SDMI has far-reaching implications for record labels and consumers alike. Digital watermarks promise record companies unprecedented control over rights to their music as well as new ways to sell music, including rent to own, try before you buy and subscription.
Thanks to SDMI, you'll see digital downloadable music from top-tier artists fairly soon. Right now, legal MP3 tunes on the Web generally come from little-known artists trying to make a name for themselves by providing free downloadable music. With SDMI in place, the record labels will make music by major artists available for download -- at a fee, of course. But SDMI also raises many new questions. The standard lays down the framework for the industry, but the task of actually implementing the specifications for managing digital rights will be left to the individual companies.
From the consumer side, other issues loom menacingly on the horizon. For instance, what happens when your hard drive crashes and data gets corrupted? You can reinstall software, but what do you do about the lost folder full of music files that cost $500? And if you back up your music to a removable drive and then try to reinstall those music files, will your player reject the files as pirated? No one we spoke to in the industry could tell us how individual sites would handle these types of problems.