[LINK] Musicload: 75% of customer service problems caused by DRM

Roger Clarke Roger.Clarke at xamax.com.au
Tue Mar 20 19:18:27 AEDT 2007

Musicload: 75% of customer service problems caused by DRM
By Ken Fisher | Published: March 18, 2007 - 05:39PM CT

Deutsche Telekom's Musicload, one of the largest online music stores 
in Europe, has come out strongly against DRM on account of its 
effects on the marketplace and its customers, according to 
German-language Heise Online.

Musicload said in a letter distributed last week that customers are 
having consistent problems with DRM, so much so that 3 out of 4 
customer service calls are ultimately the result of the frustrations 
that come with DRM. In a business where the major music labels expect 
to be paid well for their source material, the costs of supporting 
DRM are borne entirely by the music retailers. If the labels' love 
affair with DRM is hurting the companies trying to make a go at 
selling music online, something is horribly wrong.

According to Musicload, DRM "makes the use of music quite difficult 
and hinders the development of a mass-market for legal downloads." 
The lack of interoperability is unfair to customers and prevents true 
competition between music services, in other words.

Musicload itself is in heated competition in Germany with Apple's 
iTunes Store. Apple's Steve Jobs has come out against DRM as well, 
although his iTunes Store does not offer DRM-free music despite the 
fact that many artists have requested it. A new upstart in the online 
music sales business, Aime Street, has inked deals with a number of 
top artists to do what Apple thus far has been unwilling to do, while 
eMusic has seen moderate success selling DRM-free music from 
independent labels for quite some time now.

Musicload has also tried to differentiate itself by allowing 
independent music labels to sell their music on the service sans DRM, 
and the move has reportedly been a success. Championing the "Comeback 
of MP3," Musicload said that artists choosing to drop DRM saw a 40 
percent increase in sales since December, and that more artists and 
labels are showing interest. The company hopes that DRM-free MP3s 
make a comeback, though there have been few signs that the major 
labels are interested. EMI has been toying with the idea, but the 
company expects resellers like Musicload, Apple and others to carry 
the supposed "risk" by paying increased fees upfront.

Roger Clarke                  http://www.anu.edu.au/people/Roger.Clarke/

Xamax Consultancy Pty Ltd      78 Sidaway St, Chapman ACT 2611 AUSTRALIA
                    Tel: +61 2 6288 1472, and 6288 6916
mailto:Roger.Clarke at xamax.com.au                http://www.xamax.com.au/

Visiting Professor in Info Science & Eng  Australian National University
Visiting Professor in the eCommerce Program      University of Hong Kong
Visiting Professor in the Cyberspace Law & Policy Centre      Uni of NSW

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