1) Is this a real problem or overblown media hype?
Well, at very least, more than 500,000 people's computers were affected. At worst, millions were. So, I would consider that a real problem. This situation allows one to ask: "Is aggressive copy-protection worth it?" Clearly, IP owners have the unilateral right to take steps to protect their content, provided those methods are within the bounds of the law. (According to the Texas AG, this method appears not to have been.) But is that always the best course of action? In an industry whose sales are down more than 30% over the past four years, is it right to substantially limit consumer functionality protected by law in an attempt to stop piracy?
2) Do you feel Sony BMG's response has been adequate?
I think it has taken them a lot longer than it should have to realize the damage done to consumers by their efforts. Now that they are realizing the extent of the damage and the problems with their approach, I think they are moving forward rapidly to right the wrongs.
3) If you we named the head of Sony BMG tomorrow what actions would you take to restore consumer and artist confidence?
I would reevaluate the whole "lock everything down" strategy. I respect the need for content protections in the digital world. But every one of the 50 CDs they shipped with copy protection STILL were available as unprotected MP3s on the file sharing networks. All you need is one person to defeat the protection, and BANG!, those songs will be everywhere. Given that is the case, why then inconvenience millions of consumers and prevent them from making legal copies in their home for personal use? Better to focus on ADDING value to those consumers who buy your music rather than TAKING IT AWAY.
4) Is the controversy affecting the download sector in general and eMusic in particular?
We haven't seen any effect on eMusic's business as a result of this, except to say that customers appreciate, even more the fact that we sell music without restrictions in the universally compatible MP3 format. There is an alternative, and only eMusic offers it. In fact, we offer at least 14 of the 50 Sony artists whose CDs were shipped with this problem technology on eMusic - WITHOUT DRM and compatible with your iPod!
5) What lasting effect do you believe this will have on the music industry?
Hard to say, except that I am hopeful the major labels will consider the downsides of excessive measures to protect content. Again, I don't argue with the need to do so, but when employed in this aggressive manner, where your best customers are LOSING something and the pirates still get what they way, seems to be a misguided policy.
BONUS QUESTION: What are eMusic and parent company Dimensional working on that excites you the most. (Shameless hype is acceptable.)
eMusic is now the world's number TWO digital music service, selling more than 3M songs a month, and having sold more than 50M songs in the last 18 months. We are the best priced, most diverse, and richest service, super-serving customers who appreciate music beyond the commercial mainstream. I am pretty excited about the advances we have made along the lines of music discovery and all of the great labels with whom we are fortunate enough to work.