Steve Jobs and the DRM Blame Game

February 8th, 2007

Up till now, Apple Inc. has been the 800-pound gorilla when it comes to digital music, which means they are also the gatekeeper to the most-used digital rights management technology for legal downloads on the planet.

What this means is that lots of competitors and even some European countries are complaining that Apple has locked up the digital music business and needs to relent and give competitors a chance.

But if we can believe Steve Jobs, none of these restrictions are really Apple’s fault. In order to license billions of tunes from the four major labels, they had to agree to some sort of DRM policy to protect the files. That was the price of admission, and Jobs says Apple’s policy is as lenient as they come — except for some independent labels that do not restrict their content in any way when downloaded directly from their sites or some other music services.

In fact, Jobs would rather that there was no DRM at all, that you could buy a track from iTunes and have no restrictions whatever. That would mean, of course, that if you wanted to download that song to a Microsoft Zune, nothing would prevent you. Of course, if you tried to squirt the song from one Zune to another, Microsoft’s own DRM would disable it after three plays or three days, whichever comes first. You see, Bill Gates never met a DRM scheme he didn’t like.

From a logical point of view, it all seems to make sense. After, despite a few failed attempts to prevent copying, the CDs you buy can be freely copied to your Mac or PC, and downloaded to the iPod and other music players. There are no practical restrictions, other than the piracy laws that are designed to prevent you from making your files freely available for download.

Now Jobs straddles both fences. As a board member of Disney, and the largest shareholder in the company, he has a vested interest in protecting their intellectual property. As CEO of Apple, he wants everyone to be able to get music and videos with as few restrictions as possible.

Something has to give, of course. The present DRM model really doesn’t work. Only a small percentage of the content on most iPods comes from iTunes, and I dare say the same situation applies to other music players and the music stores they support. Most people acquire their content from the CDs and DVDs they buy, or the files they acquire in a less-than-legal fashion.

So I have to agree with Jobs, at least in part. Worse, the DRM policy isn’t terribly fair, because it only encompasses a small percentage of the music and video product that’s actually sold. If the music companies truly believe they can control piracy this way, they are sadly mistaken. It hasn’t happened yet, and it won’t happen. Besides, DRM is easy to circumvent if that’s what you want to do.

The problem here is that the music companies are not run by people who live in the real world. The creative people who founded the majors are long-since gone, and they have been replaced by accountants, lawyers and professional managers who haven’t a clue about the creative process, nor how to really package music in a way that will sell more product.

And should we really believe Steve Jobs? Well, he started out as a counterculture person, and I suspect that characteristic is still in his genes despite his years of exposure to the business world. The philosophy that underlies Apple’s approach is, in part, idealistic. Yes, maybe his statement is somewhat self-serving, as a counterpoint to the critics, and those government probes in Europe. If he can shift the blame to others, he won’t have to worry about acceding to anyone’s demands. But it is no less sincere.

But he’s also right. At the same time, he’s shouting at windmills. Even though CD sales continue to drop faster than online downloads increase, it’s doubtful the music companies will get the message anytime soon that they need to change their ways.

They may believe that going to war against some of their customers, suing people who allegedly downloaded or uploaded too much illegal content, will straighten us all out. The fact is that it hasn’t and it won’t.

I suppose you could hope the independent labels will gain enough market share that they will force the majors to reconsider. At the same time, how many of those independents would give everything to be acquired by a bigger label? And then it starts all over again.

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3 Responses to “Steve Jobs and the DRM Blame Game”

  1. Jim C says:

    Steve Jobs needs to follow up his open letter with actions that show he’s sincere: 1) Strip DRM from all the tunes on the music store that don’t require it; 2) use a little icon to flag songs on the store that are “DRM-free” (i.e., use DRM-free as a marketing tool); and 3) put up a dialog box every time someone purchases a song from the store that has DRM on it, something like:

    “This song is encoded with Apple’s Fairplay digital rights management software as required by its copyright holder. Please refer to your license agreement for more details about the restrictions imposed by Fairplay DRM. Do you wish to proceed with your purchase?”

    As buyers become more aware of DRM restrictions, they may decide not to purchase the song when they see this message. Over time, as the sales of DRM-encoded songs diminish, and sales of non-DRM-encoded songs increase, maybe the Big Four will get a clue.

  2. Tom B says:

    In fact, Mac users are locked out SOME content (eg some audio books) by MSFT DRM. Eliminating DRM– and honoring the CUSTOMER– is the right way to go.

    If Norway tries to carry out their feeble and probably unenforceable threats against Apple while ignoring EMI, etc, they will see much backlash from iPod users. Maybe the the US will even smack them down with some well-deserved trade sanctions…

  3. Tom says:

    Well, Steve never mentioned movies in his letter. I suspect this is because DVDs have always had some DRM on them, so his primary argument against the record labels (i.e., that their content has always been sold DRM-free on CDs) does not apply.

    As for removing DRM on songs that do not require it. The iTS does not contain any DRM. The songs there are simply AAC files. They receive a DRM layer in iTunes when they are downloaded. That DRM “wrapper” is then removed by iTunes when the song is transferred to an iPod (so iPods do not even have to do any DRM decoding at all). It’s all handled in iTunes. I think this would make it a bit complex to tell iTunes NOT to DRM a small percentage of songs.

    As for Steve “proving” he’s sincere, he’s on record against DRM long before he posted his letter. The FairPlay DRM is by far the best DRM of them all (which is why it has been so successful, most users are not even aware the content is protected, and that is a Good Thing). And then there’s the letter itself. The fact is the content industry HATES FairPlay, which is why you don’t see movie studios lining up to get in the iTS.

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