Turning Point

I quit my job.

Ok, I didn’t quit like this guy quit or this guy quit. I did the standard two-weeks-I’m-outta-here routine. It’s never easy to leave a job, no matter what the circumstances. I know where I’m headed next, but there’s plenty of time to talk about that in the future.

But this is more than a turning point in my career. It’s also going to be a turning point for this little web site. I’ve been repeating my user-centered design daily affirmations — such as “Do it for your users” “You are not a user” “You have to find out their needs” — every day for the last couple of months, taking it with me to my job interviews and talks with friends.

From these experiences and others I’ve learned that it’s a very powerful philosophy that not enough people understand. I also haven’t given it enough attention on this site. That’s why I’m going to start writing more about it from here on out. It’s a change you’ll notice very quickly, so stick around for the fun new things I have planned.

But I’m not the only one wrapped up in change, and before I depart to my user-centered state-of-mind I’m going to linger in the music world for a moment longer. Apparently lots of folks out there think this year will be a turning point for the use of DRM in digital music stores. I’m not so certain. Let’s look at two big music stories of late.

First, negotiations with EMI (one of the big four music labels) to sell DRM-free music have collaped. Why was EMI looking to sell their music DRM free? Money. This has nothing to do with appeasing music buyers or Steve Jobs. EMI has made some other headlines lately, including:

EMI has been going down for the last few years, facing many of these same profit and restructuring problems before just to face them again. So why pick now to sell the music as MP3s? The cynic in me thought that EMI was doing the MP3 negotiations to boost their stock value, making them some more money in any potential buyout. However, checking their stock performance over the last few months it seems that the market is more interested in the buyouts themselves rather than selling MP3s.

Negotiations ended when, as “unnamed sources” said, the digital retailers wouldn’t pay a big enough advance (that is, money upfront) for EMI’s catalog as MP3s. If they had paid, those retailers would likely need to raise the prices on those tracks to make up for the loss, something they’re not eager to do because of the impact on sales. And if EMI isn’t gonna go MP3, you can be certain the other big labels (Sony BMG, Warner, and Universal) won’t go either.

This just leaves the question about EMI’s fate, if they really are struggling so badly. I don’t know the exact future, but I have a feeling Warner won’t be so forthcoming with an offer now that EMI isn’t going to sell MP3s. That is, a major reason Warner made the offers right now was to stop EMI from selling their music without DRM. The big labels like DRM the way it is, and a DRM-free EMI catalog would force them into MP3 territory as well.

This brings us to the other turning point of late. Steve Jobs wrote an open letter trying to convince the big labels to sell their music DRM free. This is, of course, bullshit. Yahoo, eMusic, and others have been way ahead of iTunes in selling MP3s and in calling for big music to sell their tunes without DRM. (Why? To level the playing field versus Apple, of course.) Jobs — like Apple did with the iPod, iMac, and all things Apple — came out after everyone else did but suddenly made it cool.

I’ve written before about why Apple uses DRM — because the big labels want them to, and there’s no iTunes Store or digital music market without the big labels’ content. But Apple is equally at fault; they have never licensed their DRM to other companies (and the major labels didn’t insist on interoperability when they had the chance). The indie labels have never cared about DRM; most of them already sell their content as MP3s on eMusic (the #2 digital music retailer) among other DRM-free outlets. This debacle is solely about the big four labels and DRM.

So why is Jobs calling for the end of DRM? Things are a bit different now that France and Denmark and Germany and Sweden and Norway have all opened investigations into Apple, their DRM, and anticompetitive practices. Steve Jobs is covering his ass, saying it’s not his fault there’s DRM in the music (true) and it’s out of his hands — and up to the big four — to fix it (bullshit).

Of course, in situations like these you can always expect the market to come up with a solution. DVD Jon, who famously cracked DVD encryption, apparently is pitching a system compatible with Apple’s DRM for anyone who wants to buy it. And in response to Jobs, the big four have shot back that DRM is necessary in light of their declining revenues (due to declining CD sales), challenging Jobs to nix the DRM on the Disney/Pixar movies sold in the iTunes Store if he believes in interoperability so badly.

When it was just France who was considering a bill to eliminate DRM last year, that was no problem for Apple because they could stop selling in France with little impact on their bottom line. Now that Europe has ganged up on Apple, Apple is gonna have to do something to fix this. Not even the combined forces of all the digital music retailers will be enough to convince the big four to sell their music without DRM. It’s Apple’s move if they want to be the ones to decide the resolution to this turning point. Otherwise the EU has it’s own plans for the future of the iPod and the iTunes Music Store, and Apple certainly won’t like that.

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