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Steve Jobs To Record Labels: Tear Down This Wall!

I got back from the MPAA conference (I'll have more thoughts on that tomorrow) just in time to read a jaw-dropping essay posted on Apple's Web site. In it, Steve Jobs says that DRM--it stands for "digital rights management" but might better serve as shorthand for "digital rights minimization"--software doesn't and can't work, isn't necessary and should be abandoned by the record labels.

I am used to seeing that argument from the likes of Public Knowledge or the Electronic Frontier Foundation--but not from the company that's the world's most successful vendor of DRM-wrapped downloads.

The essay starts with a retelling of the beginning of the iTunes store, including a new detail about the bargain Apple struck to get the major labels to sell their work online:

a key provision of our agreements with the music companies is that if our DRM system is compromised and their music becomes playable on unauthorized devices, we have only a small number of weeks to fix the problem or they can withdraw their entire music catalog from our iTunes store.

(Note: And yet the labels were fine with letting people burn their iTunes songs to audio CD, then re-rip them in an unprotected format. This doesn't quite add up... but the labels, historically speaking, haven't always been the most rational entities when it comes to digital music.)

Jobs then analyzes what might be done about the current problem of "interoperability"--you can play an iTunes download on your iPod, but not on your T-Mobile Dash or your Squeezebox.

Jobs says licensing Apple's FairPlay DRM software to other companies wouldn't work, thanks to that escape clause quoted before--it would be too hard to keep the secrets of FairPlay confidential, and quickly and accurately repairing any breaches would become impossible with multiple hardware and software vendors involved.

Enter Plan C:

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.

(That raises one question: Why not make DRM optional on iTunes tracks now? There are labels that sell DRMed songs on iTunes but offer the same music without DRM on other sites. Does Apple's original deal forbid that too?)

Anyway, the remainder of the essay notes how that the overwhelming majority of music sold today still comes on CDs without any DRM; ergo, the music industry doesn't need this in the first place. (Evidently, Jobs is overlooking the fraction of them that incorporate some form of copying restrictions, like those infamous Sony BMG "rootkit" CDs).

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.

This is all perfectly logical stuff, but it's revolutionary material coming from somebody who helped found the personal-computer industry--and who serves on the board of directors of one of the world's biggest entertainment companies.

Jobs just rolled a hand grenade down that boardroom table. I can't wait to see what happens next.

By Rob Pegoraro  |  February 6, 2007; 5:10 PM ET
Categories:  Recommended reading  
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Next: A Day With the MPAA


To me this makes perfect sense in terms of the Ipod. Jobs has the market saturated regarding the customers that don't care about DRM. But for those who care, like me, Ipod DRM is why I'd never buy an Ipod myself. The DRM, the lack of sharing, that comes with an Ipod is it's major flaw. If Apple wants to expand it's market, it has to somehow get around that.

Posted by: Jonathan | February 6, 2007 6:48 PM | Report abuse

Nice, I dont believe him. DRM is dead. And he tries not to loose his face, thats all.

Posted by: Fisch | February 6, 2007 7:26 PM | Report abuse

For me, DRM-protected music just isn't that big a deal. I easily burn a CD from songs I download from the iTunes Store and play it on my car CD player. All of our downloaded music is on my wife's PC, and I can easily access it over our home network so I can play it on my iBook whenever I want. If I were Steve Jobs, I'd tell Norway to go jump in the lake and pull the plug on the iTunes Music Store there.

Posted by: Dave | February 6, 2007 7:54 PM | Report abuse

Its a great idea.
Its good for everyone.

My question is --
what specific things can we consumers do to help make it happen?

Posted by: Jeff | February 6, 2007 8:26 PM | Report abuse

Jobs is full of bull. Apple mandates DRM to lock consumers in iPods.

Posted by: Mikey | February 6, 2007 9:21 PM | Report abuse

Mikey, do you have any proof? The CEO of Apple just said publicly "We don't want DRM, the labels force us."

