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For Real, DRM no cure for music biz blues

Fine for subs, bad for downloads

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MidemNet Real Networks' CEO Rob Glaser summed up the music business' ambivalence towards DRM this weekend, and said digital music needed the shackles taken off.

Glaser predicted that the first year of DRM-free downloads would be the first year digital overtook physical. And only with DRM-free music would customers get the flexibility they deserved, he added.

"We need to move to a trust model," he said.

Glaser said he expected a "transactional watermark" to supersede DRM within "one to five years".

He still said DRM had a place on subscription services, such as...Real's Rhapsody service.

To get access to a "jukebox in the sky" said Glaser, DRM was reasonable, otherwise people would just pocket the jukebox and never come back.

But then he would say that, wouldn't he?

The tepid adoption of "legal" downloads hasn't matched the fall in physical sales. Illegal downloads still outnumber legals by 40 to 1, according to the big label representatives, although insiders put the figure as high as 100 to 1.

As an indication of how insignificant digital downloads really are to the music business today, Apple's four year slog with its iTunes store has grossed it less than $2bn.

Now check out Steve Gordon's report on the battle over ringtones royalties. Ringtones generated $6.6bn last year of which the labels keep between 20 and 40 per cent, and publishers another 10 per cent. In other words, ringtones in one year alone generated around 150 per cent more than iTunes has managed in four.

No wonder it's so hard to find anyone who thinks this model is the future of music. It probably isn't even the future of iTunes. ®

More stories from MidemNet:

Indies unite to challenge Big Four digital deals

Universal exec - say goodbye to the old record co.

RIAA talks flat fees, and how they turned the French

Microsoft wants Wi-Fi 'filling stations' for Zune II

Providing a secure and efficient Helpdesk

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