Plugged:
EMI's decision in April to sell digital music without DRM sent shockwaves through the music industry -- garnering headlines, praise, and criticism for the move.

But we are just now starting to see the real method behind the madness. EMI's deal with Burger King to give away free music as part of a promotion by the fast food chain clearly illustrates the broader potential of a DRM-free strategy.

We've seen free music giveaways before, most notably between iTunes and Coke. Due to the iPod's dominance, brands understandably wanted to align with music that could actually play on that device. But by removing the DRM-barrier, EMI can now make promotional deals directly with partners like Burger King and leave iTunes out of the process entirely.

Previously, EMI teamed up with Snocap to make its DRM-free catalog available on the company's MyStores sales app. So now not only can EMI artists sell their own music directly from their own Web sites and social networking pages directly, but their fans can copy the app and sell their music for them as well. It adds a whole new iPod-compatible sales channel unavailable to the other labels still clinging to their DRM religion.

Of course it's all just potential. It will be months before we can really crunch the numbers and determine the effectiveness of these moves.
At this early stage, most press and pundits are watching how EMI tracks sell on iTunes. Totally irrelevant. The whole point of selling music without DRM is to see how it impacts sales and usage on services OTHER than iTunes. And that's where EMI's moves hold promise.

My bet is that by early 2008, another major label will be following -- perhaps tentatively -- in EMI's footsteps.

UnPlugged:
It's time to apply a layer of rationalization to how the music industry deals with YouTube.

Let me be clear, labels have every right and responsibility to demand music videos posted to YouTube be removed until such a time that the service can pay for their use. They even have a case for collecting fees when YouTube members submit homemade music videos or other content that prominently feature their copyrighted work.
But c'mon, demanding the removal of babies dancing to Prince?

Look, I understand there are some heavy implications to how sites like YouTube are ultimately monetized, and record labels shouldn't care much if they take a minor hit on their public image as they play hardball in sorting it all out. But the public uproar that inevitably occurs after labels demand the removal of such benign videos like the dancing babies ultimately weakens their case for the protection of the truly infringing content.

Make one frivolous claim and opponents can paint all your claims with that same brush, which is exactly what the Electronic Frontier Foundation is trying to accomplish by suing Universal Music Group for the Prince example.

Where do you draw the line? Honestly, I don't know. I'm just some reporter throwing water balloons from the sidelines as the music industry struggles to create new business models during a time of unprecedented and disruptive technology.

But if pressed to define the line between infringement and fair use, I'm inclined to use the same phrase used to define porn -- "I don't know, but I know it when I see it."

Now clearly that can't serve as the lasting barometer for evaluating videos on YouTube and other user-generated sites, but I think it should serve as the test by which labels ask for their videos removal from sites, until a more concrete agreement can be forged.

But for now, let the babies dance.

Questions? Comments? Let us know: @billboardbiz

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