formats?

My response

Thanks to technology, more people are creating and listening to music than ever before. With computers and the internet, it is cheaper and easier to produce and distribute music. Instead of embracing technology, music companies are using technology like DRM to stifle innovation and user value, trying to control their evolving industry.

DRM gives record companies the feeling of control over their music – control they no longer have. But the economics of music are changing. The cost of distributing music has dropped to almost nothing, making music infinitely reproducible by anyone. Music companies used to decades of controlling distribution need to adjust to a new marketplace where plastic discs don’t matter. This means radically changing music’s business models.

Musicians and publishers feared the first digital music device, the player piano, more than a century ago. In 1906, John Phillips Sousa and music publishers asked Congress to ban the player. Instead, Congress instituted the compulsory license system still used today. This took away control from publishers, but helped everyone make more money by embracing the benefits of the technology, selling piano rolls to make songs more popular and performers more valuable.

Computers and the internet can be just as profitable when embraced. Musicians like Trent Reznor, Radiohead, Jill Sobule, Kristin Hersh, and Maria Schneider are experimenting with new business models using infinite goods to sell scarce goods. Reznor posted his own music on file-sharing networks while selling premium editions of his album with a Blu-Ray slideshow, vinyl version, and signature. Reznor grossed $1.6 million in the first week even though his music was freely available online. Sobule and Hersh let fans support the creation of their albums by selling private performances, chances to sing on the album, or executive producer credits. Music companies study file-sharing networks to target advertising and decide tour locations based on the popularity of artists.

Most music companies treat new technology like the enemy, using DRM to limit what technology can do. DRM aims to prevent file-sharing, helping music companies control distribution of an infinite good, while taking away value from paying customers. Music companies expect customers to pay more dollars for less value.

But DRM does not stop file-sharing. Only one MP3 file is needed to spread to thousands of freeloading fans. Almost every form of DRM gets circumvented within days meaning one file always makes it onto file-sharing networks. EMI began selling DRM-free files on iTunes partly because DRM has no effect on piracy.

While DRM fails at its only purpose, it succeeds in making music less valuable, treating paying customers like criminals, and causing technical and public relations nightmares from installing malware (Sony rootkit) to failing devices (Blu-Ray players that don’t play all Blu-Ray discs). DRM-free stores like Amazon and Wal-Mart evolved out of necessity. Music companies forced Apple to lock iTunes with DRM limiting files to only play on iPods. As Apple sold more music, it sold more iPods. When Amazon and Wal-Mart launched their music stores, they had to offer them DRM-free so songs could play on iPods. The music industry handed Apple control over its digital future, from pricing to marketing, because of DRM.

Some DRM validation services get canceled, leaving companies with expensive public embarrassments and unhappy customers with useless music. Yahoo, Google, and Microsoft all canceled support for their DRM. Yahoo and Google offered refunds or DRM-free alternatives to all customers while Microsoft, due to public outcry, reinstated its DRM.

It’s up to the music industry to develop business models that embrace the promotional value of its music to sell more valuable scarce goods. Entertainment has used this model for decades: Television provides free shows supported by advertising and music uses the promotion of radio to increase album sales. There is more money to be made embracing technology rather than fighting it. People can listen to and share music, becoming bigger music fans, and increasing demand for scarce goods like concert tickets and collectibles. Thanks to computers and the internet, every MP3 is a promotional tool.

The music industry needs to adapt to the changing marketplace. Use technology to give customers more value: give people a reason to spend their money. DRM takes away value from customers, causes public relations nightmares, and provides no benefit except a false sense of control. Instead of fighting file-sharing, embrace it as a competitor and offer a more valuable customer experience, not try to control the experience. More value means more money. And that’s good business.

Work Cited

Doctorow, Cory. “Microsoft Research DRM talk.” Microsoft offices, Redmond. 17 June 2004. 1 Sept. 2008 <http://www.craphound.com/msftdrm.txt>.

