http://gear.ign.com/articles/762/762582p1.htmlSteve Jobs Calls for End to DRM
Apple chief pledges support for open system, calls major labels to abandon losing battle. The RIAA and Norway respond.
by Gerry Block
February 7, 2007 - In an open letter titled "Thoughts on Music" published yesterday on Apple.com (link), Steve Jobs elucidated his, and as such, Apple's perspective on the current landscape of digital music distribution and the role of DRM (Digital Rights Management) software that restricts how and where protected music is accessible. Addressing those who have called upon Apple to open its closed iTunes Music Store—iPod ecosystem, Jobs provided a concise history of how Apple forged relationships with the four major music companies (Sony BMG, Universal, Warner, and EMI) that would allow Apple to sell music online provided the content was controlled via music studio mandated DRM.
The agreement, at the time of its signing was, according to Jobs, a landmark achievement, yet has had the effect of establishing a system in which companies that aim to sell both music and the hardware to play it (Apple with the iPod, Microsoft with the Zune, etc) have chosen closed systems in which propriety and non-interoperable DRMs tie purchased music to each company's own hardware. It is this specific issue that has recently landed Apple in trouble with Norway, which recently declared the proprietary link between iTMS and iPods illegal. Finland has stated its support of Norway's conclusion, and France and Germany are each progressing towards similar pronouncements.
Though Jobs did not cite Norway's conclusions directly, he did make a case that the issue of locking consumers to proprietary hardware is overblown. Citing the number of iPods sold (90 million) compared to the number of iTMS purchased tracks (2 billion) Jobs asserts that the average iPod contains only 22 iTMS tracks that are inoperable with any other mp3 player. He concludes, "…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." Such reasoning does not take into account the millions of outdated iPods not in service, or the very real difference between consumers who rip CDs or acquire non-DRM music from other sources, and those that have made a significant investment in iTMS music due to the system's ease of use. The true issue is not that iPod users are tied to iTMS, but that iTMS users are wedded to the iPod.
Looking forward, Jobs outlines three possibilities for the future. Jobs first imagines the industry continuing on its current course of top to bottom propriety systems, which has thus far, according to Jobs, resulted in "the industry, and customers…being well served." Jobs proposes a second possibility of Apple licensing the FairPlay DRM technology to competitors in order to achieve interoperability. Jobs rejects this possibility on the basis of concern that the secret inner workings of FairPlay could easily be leaked and the system compromised, placing Apple in jeopardy due to a mandated "few weeks" of DRM-vulnerability allowed by the music labels before they are permitted to pull their libraries from iTMS. Patching such a leak would require coordinated effort between Apple and all licensees, the difficulty of which Jobs concludes is prohibitive to the degree of impossibility.
Jobs' essay becomes truly exciting when he analyzes a third alternative future, abolishing DRMs completely. "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." Considering that Apple currently has a near stranglehold of more than 80% of the mp3 player and digital music sales market, leveraged in part (large or small, depending on who you ask) by dint of the closed system enforced by FairPlay, in making such a statement Jobs is essentially offering to expose Apple to a great deal more risk in the market.
Jobs' challenge to the major music labels could be written off were it not for the fact that he spends the remainder of his essay elucidating one of the primary points made by anti-DRM activists like the Electronic Frontier Foundation (EFF) and Defective by Design coalition, namely the fact that 90% of total yearly music sales are CDs, which are essentially DRM-free. Anyone in possession of a music CD can easily rip the content to mp3, wma, aac, or any number of other digital formats, all free of DRM restrictions. With 20 billion songs disseminated to the public completely lacking DRM every year, Jobs questions whether the hassle, maintenance, and consumer frustration based upon DRM difficulties is truly warranted when digital distribution is so small a portion of total music sales. "So if the music companies are selling over 90 percent of their music DRM-free, what benefits do they get from selling the remaining small percentage of their music encumbered with a DRM system? There appear to be none."
Jobs concludes by finally addressing the European pronouncements that likely prompted his essay. "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… Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly."
Jobs' pledge that Apple would support a DRM-free world of digital music distribution is admirable, but is more an effective attempt to reposition Apple in a more neutral stance between the European nations that have deemed the current DRM system illegal and the RIAA and music labels that have vehemently insisted upon the necessity of DRM as the only bulwark against the supposedly rampant piracy that they insist is the cause of declining music sales in recent years. Jobs rejects the RIAA's anti piracy argument, stating in his essay,"…DRMs haven't worked, and may never work, to halt music piracy."
Though the RIAA seems to get its kicks out of skewering single mothers with broods of 8 year old music pirates, when it talks to Steve Jobs it takes a more passive-aggressive approach. Misinterpreting Jobs' conclusion so dramatically as to signify backhanded disdain or extreme cognitive dysfunction, the RIAA responded today by stating: "Apple's offer to license Fairplay to other technology companies is a welcome breakthrough and would be a real victory for fans, artists and labels. There have been many services seeking a license to the Apple DRM. This would enable the interoperability that we have been urging for a very long time." Weighed against the fact that Jobs directly rejected the concept of licensing FairPlay in his essay, it's somewhat difficult to fathom exactly what the RIAA is trying to communicate in this statement.
Norway representatives, on the other hand, were apparently able to grasp the meaning of Jobs' message, even with the additional challenge of a possible language barrier, which doesn't reflect well on exactly how adept RIAA personnel are in reading and writing in their native tongue. Speaking with MacNN.com, Torgeir Waterhouse, senior advisor to the Norwegian Consumer Council, stated "We're happy to see Steve Jobs take on the responsibility that follows from Apple's role as one of the leading companies in the digital sphere and comment on the complaint issued by the Norwegian Consumer Council. Our concern is of course that it's Apple and the iTunes Music Store that should be addressing the issue of record companies and DRM themselves if it needs to be addressed - and as we've stated earlier it's iTunes Music Store that's providing a service to the consumers and therefore has the responsibility to offer up a consumer friendly product."
Responding to Jobs arguments that Apple is not the only company with a proprietary DRM-mp3 player linkage, MacNN quotes Waterhouse, "The fact remains that both iTunes Music Store and others are unfair to consumers no matter how many download services follow the proprietary approach." Waterhouse concludes, "This is really good news - news that should be put into action as soon as possible to bring us all one important step closer to a well functioning digital society."
To what degree Steve Jobs has truly laid down the gauntlet to challenge the music labels to renounce DRM remains to be seen. The absurdity of the RIAA's initial statement leaves the true reaction of the music studios somewhat oblique and possible follow up action completely unknown. Though a business as usual response is probably the most likely, Apple may not have that luxury. Norway has mandated an October 1st deadline for Apple to open the closed iTMS-iPod ecosystem or cease operations in the country.
Stay tuned to IGN for further developments as they occur.
