New DRM lies of biblical proportions

[David Farber <dave () farber net>]

Begin forwarded message:

From: Barry Ritholtz <britholtz () maximgrp com>
Date: June 21, 2004 6:50:39 AM EDT
To: dave () farber net
Subject: New DRM lies of biblical proportions

Hi Dave,

Brace yourself for a new set of DRM lies of biblical proportions:

You may have read somethings last week about a new copy-protected CD. 
The band, Velvet Revolver, is a supergroup formed from members of two 
very popular bands:  Stone Temple Pilots and Guns N' Roses. The CD shot 
straight to no. 1 on the charts, selling 256,000 copies in the U.S.,  
according to Nielsen SoundScan.

The Music Industry/RIAA flacks have already started spinning dross into 
gold, implying the reason for the CD's success was the DRM from Suncomm 
Technologies (remember them?). This is the company's 12th copyprotected 
CD, and Bertelsmann Music Group's fourteenth CD to feature the 
customer-unfriendly measure.

Not surprisingly, none of the prior CDs were breakout smash hits, or 
even decent big sellers; Certainly, none opened at no. 1. That's not at 
all surprising:  Contraband has been one of the most awaitied and 
heavily promoted albums of the year. Of course, the CD's success had 
nothing whatsoever to do with the copy protection. It was the music and 
the band's built in fan base which are the reasons.

I put up the full details here:  
http://bigpicture.typepad.com/comments/2004/06/industry_spinni.html 
(its a bit too long for IP), One of the more interesting aspects of the 
DRM has been the consumer reaction to it:  At Amazon.com, while the 
reviews are mostly good, a large number of writers savage the DRM 
copyright protection; Several hacks and programs are discussed which 
easily defeat the SunnComm technology.

And yes, the shift key still works to disable it.

I went thru all 268 Amazon reviews, pulling out any interesting DRM 
discussions; They are reposted at the end of the piece (Here:  
http://bigpicture.typepad.com/comments/2004/06/industry_spinni.html)

Here's the oddest aspect of the DRM:  iPod-owning Velvet Revolver fans 
cannot transfer the music from their CDs to their pods unless they 
violate DMCA and hack their CDs. That's right -- if a consumer wants to 
use their legally purchased CDs on their legal MP3 player, they must 
become felons. The same is true for those iPod onwers who buy the music 
on iTunes music store -- it wont work with their pods.

Something is very wrong with this picture.

There's more details here:

Music Industry Spinning DRM Tales
http://bigpicture.typepad.com/comments/2004/06/industry_spinni.html



Regards,


Barry L. Ritholtz
Chief Market Strategist
Maxim Group
britholtz () maximgrp com
(212) 895-3614
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Big Picture:  A blog of capital markets, geopolitics, with a dash 
of film!
http://bigpicture.typepad.com/comments/


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