University of Toronto researcher Laurina Zhang is working on a paper that appears to prove it is more profitable to sell music online without digital rights management (DRM) protection. Higher revenue would of course benefit all parties involved (record labels and artists) in addition to making it more convenient for legitimate music buyers to manage and consume their digital purchases, but will the industry listen?
The researcher used 5,864 albums from 643 artists in her study, comparing sales before and after each of the four major record labels – EMI, Sony, Universal and Warner – decided to drop DRM. She found a 10 percent increase in revenue after the protections had been removed which also accounts for other factors like release date, music genre and typical sales variations.
Strangely enough, not all albums were affected the same. Zhang found that older releases selling less than 25,000 copies saw their sales increase by 41 percent. Overall lower-selling music saw an increase of 30 percent, too. Removing DRM has no effect on top-selling albums, however. I suppose if people really want new music, they will pay for it and accept DRM.
DRM ultimately did little to curb illegally music piracy and instead hampered those that purchase music legitimately. Fortunately a lot of labels are now realizing this mistake and are doing away with traditional DRM although it is still prevalent in other industries like digital books. Any bets on how long it might take for the book industry to change course?