Yahoo Exec: "DRM Doesn't Add Value"
By Wes Phillips February 26, 2006 — Speaking at the Music 2.0 conference in Los Angeles on February 23, Yahoo Music's general manager Dave Goldberg startled listeners with a statement probably never previously heard from the head of a for-pay digital music service: Lay off the DRM.

"DRM is not a consumer value proposition, it’s a consumer cost," said Goldberg. "It creates a nice barrier of entry for the tech companies, rather than something that’s beneficial to labels, artists, or consumers."

Most of his talk was hardly revolutionary (listen to it here), but the part that caught our attention was his analysis of how DRM discourages consumers from purchasing legitimate music files, since it imposes restrictions on the use of that music that illegal alternatives do not. In fact, Goldberg joked, when his PowerPoint presentation repeatedly ran into difficulties, "We believe that music should be in my car stereo, in my home, on my phone—anywhere but on my PC, where it could crash on me."

"Record labels don't like to hear this, but consumers have always had access to pirated music that's free. . . . The way to get more money from listeners is to give them a lot more music for their money," he said, promoting subscription-based access to labels' catalogs.

We're not convinced that the future of music is going to be subscription-based. However, record labels today face intense hostility from their customers, who feel they are paying more and more for less and less. Dave Goldberg knows that's no way to grow an industry. Maybe the labels should listen to the other things he knows.