No-DRM Yahoo MP3 'Experiment' doesn't mean anything

yahoomusic.jpgYahoo and the Majors have done an “experiment” with selling files in an ‘un-protected’ (no DRM) format.  They did it a while ago, but comments of the success of the experiment have been surfacing with Jobs’recent anti-DRM declaration. That means that on the Yahoo music service – which is a subscription, MS-DRM based service, released a few Norah Jones songs in MP3 format with no DRM.

Yahoo and EMI spokespeople have called it a success. They won’t divulge numbers, but they indicate all is well. They don’t indicate that it paves a high-way to MP3 distribution, but they appear happy with the results. 

Unfortunately, I don’t believe the experiment actual proves anything (although I wish it did). Since we don’t know sales numbers, we’ll have to speculate:  let’s say they sold 1 million copies of one of Norah’s singles via the experiment.  There is no way to know that the reason they sold is because it was non-DRM, or because the Yahoo users were going to buy it anyway via Yahoo.

Maybe users were offered two versions on the service, DRM and MP3 and said “This one is open and this one has DRM”.  Then they might have something to point to (ie: 99% of purchasers chose the MP3).  But even then, what does that say?  Was it due to language of the sale, placement of the product, ease of access? 

They can make some assumptions, but since the users are already ‘locked in’ via the subscription model, why would they go elsewhere to purchase the track, and why would they would see a need to buy it in MP3 versus DRM?  They wouldn’t. 

But in general, I think the issue is that anyone who signs up for Yahoo music knows they are getting a subscription and DRM based service, so they are comfortable with that and don’t see a need for getting music in MP3 format.

Now let’s turn it around – what if a service offered ONLY MP3 format (and not DRM) and they started to offer Norah Jones?  The user population would expect it in MP3 format. If you offered Norah in DRM format, the users would simply rebel. However if you offered her music in MP3 format, they would see it as an expansion of the service. 

That’s the direction to go.

Posted on February 13, 2007 in Competition, Market

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