Dave Goldberg to Record Labels: No DRM, Please

Posted by iancr, February 25, 2006 at 2:47 am, in YMusicBlog General.

Dave Goldberg at Music 2.0, 2006

By now you’ve probably seen the news that Yahoo! Music’s General Manager (that makes him my bossman’s bossman), Dave Goldberg, urged record labels to ease back their insistence on DRM yesterday at the Music 2.0 conference. I was in the audience and quite proud to hear such a statement come from the head of the business unit for which I work as I agree wholeheartedly with him (note my post “On DRM” from last June). You can read about Dave’s statements elsewhere (Slashdot, c|net, Digital Music News, Digital Music Weblog, A VC, etc), but here’s a few interesting points/quotes from my notes:

  • On-demand (digital downloads and subscriptions) are not the entirety of the “music business” online. The business of buying CDs, cassettes, digital downloads, etc is about $30B globally, while media supported music businesses (radio, music videos with ads, etc) is about a $40B business globally. Yahoo! Music is in both businesses.
  • Despite tremendous progress of legal, for-pay music services, the mainstream digital media consumer today is still listening to CDs, Internet radio, and using P2P services. 80+ percent of the music on iPods is from ripping and 3% or less is from legal digital services.
  • The playlist is key to Yahoo! adding value to digital music; it’s a unit of currency for users to create and share music with each other. Dave also gave a nod to Web 2.0 at Music 2.0, pointing to Web services as a way we will go “beyond the media player” with our music offerings this year.
  • Exploring ways the music industry could help move the pay market forward, Dave asks the labels to lighten the DRM requirements. “DRM is not a consumer value proposition, it’s a consumer cost. It creates a nice barrier of entry for the tech companies, rather than something that’s beneficial to labels, artists, or consumers.” In the Q/A session after his keynote Dave pointed to eMusic as a service which offers MP3 files as part of their subscription, files which are easily burnable and play just fine on the iPod. Due to restrictions from the major labels we aren’t able to offer hit content in a similar fashion with Yahoo! Music Unlimited. He reminds us that the major labels are selling DRM-free content every day in the form of CDs. I agree with Dave. DRM definitely has a cost, and eMusic is showing that consumers are willing to pay a premium price for unfettered access to digital media. What value is DRM providing in our service? What is the cost? Is it worth this cost?
    What Dave is really asking the labels to do is to experiment along with us to grow legal music services as a category. Legal services are a very small percentage of the downloading activity on the Web, yet studies tell us people *are* willing to pay for high-value content and services. The larger subtext of the “No DRM” message that got headlines is: help us build great legal services for users, don’t hold us back.
  • Yahoo! Music served 4 billion videos last year (which, if you believe another figure that 17B videos were served on the Web last year, Yahoo! Music videos were fully 20% of the Internet’s video traffic in 2005).

Ironically, I went from Music 2.0 to UCLA’s Anderson’s school to participate in a panel about DRM, where I talked way too much. Like Jack White said, “Any man with a microphone can tell you what he loves the most.” That was me. Sorry, y’all.

Oh, and, sorry this damn post took so long. I had to fly up to the Yahoo! offices in Sunnyvale for some meetings today which, after the UCLA thing last night, left me no time to post about this. My loss, I missed a whole day of net buzz and maybe even a /.-ing for ymusicblog. That is teh suck. Damn day job.

ian c rogers
Yahoo! Music

19 Comments »

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  1. Uh, does that mean I get my $60 spent on YMU back?

    No? I didn’t think so.

    Comment by roblord — February 25, 2006 #

  2. I don’t get your question.  The idea isn’t that music should be free, the idea is that people would pay for services even if they didn’t have DRM, like eMusic.
    ian

    Comment by iancr — February 26, 2006 #

  3. I agree. The DRM does appear to be holding back the industry on the whole.

    In the end, it’ll be interesting to see how this pans out. The entire paradox is something I’ve been interested in for some time.

    I’m continually amazed at the fact that the industry continues to resist a legal digital market. If I can buy a CD and rip the tracks and redistrubute them, how is controlling and restricting access to a paid for digital track going to solve the problem of illegal P2P?

    Rather, the availability of a legal, paid for, and safe service to download music would take serious share from the P2P underground.

