Digital Rights Management Takes Center Stage At Show

Digital content is changing the music industry and no one knows that more than participants in a Digital Music Forum Wednesday in Hollywood. Just ask executives from Yahoo Music, Sony Corp of America, Sony BMG Music Entertainment, Universal Music, and Napster, among others who gathered to measure the industry's erratic pulse.

Some interesting glimpses into the changing scene could be gleamed from event. In one heated panel discussion, topics ranged talk radio replacing music on the FM dial, digital rights management, and Steve Jobs working with Bill Gates to create interoperability between brands.

In another bold prediction, Dave Goldberg, Yahoo Music's vice president and general manager, said music will disappear from CDs, and talk will replace tunes on FM radio.

"Slowly, music on radio is disappearing into talk, a trend we've seen for the past two years," he said. "In 10 years it will be clear, when we get through the messy part, what the business model looks like."

Sony Corp of America Vice President of Digital media Technology Strategy Alhby Galuten said consumers subscribing to music should have an option to listen to that music in their car, home, and on the cell phone. This means DRM is inevitable. And there are complex problems to solve.

Galuten said Sony is working to promote interoperability to maintain consumers' rights that provides flexible access to content. "It may take awhile, but we will get to a point where consumers won't mind paying for content because it will become flexible and available anytime you want to listen or share," he said.

Suggesting technology has forced the industry to provide governance, Galuten said "We're moving quickly toward higher bandwidth, in some areas 100 megabits, and if I can easily take my 300 Bob Dylan song collection drag them into an e-mail and send it to you and it shows up in about one minute."

During other remarks, Thomas Hesse, president of global digital business at Sony BMG Music Entertainment, said only 6 percent of people download music from legitimate music sites.

DRM would help to promote interoperability, some panelists suggest. eMusic CEO David Pakman said the music industry needs to solve interoperability issues or risk stifling the download industry. "The interoperability issue must be solved for the industry to grow," Pakman said. "A lack of interoperability is not good for the industry. Why should you be locked into one company's business model?"

Amanda Marks, Universal Music executive vice president, said interoperability is the greatest challenge the music industry faces and having one or two closed dominate systems isn't the way to grow the market. "Once you get past the early adopters consumers are confused and that is a barrier to growth," she said. "The big debate is whether other system than Apple will gain enough traction to get Steve Jobs to discuss some form of interoperability."

Napster COO Laura Goldberg said some of those interoperability problems also exist with third-party download services, suggesting Apple's closed platform makes it more difficult than it should be to downloading content.

"I'm not sure how Microsoft will fix inherent problems by putting another layer of technology on top of it," Goldberg said. "I also expect Zune won't work well with Napster and Yahoo solutions, which have been dealing with these problems for years."