Posted in Internet Marketing Strategy	April 5, 2007

Avoid driving away users by eliminating DRM

By Adam T. Sutton, Managing Editor, Mequoda Group LLC

EMI Group, one of the recording industry’s four leaders, announced Monday that songs it sells online in Apple Inc.’s iTunes Store will no longer have share-preventing software. EMI’s songs will have better quality, a $1.29 price tag and no Digital Rights Management starting next month.

This is a similar system to what helped make the “big four”—EMI, Sony, Universal and Warner Bros.—billion-dollar businesses. Next month, customers can buy an album online or copy it from a friend, similar to how cassette tapes and CDs have worked for years. Although the distribution channels for sharing digital music are more advanced, the ease of copying a friend’s album is very similar. The Mequoda Group is confident that EMI is setting a trend that the other record companies will soon follow.

Record companies, like any publisher, could expand their paying audience by eliminating DRM from products. Consider the three main personality types for file downloaders:

• Supporters are law-abiding citizens that pay for products because they love the company and want it to prosper.
• Samplers get free products from Supporters or other Samplers. They do not immediately buy a product, because they are unsure of the product’s worth or do not have enough money. Samplers typically get a free product, and if they like it, pay for others when cash is available.
• Thieves will happily pirate products and break DRM systems forever. They consciously never pay for products and have no desire to support artists. This group is best ignored because their will to circumvent DRM—or any copyright protection—is unbreakable.

Looking at these three groups, it’s clear that allowing people to share products can sway Samplers to make purchases. Without sharing, Samplers are not reached, and revenue is lost. If your company sells products with a DRM system, you should consider the impact it has on the users’ experience and if abolishing DRM would widen your customer base.

The Mequoda Group is a firm believer in using free content to drive website traffic and generate revenue. It is one of many methods we describe in the How to Start and Run and Effective Email Marketing System special report. Our report guides publishers through the easy-to-follow steps to acquire, build and monetize customer relationships. Read it and start boosting revenue today.

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