I can’t explain the EXACT reason for writing this post NOW but I’ve had it with the Beta label abuse. Beta used to have a meaning, it marked the beginning of something. It set your expectation level, gave a good young company a break. Actually, I do know…I read the completely uninteresting post in techcrunch about google’s new employee stock option plan …yada…yada…yada….what it made me realize is that “Hey….you ain’t no start up anymore…”.

I run a start up…I have a less the 20 people on board…I am scrambling for funds, when we release a version, its a beta. But google…???…sorry…GOOG, your all grown up now. Yes, you are super cool and your apps rock!…I love gmail, gtalk, calander, picasa…the lot, really BUT please do me a favour, if Gmail is beta…then my first release is preAlpha. There isn’t a letter in the Greek alphabet to describe the stage I’m at with my service if Gmail…a 2 year old (even more) or Google news are still Beta’s. Be brave Google…don’t worry, I will hold your hand…move on (and don’t give me some sh@@#$ about it being a legal reason)
Let me and the other young, new, rough entrepreneurs and our new ‘failing services’ reclaim the beta badge for real. And when we are all grown and mature I promise to move on. Honestly I will…within two years or an IPO …whichever comes first

      

Is the industry finally starting to wash off DRM?  Let’s hope so! DRM cannot EVER work for a few simple reasons:

1. It can’t really stop piracy

2. People find the linkage between track source and MP3 player annoying and unfair.

3. Apple (and Microsoft?) are abusing it to protect iPod (Zune?) sales and not to create a market for music.

The Red Herring reports that iTunes sales have peaked and are now dropping fast. the picture is not better outside iTunes, as noted by the Wall Street Journal:

“Digital track sales held steady at 137 million songs in the second and third quarters of this year, according to Nielsen SoundScan. That’s a slight drop from the 144 million sold in the first quarter”…

Eric Garland, chief executive of BigChampagne LLC, which tracks peer-to-peer traffic, says more than one billion songs are traded over those networks every month. “It took iTunes several years to reach that particular mile marker,” he notes. “The pirate market — if we considered that a market — would command better than 90% of the online marketplace.”

Nick Carr provides a thorough analysis of the decline, including the following:

“A new survey by Forrester Research provides further evidence that iTunes sales may have peaked… It found that iTunes purchases grew rapidly between April 2004 and January 2006, from 2 transactions to 17 transactions per 1,000 households. This year, however, the trend reversed, and sales actually began to slow. According to Forrester, “the number of monthly transactions declined 58%, while transaction size fell 17%, leading to a 65% overall drop in monthly iTunes revenue.”

This doesn’t stop Apple from sticking to DRM policies that prevent people from playing tracks outside their iPod or iTunes. However Apple’s motivation is not to promote music but to protect iPod sales. With MP3 players and cellphones becoming iPod comparables, Apple has been holding back the music business.

But it can’t work. As if tracks are not copied left and right with DRM. Fighting piracy should first deal with the motivation.

DRM are like government regulations. Healthy markets don’t need them, broken markets vacuum them in. Once their introduced, so is an extra motivation to bypass them. While the intention is to protect from abuse, in reality the regulator usually end up choking the market and protecting the abuser.

Perhaps the key is simply with competition stepping up. EMI/Blue Note records and Yahoo appear to be taking a little step in the right direction. The Jazz subsidiary of EMI has began experimenting with selling unprotected MP3 tracks, releasing singles from Norah Jones’ new album to the general public without digital protection. Unlike tracks sold on iTunes, these tracks can be played anywhere -computer, iPod or Cellphone - and can be copied by and distributed to friends.  

A first step en route to realization. The solution is not with DRMing the old economy but with realizing the new economy. ”New” models, such as “all you can eat” subscriptions, value add packages and advertising are simply a much better fit. 

Adds David Goldberg, Vice President and General Manager of Yahoo Music:

“For Yahoo, the deal with EMI represents another step in a long-running effort by David Goldberg, the vice president and general manager of Yahoo Music, to persuade recording companies to abandon their insistence on anti-piracy software. Mr. Goldberg publicly floated the proposal at a music industry conference in February, but initially found few takers.

His reasoning: Anti-piracy software on music isn’t helping the industry because the same music is already available without copy protection on CDs and through Internet file-sharing programs. What’s more, many consumers don’t like the limitations that copy protection imposes on how and on which devices they can listen to their music. If DRM benefits anyone, Mr. Goldberg argued, it’s technology companies like Apple, because it makes it trickier for consumers that have made hefty purchases of digital music through iTunes to switch to non-Apple music devices in the future.

“It just isn’t working,” he said. “It’s not solving piracy. It’s not helping consumers: They view it as a tax.”

And Nick Carr notes how the whole market has been choked:

“The Forrester study provides other clues that, while iTunes may help promote iPod sales, it’s been no panacea for music companies or musicians. Rather than being a central source of new music for consumers, iTunes’s business is dominated by occasional impulse purchases”

Need I say more?