Starting around 2002, the major record labels started going ga-ga for DRM and began including it on just about everything they could find. At first, DRM was only found on promo CDs, to stop the flow of unreleased tracks to the internet, but it didn't take long for DRM to find its way onto just about every commercial release. The problem came to a head in 2005, when it came to light that Sony had included DRM on some of their releases without warning customers (DRM including a rootkit that caused computer security issues). Cue millions of CD recalls and several class action lawsuits. In the end, Sony agreed to do away with DRM loaded CDs - in fact, in the end, everyone did. EMI became the last label to ditch DRM on CDs in 2007.
Getting rid of DRM on CDs was one thing - getting rid of it on digital music files is quite another. As things stand, some music that is sold online included DRM and some does not. iTunes downloads come with DRM embedded, unless you pay an extra 30 cents to get the DRM free version, while other sites, like eMusic, do not. Record labels are making noise that they want to move away from DRM in online music, but that means a battle with online music providers. For instance, Apple likes music files that can only be played by iPods, for obvious reasons. In fact, the battle between the major labels and iTunes over how to distribute music online will have significant ramifications for the whole industry and will partly shape the future of the music business.
What about the Future?
It seems inevitable, however, that labels and providers alike will be forced to go for non-DRM managed music to stay competitive. As more portable digital music players enter the market to challenge iTunes, labels and providers will be forced to sell music that works with all of these players. The only way to sell music that can be played back from a number of different music is to sell DRM free music. What remains to be seen is what methods labels will use to make sure files can't be shared again and again and again, or if indeed they will even try to come up with methods. After all, people have been sharing music since long before the internet entered the equation. Home taping didn't kill music, maybe the internet won't either.