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Friday, July 25, 2008, 06:40 pm PT (09:40 pm ET)

Yahoo! Music's death at age 3 warns of DRM's risk

Yahoo did its best to stage a rival to Apple Inc.'s iTunes, but after three years of lagging results, the Internet icon is putting its Yahoo! Music service to rest and leaving subscribers with copy-protected music libraries that can't be transfered to new computers.

After trying everything to attract customers from rock bottom pricing and all-you-can-eat subscription specials to news and original programming, Yahoo in an email to customers warned that it would close its Yahoo! Music online store permanently as of September 30th.

While any such store closing is unfortunate for those who shop regularly at the store, the news is proving to be especially damaging for customers of the company's Yahoo! Music Unlimited service, which offers both an all-you-can-eat subscription as well as the option of paying extra for permanent downlods. Yahoo at the end of September will shut down the servers that grant licenses for the digital rights management (DRM) that protects the music files, allowing playback of these longer-lasting songs and barring unauthorized copying.

Although this music will continue to play after the store shutdown, the lack of a license server after that date effectively creates a time bomb for customers: reinstalling the operating system or making other changes that erase the licenses on the computer will render the songs unplayable regardless of the user's backup copies. Yahoo is aware of this and is pushing many of its customers to burn pure audio CDs and remove the restrictions before it's too late.

"We highly recommend that you back up the purchased tracks to an audio CD before the closing of the Store," Yahoo says. "Backing up your music to an audio CD will allow you to copy the music back to your computer again if the license keys for your original music files cannot be retrieved."

The experience underscores the potential risk behind DRM, which by its nature is dependent on a company's willingness to maintain an Internet server ready to authorize access. For customers of Microsoft's long defunct MSN Music service, the experience is already a familiar one: many of its purchasers were threatened with losing their collections a month ahead of Yahoo until public pressure forced Microsoft to keep its DRM servers running until 2011.

It's this danger that prompted two of Yahoo! Music's chiefs to clamor for unprotected music before their departures, though the hesitance of major labels to offer freely copyable music at the time contributed to their departure.

Apple's iTunes Store is unlikely to face the same situation in the future given its relative success in music sales, but its own FairPlay-protected songs hold a similar danger for users who restore or replace their Macs and PCs. The company also has no provision to automatically restore missing songs and usually only grants a one-time exception for those who lose their music without a backup in place.

Still, pressure from Apple and other online providers are making it increasingly unlikely that stores as fragile as MSN Music or Yahoo! Music will reappear. The iPod maker's chief executive, Steve Jobs, has said in an open letter that removing DRM was essential to offering interoperability in music that would eliminate these restrictions and promptly followed suit with unguarded iTunes Plus songs, which now make up a large portion of Apple's catalog. Amazon MP3 and a slew of other stores have taken the same direction and offer some or all of their music DRM-free.