Music industry executives in Europe feel that continued legal action against file sharers is necessary, but there is also widespread dissatisfaction with DRM models. These findings were published in a report by Jupiter Research last Thursday after an extensive survey of leading music industry executives.

The first segment of the report, obtained by iPodObserver.com, focused on attitudes about legal action against those who illegally share music. Most believe that legal action must continue, but only 19 percent believe that the industry is winning the war against P2P file sharing.

The second part of the report bears strongly on the recent "Thoughts on Music" recently published by Mr. Steve Jobs, Apple's CEO. Executives were asked to agree or disagree with the statements shown in the chart below. Of interest were the questions on dropping DRM on music. Sixty-two percent thought that dropping DRM would drive music adoption and 54 percent thought that current DRM is overly restrictive. Also of interest was the feeling by most that DRM isn't really effective against piracy and that CD burning restrictions are not important.

A key finding by Mr. Mark Mulligan, lead analyst with Jupiter Research, was: "There is consensus that the current DRM model is ‘not fit for purpose,’ and there is strong interest in DRM-free distribution. However, DRM is not about to be dropped by major record labels despite apparent interest within their ranks. For the majors, and most importantly their decision making elements, DRM is the essential means of generating due revenues against usage.

"They are also concerned about high-quality DRM-free files finding their way onto file sharing networks, thus reducing the quality advantage of legitimate services (though CD ripping is a bigger threat). The most likely near-term development is increased usage of unprotected MP3s as a promotional tool (supported by 83 percent of overall respondents and 92 percent of record labels). A longer-term strategy should utilize DRM as rights management rather than rights protection (i.e., use the technology to monitor usage and build revenues around that rather than defining revenue primarily by usage limits)."

The questions were posed to executives from across the value chain, including major and independent record labels, industry and rights bodies, digital stores, and services and technology providers.

In summary, the report suggested that music executives, at least in Europe, are keenly aware of the issues and practicality of DRM on music and that attitudes are slowly changing. In the near term, that will be reflected in free promotional music, but in the long term, the current DRM model is likely to be altered slightly to reflect more realistic expectations and strengthen consumer confidence in digital music.

Source: JupiterResearch -- Copyright © 2000 - 2006 JupiterResearch, a division of JupiterKagan, Inc.