    Just think of where we would be today if instead of a world-wide witch hunt with a Spanish Inquisition style legal team, the recording industry had reacted differently. Imagine that they had instead jumped at the oppurtunity to create a centralized business model, standards for digital sale and licensing, and everything else to enable the trade of music legally and digitally.

    I don’t hate the music industry, per say, but I think that what we saw was the reaction of hundreds of technologically inept people who had no idea that DRM could even exist, much less that there was a digital market, much more less that there could be money to be had from it.

    And then there’s the view put forth my a good friend of mine:

    “It’s like a five-year-old who gets his ball back after some other child ran off with it in the playground. The music industry is huddled up in the corner with their precious kick-ball and they won’t let anyone touch it. People like Yahoo!, eMusic, Napster, and other music services are going to have to play mother and coax the industry out bit by bit until it decides to share the ball again.”

    Comment by krinderlin — February 26, 2006 #

  4. totally agree. And I think you have to take this position. DRM is hurting more than it’s “helping.” Nearly every technology that has placed limits and restrictions on the freedom to use it has been doomed to fail.

    The music industry somehow thinks that they are in control. That’s a nice little fantasy. They expect us to change our outlook on liberty, instead of them changing their outlook on control.

    The outlook should be about what is best for their customers; for the user. There is a way to create an experience that benefits both the user and the business in this space. Legal, paid, and open.

    Comment by beach — March 1, 2006 #

  5. […] Y! Music General Manager to the labels: “No DRM, please”: not that we have a chance to see something like this anytime soon, but it’s comforting to know that people like Dave Goldberg, who maintain high positions in this business of selling music, don’t think of us as thieves. I’d also like to note the following quote (unrelated to the DRM issue) from Ian C Rogers’ writeup: The playlist is key to Yahoo! adding value to digital music; it’s a unit of currency for users to create and share music with each other. Dave also gave a nod to Web 2.0 at Music 2.0, pointing to Web services as a way we will go “beyond the media player” with our music offerings this year. […]

    Pingback by Briefly: Swap CDs through the mail, Rundfunker WLAN radio, Y! Music GM vs DRM — March 8, 2006 #

  6. […] As you know, we’ve been publicly trying to convince record labels that they should be selling MP3s for a while now. Our position is simple: DRM doesn’t add any value for the artist, label (who are selling DRM-free music every day — the Compact Disc), or consumer, the only people it adds value to are the technology companies who are interested in locking consumers to a particular technology platform. […]

    Pingback by Yahoo! Music Blog » Buy A Customized Jessica Simpson MP3 At Yahoo! Music — July 19, 2006 #

  7. […] In late February 2006 at the Music 2.0 conference, Dave Goldberg, the VP & General Manager, Music at Yahoo! urged the major labels to ease the restrictions that they place on consumers who choose to purchase music from legitimate download services. Goldberg equated DRM as a consumer cost and not a consumer value proposition. […]

    Pingback by the rugs don’t work » Yahoo!, Jessica and DRM — July 21, 2006 #

  8. […] Yahoo is selling the new Jessica Simpson song in MP3 format… however that’s not the big new of this article.  The big news is that the MP3 doesn’t have any DRM built in.  What means for the non-geeks is that you can copy it and play it anywhere, anytime, forever.  That’s a great move for the music industry! As you know, we’ve been publicly trying to convince record labels that they should be selling MP3s for a while now. Our position is simple: DRM doesn’t add any value for the artist, label (who are selling DRM-free music every day — the Compact Disc), or consumer, the only people it adds value to are the technology companies who are interested in locking consumers to a particular technology platform. […]

    Pingback by thisblogblo.ws - Yahoo to sell DRMfree music — July 21, 2006 #

  9. […] It’s just an experiment, but it’s an exciting one. You can buy a personalized version of the new Jessica Simpson song “A Public Affair” at Yahoo! Music. So what? Well, besides the personalization, which means it’ll insert your name, the tracks are MP3s … no DRM. And, as blogged at the Yahoo! Music blog, this is something Yahoo! would love to extend to … well, everything. As you know, we’ve been publicly trying to convince record labels that they should be selling MP3s for a while now. Our position is simple: DRM doesn’t add any value for the artist, label (who are selling DRM-free music every day — the Compact Disc), or consumer, the only people it adds value to are the technology companies who are interested in locking consumers to a particular technology platform. Source: Y!Music Blog […]

