Sony Abandons DRM, And It's About Time

By Larry Walsh  |  Posted Wednesday, January 09, 2008 22:01 PM

There's an old saying: "When you're in a hole, stop digging." Apparently that's the advice Sony's music division--Sony BMG--is taking by dropping the digital rights protection (DRM) on compact discs and music files. The move announced this week ends a long--and, at times--embarrassing war the Japanese media company has waged with its own customers and online content pirates.

Sony was a pioneer of the use of DRM technology that prevents the copying and distribution of music files. It also was one of the music companies that bitterly fought and forced the implosion of Napster, which for a brief period was a free music file sharing service.

Like the other record labels, Sony was--and remains--concerned about the impact of Internet privacy on CD and music sales. To thwart would-be music pirates, Sony took a number of measures, including digital watermarks on CDs, encryption keys to prevent copying and sharing music, and the surreptitious installation of software on customer PCs that prevents to copying and distribution of copyrighted music.

Sony's protection measures may have prevented the redistribution of copyrighted music, but did nothing to reverse the slide in CD sales. Media research firm Neilsen reported that 2007 CD sales plunged 15 percent from the previous year, and forecasted continued declines over the next five years.

Sony is the last of the major labels to drop its DRM efforts and adopt MP3 file format for digital music. Ironically, Sony's decision comes around the same time that Napster is making its latest revitalization effort, announcing that it will begin selling MP3 music files without DRM protections.

The abandonment of DRM by Sony, Warren Music and others is reminiscent of Microsoft's software piracy experience in China. The software giant tried suing pirates and pressured the Chinese government to crack down on illegal software distribution, but failed to stem the tide. Eventually, Microsoft accepted that piracy happens, started supporting pirated versions of its software, and started selling its products at a deep discount to make Windows, Office and other applications relatively affordable. The result was more Chinese buying genuine Microsoft products and making China one of Microsoft's biggest and most important markets.

A year from now, the music industry may step back and kick itself for not easing up on DRM sooner--assuming, of course--music sales increase.