Tuesday, February 06, 2007

Jobs calls for an end to DRM

Having finally launched the iPhone, Steve Jobs has had some spare time on his hands, and spent some of it having thoughts about music. He's blogged them, or rather, commandeered a page of the apple website to share what he's thought.

And you know what he's thought? That it's about time the labels dropped DRM.

Yes, yes, of course the iTunes music store uses DRM, but, apparently, he'd rather not have to bother:

The rub comes from the music Apple sells on its online iTunes Store. Since Apple does not own or control any music itself, it must license the rights to distribute music from others, primarily the “big four” music companies: Universal, Sony BMG, Warner and EMI. These four companies control the distribution of over 70% of the world’s music. When Apple approached these companies to license their music to distribute legally over the Internet, they were extremely cautious and required Apple to protect their music from being illegally copied. The solution was to create a DRM system, which envelopes each song purchased from the iTunes store in special and secret software so that it cannot be played on unauthorized devices.

Jobs mulls three options for the future - carrying on with Zune stores working for all the Zune players in the world (there are now several, we understand), iTunes selling for iPods, and so on. Clearly, though, Jobs wouldn't be launching a flashy "look at me" initiative if he was merely trying to keep things as they are. He's not from Microsoft.

Option two is for Apple to license the FairPlay DRM to other companies, allowing iPod enabled music to be sold by other stores. Jobs points out that to share the code would be to make the secret DRM somewhat less secret, and probably even less secure.

Option three - what we must now see to be the Apple party line - is surprising and refreshing:
The third alternative is to abolish DRMs entirely. Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat. If the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM-free music on our iTunes store. Every iPod ever made will play this DRM-free music.

Which is quite a pledge.

So, what's Jobs up to? Obviously, he's trying to head off calls for Apple to share FairPlay - indeed, he encourages us to go and badger the record labels to dump DRM instead of badgering Apple to open up the AAC code:
Much of the concern over DRM systems has arisen in European countries. Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free. For Europeans, two and a half of the big four music companies are located right in their backyard. The largest, Universal, is 100% owned by Vivendi, a French company. EMI is a British company, and Sony BMG is 50% owned by Bertelsmann, a German company. Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly.

But isn't this insanity, Jobs calling for an action which would take away the competitive advantage of the iTunes Music Store?

Maybe not. After all, he's in the business of selling players, not music, as his own message makes clear when he sets out to prove iPod owners aren't "locked" into iTMS:
Through the end of 2006, customers purchased a total of 90 million iPods and 2 billion songs from the iTunes store. On average, that’s 22 songs purchased from the iTunes store for each iPod ever sold.

Today’s most popular iPod holds 1000 songs, and research tells us that the average iPod is nearly full. This means that only 22 out of 1000 songs, or under 3% of the music on the average iPod, is purchased from the iTunes store and protected with a DRM. The remaining 97% of the music is unprotected and playable on any player that can play the open formats. Its hard to believe that just 3% of the music on the average iPod is enough to lock users into buying only iPods in the future. And since 97% of the music on the average iPod was not purchased from the iTunes store, iPod users are clearly not locked into the iTunes store to acquire their music.

In other words, Jobs isn't afraid it'll make too much of a dent in the Apple bottom line for there to be competing stores selling interoperable tunes.

But of course, this isn't about DRM free music at all, is it? It's no coincidence this has coincided with WalMart's move into movie downloads. This is using "music labels" as a shorthand for "movie studios".


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