Media Wonk

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Retail experience preferred - May 18, 2007

Whether it intended to or not, Amazon has provided a valuable lesson in the role retailers could—and probably should—play in promoting the cause of interoperability in the market for digital content and devices.

As I discussed in my previous post, Amazon’s strategy to offer music downloads in the MP3 format without digital rights management will allow the online retailer to sell tracks to the widest possible audience, including the 70% of portable player owners who use iPods, and who, up to now have been the captive dependents of iTunes for access to DRM-protected music.

Although for now that limits Amazon to offering tracks from EMI—alone among the Big Four distributors in embracing DRM-free downloads—and a bunch of indie labels, there’s at least a fair chance that the importunings of Amazon CEO Jeff Bezos, when coupled with Steve Jobs’ convenient about-face on the issue, will eventually wear the others down.

In the meantime, the move has made Bezos a hero among those opposed to DRM on practical or ideological grounds.

“Amazon Sells Freedom,” was the headline on an editorial in the Los Angeles Times. “Rock On, Amazon” exhorted The Motley Fool.

And I’m sure Bezos is happy to accept the mantle.

But I doubt Amazon set out to be a hero (difficult for corporations in any case). It set out to compete, as any good retailer should.

It’s object was not the elimination of DRM per se but the technical interoperability that ensures it can compete on a level playing field with iTunes.

As such, it’s a perspective too often missing from the debate around the use of DRM, and the inter-industry discussions aimed at interoperability.

If copyright owners are serious about encouraging the development of a robust legitimate marketplace for their digital content the best thing they could do for themselves is to ensure open and vigorous retail competition.

Retailers will figure out how to get people to buy because that’s their business. And their businesses will depend on it.

The object of any interoperability strategy should not be consensus among device makers and content owners. It should be to facilitate and encourage retail competition.

Ordinary competitive forces will take care of the technical details.

Retail competition between Amazon and Apple may soon force the record companies to adopt a format that everyone can use. In this case, it happens to be one that is free of DRM, but that is not a necessary condition.

What’s necessary is for retailers be given a chance to do their thing.

 

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