Masnick, Mike. Techdirt. 1 Sept. 2008 <http://www.techdirt.com>.

My graduate program at the University of Chicago began this week making me feel very stupid and unprepared (four years of undergrad wasted). Signs of a good year.

I’m excited though. I’ll be studying much of what I blog about here: new media, business models, public policy, etc. While I’m sure school will eat into my attentive blogging schedule, I hope the posts I do make will be extra insightful.

Or I’ll fail out by November. Time to place your bets.

It took a week and a half, but I’ve got my stuff and finally got internet hooked up.  I’ll slowly get back into the blogging routine, in between unpacking and setting up my new life in Chicago.

I bought a new TV (52″ Sony Bravia), got addicted to Prison Break, and beat Final Fantasy III on the DS.

I’ll be playing catch up on Geek-Out Moments for a while.  I’ll be back-dating them so if you’re eager not to miss one, make sure you subscribe to my feed.

I’ve moved into my new place in Chicago, though my stuff is still a week behind. I won’t have reliable internet for another week (I’m writing this post on my cell phone) so posting will still be irregular at best. Of course this happens when StumbleUpon sends me a week of record-breaking traffic. I’ll be updating Twitter for those who just need a Michael Sherrin fix. Anyone?

My life in Boston comes to a close. My cable’s about to be shut off, and I’ll be moving to Chicago, with a stop off at my parents.  Please forgive any haphazard posting over the next week or so as I’m unsure when I’ll have internet access.

It’s sad leaving Boston, my home for five years, most of it as an Emerson undergrad.  Even though I hate the subway system, the roads are insane, and its hard to find great pizza, this was my first home. Now I enter University of Chicago for my graduate studies and even worse pizza (the sauce goes under the cheese).

I’m incredible excited even though I still have like half my apartment to pack.  So I better get back to work.  And keep reading Prodigeek for all my exciting academic achievements, social failures, and pizza explorations.

This fall, I will be pursuing my masters at the University of Chicago. I’ll be studying much of what I blogged about, specifically new media and mass communication.  In three weeks, I’ll move from Boston to Chicago for an exciting new chapter in my life.

Prodigeek will be regularly updated all school year, though my regular columns will be lessened. In addition to all the great content I’ll already write, I’ll also have lots of school assignments to share, so yay for us all.

For now, I’m excited and extremely stressed (I hate moving). I only know three people in the entire city, so if anyone knows anyone, I’m on the friends market.  Other than that, I’m looking to beat several of my few hundred unfinished video games. 100 hours of Oblivion down, only 100 more to go.

This week, Prodigeek celebrates Geek Musicals, from Broadway to the internet to commercial to fan creations.  I’ve got interviews with Joss Whedon about his upcoming internet, musical series, Dr. Horrible’s Sing-Along Blog, Jon & Al Kaplan, the creators of Silence: The Musical (based on Silence of the Lambs) and 24: Season 2: The Musical, and Timothy Smith and Hunter Nolen, the creators of the Star Wars Musical.  So keep checking Prodigeek this week for your Geek Musical fix, even if you didn’t know you needed one.

Next Prodigeek is celebrating Geek Musicals with special articles and interviews, praising the geekiest of geek genres.  From Superman crashing on Broadway to South Park on the big screen to the fan created Star Wars musical, true geeks know nothing makes fantasy and science fiction better than song and dance.

So come back next week for musical fun.

I am sorry for the absences.  There was a death in my family.  In the midst of grieving and traveling and spending time with my family, I couldn’t manage blog posts.  I hope you all (all four of my readers) can forgive me.  I’ll be playing catch up with week with the Geek-Out Moments and will try to get some regular posts out.  Next week will be all back to normal.

Posting on Prodigeek this week will be erratic due to a family matter I must deal with.  Geek-Out Moments will be made up and given chronological dates to maintain organization (I’m not trying to cheat you all).  The 7, Geek Chic, and Geek-Out Game will all return next week.  I thank you for your readership and patience