Sony easily wins the largest business mistake of 2005 with their DRM strategy.
I won’t go into the details (you can find a good run down here), but the bottom line is that in an effort to curb the “ripping” of certain CD’s Sony decided it was a good idea to install malicious spyware on people’s computers without their knowledge. When you take into account that they’re doing this to customers who purchased the CD and that it can be defeated with a piece of Scotch tape, the only thing they’ve accomplished is to alienate their customers.
Way to go Sony! Whoever is on the PR end of this one is in for a fun time. And I can see additional lawsuits beginning to fly. (I’m just waiting for Sony to sue 3M for creating Scotch tape.) And if they think music sales are down now, I can’t image that this will help matters any.
The lesson we should all learn from this is to listen to your customers and not alienate them. If people want to listen to their music on their MP3 player, let them (especially if you have a division that sells MP3 players). Yes, something needs to be done to curb piracy, but spyware and lawsuits are not the answer. And with the society is going towards “open source” and “creative commons” licensing, it may very well come down to finding different revenue streams or going out of business.