Big news this morning: Sony BMG (NYSE: SNE), the company that became infamous for spearheading DRM music through installing software on consumers’ computers that made them vulnerable to viruses, is about to throw in the towel on DRM, according to Businessweek. It’s a small step for Sony BMG towards reconciliation with all the music consumers they have pissed off though the years. However, with all four big record labels now proclaiming that they are going DRM-free, it’s a giant leap towards building a new business that makes sense in a digital world.

He claimed to bring sexy back to the dancefloor, so it's only fitting that Justin Timberlake will be the artist to bring sexy back to the biz. The former Backstreet boy will be the first artist to release a DRM-free song on the Sony BMG label via Amazon (NSDQ: AMZN).

For those of you who regularly attend our Digital Music Forum conferences and read our site and newsletter, it’s old news that even record industry executives believe that the move to DRM-free music was inevitable.

The chocking part of all of this is really that it has taken so long for the major labels to come around and face the music, so to speak. Big-name artists like Madonna and Radiohead have already moved on and found new, more creative companies to help them monetize their music. It still remains to be seen what role that the major labels will play in the financing, promotion and marketing of music in the future.

So what lessons can other media and entertainment companies learn from the whole music industry/DRM debacle? Well, the easiest way is to take the labels reaction to new technology and consumer behavior as a school example of how not to do it. Betting against the future is always bad, just look at what happen to companies that did just that in any industry faced with technological change, from transportation to photography.

For the media and entertainment biz, the next obvious industry to face similar issues as the labels have had (in moving from a packaged goods industry to a service industry) are the movie studios. What is the future of home entertainment – DRM-protected discs or Internet distributed computer files that can be enjoyed by consumers anytime, anywhere, on any device? Do I need to say what I think the answer is?

Joakim Baage

Image by By rebopper