A new study by Laurina Zhang at the University of Toronto confirms that Digital Rights Management is not only bad for music fans–it hurts album sales as well.
Digital Rights Management (DRM for short)–the practice of limiting the ways in which digital media can be copied and shared after it is purchased–has long been heralded as a way to limit piracy. The only problem: fans don’t want it. If iTunes charges me $10 for an album I can only listen to on a certain number of devices, and The Pirate Bay gives it to me free with no restrictions, why wouldn’t I download it illegally?
Fortunately, the major online retailers wised up to this in recent years, and now iTunes, Google, and Amazon all offer DRM-free music files.
Zhang tracked album sales for the four major labels before and after the removal of DRM, and found that revenue increased by 10% after the technology was dropped. In short: by trying to force people not to pirate their music, the labels and retailers accidentally led their fans away–possibly to illegal file-sharing.
Interestingly, the spread wasn’t equal. Lower-selling records saw a 30 percent sales jump, while top-sellers weren’t significantly affected. TorrentFreak explains why that might be:
According to Zhang, the 30% sales increase for lower-selling albums can be explained by the fact that DRM-free music makes it easier for consumers to share files and discover new music. The finding that removing DRM from top-selling albums has no effect on sales makes sense in this regard, since the discovery element is less important for well promoted musicians.