    Pingback by DRM-less Music Planned for Yahoo! Music? @ Alice Hill’s Real Tech News - Independent Tech — July 21, 2006 #

  10. […] Og det stopper ikke her. Yahoo! Music’s Dave Goldberg syntes at DRM generelt er en skidt idé og hans kollega Ian Rogers deler entusiasmen: Our position is simple: DRM doesn’t add any value for the artist, label (who are selling DRM-free music every day - the Compact Disc), or consumer, the only people it adds value to are the technology companies who are interested in locking consumers to a particular technology platform. […]

    Pingback by [ indsæt smart navn her ] » Blog Archive » Yahoo! Music kan heller ikke lide DRM — July 21, 2006 #

  11. […] Se la possibilità di acquistare una versione di “A public affair” personalizzata in cui viene inserito il vostro nome nel brano non vi attira, la notizia è comunque interessante per quello che è stato scritto su Yahoo! Music Blog: questo mp3 che si potrà scaricare sarà privo di DRM come da tempo caldeggiato da Dave Goldberg, vicepresidente di Yahoo! e General Manager della sezione musica. […]

    Pingback by Yahoo!: è possibile vendere musica senza DRM? — July 21, 2006 #

  12. […] As you know, we’ve been publicly trying to convince record labels that they should be selling MP3s for a while now. Our position is simple: DRM doesn’t add any value for the artist, label (who are selling DRM-free music every day — the Compact Disc), or consumer, the only people it adds value to are the technology companies who are interested in locking consumers to a particular technology platform. […]

    Pingback by Loudernet » Buy A Customized MP3 At Yahoo! Music — July 21, 2006 #

  13. […] This follows up on a previous blog posting in which he reviews Yahoo! Music’s General Manager Dave Goldberg’s request to the record labels to reduce their insistence on DRM. [insert slow clap here] […]

    Pingback by Harv’s World » Blog Archive » Another battle in the DRM war — July 21, 2006 #

  14. […] Ian Rogers of Yahoo! Music wrote a nice post about the DRM-free offering, which says, in part: As you know, we’ve been publicly trying to convince record labels that they should be selling MP3s for a while now. Our position is simple: DRM doesn’t add any value for the artist, label (who are selling DRM-free music every day — the Compact Disc), or consumer, the only people it adds value to are the technology companies who are interested in locking consumers to a particular technology platform. […]

    Pingback by hello.georgina.org » Oh, the DRMa — July 22, 2006 #

  15. […] Today, I had opportunity to visit Yahoo! Music Blog’s July 19 entry, where not only did they mention the $1.99 Jessica Song in MP3 format, but also mentioned something even more important. As you know, we’ve been publicly trying to convince record labels that they should be selling MP3s for a while now. Our position is simple: DRM doesn’t add any value for the artist, label (who are selling DRM-free music every day — the Compact Disc), or consumer, the only people it adds value to are the technology companies who are interested in locking consumers to a particular technology platform. […]

    Pingback by BambisMusings - Musings from a little deer? » DRM doesn’t add any value — October 29, 2006 #

  16. […] downloads of Jessica Simpson’s single “A Public Affair.” (Yahoo! has already been pushing for an end to DRM for […]

    Pingback by iAdvert.mobi » Amazon to Offer DRM-free MP3 Downloads — May 16, 2007 #

  17. […] recently made a splash criticizing digital rights management. “It’s not solving anything from a piracy perspective,” he repeated again today. […]

    Pingback by VentureBeat » Yahoo’s Dave Goldberg leaves to join Benchmark Capital — August 10, 2007 #

  18. […] Digital Restrictions Management). Ian Rogers posted some really good insight into DRM: As you know, we’ve been publicly trying to convince record labels that they should be selling MP3s for a wh…. Our position is simple: DRM doesn’t add any value for the artist, label (who are selling […]

    Pingback by Steve’s Software Trek » Blog Archive » DRM locks in consumers — November 17, 2007 #

  19. […] is dead on music files and it hasn’t even been two years since Dave Goldberg was the first person “in the industry” to have the balls to say it was ove…. Please tell me we don’t have to go through this same bullshit for […]

    Pingback by Warner Sells MP3s at Amazon at FISTFULAYEN — December 29, 2007 #

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