He's put his reputation on the line and the best you can do is call him a liar? I think you'll have to do a bit better than that.

Posted by: Todd | February 6, 2007 10:18 PM | Report abuse

I would love to see this happen, but I just don't see it, the record labels are just too short sighted. This would be a win-win for the consumer, the labels and the MP3 player manufacturers, more sales would be made all around.

Interesting that Jobs is promoting the elimination of DRM, even though it could potentially erode sales of iPods.

Posted by: Dan | February 7, 2007 11:06 AM | Report abuse

Very smart (I can hear the Apple lawyers in the open letter)!

This takes much of the heat off Apple regarding the European pressure to open up the iPod specs, and focuses the issue on DRM and the record labels.

Posted by: Myles | February 7, 2007 11:19 AM | Report abuse

ok, 1st support DRM to convince the labels to license their music to apple and then once you own 70% of the market (monopoly) and have enough leverage tell them that it DRM was a bad idea so that you can capture the remaining 30% of users who would not buy an apple otherwise. It sounds like a good business plan and very consistent with the patterns of a company that dominates the market and can dictate the terms of the game...

Posted by: Raul | February 7, 2007 11:49 AM | Report abuse

Remember, this is coming from the guy that manufactures the most restrictive machine and OS on the market. Have you ever tried to buy a MAC that was made by someone other than Apple? That's also why there are no apps available for the MAC - or at least none that are any good in a corporate environment. I guess that's OK, though, if all you want to do is play games or look at the pretty pictures...

Posted by: DT | February 7, 2007 11:59 AM | Report abuse

Seems to me that people are confusing the issues of DRM, which Apple software provides, and flexibility of use, which it also provides.

I simply buy CDs, import into iTunes, and have no problem putting them on my mac and moving them around to any music-listening device, including iPods. I also then have a hard-copy backup of my musical "data".

The key point is that DRM is a necessity (per the content owners) for them to accept iTunes as a distribution medium, not a requirement of the Apple software imposed on all forms of distribution.

Posted by: Jake | February 7, 2007 12:14 PM | Report abuse

Brilliant move by Jobs. re-framing the argument is half the battle.
To all you ipod hold outs: Why do you want to buy these second rate mp3 players, when they are priced the same as the best?

Posted by: Shawn | February 7, 2007 1:08 PM | Report abuse

Not everyone is as happy with the Ipod as Shawn is. I have three in my house and I spend more time trying to fix iTunes issues than I do anything else. I have three computers and iTunes locks each iPod to one of those machines. Big pain if you ask me. I have free reign with my mp3 player to go were I want, when I want and sync up songs. How does that make iTunes and iPod the best?

None of this was an issue when LP's and cassette tapes were the rave. Copying and sharing of music went on all the time. Now that it's easier to do it's suddenly a big issue. There will always be ways of getting around the security. I think the music labels would be better off coming up with a way to accomodate the customer so they don't feel like they are being controlled. I'm not saying give away the product. I'm just thinking that maybe more reasonable pricing for the music might be appropriate. It costs less than ever to reporduce the music yet the pricing keeps going up.

Posted by: Jason | February 7, 2007 1:28 PM | Report abuse

Interesting that DRM-free video for Apple TV was not mentioned.

Posted by: Susan | February 7, 2007 2:30 PM | Report abuse

Just what we needed; another high profile businessman, who jealously guards his own commercial rights, suggesting those of us who create the content he sells, give ours away. I wonder how well his songs and records would sell?

No, Steve. Sell your product (or give it away,) and let us protect and benefit reasonably from ours.

Posted by: Casey | February 7, 2007 3:15 PM | Report abuse

I think that getting rid of the DRM would be good for everyone involved. I purchace music from iTMS, but the overwelming majority of the music in my iTunes is from my cd collection. Technically that music could go in any player. The trouble is that none of the other players works natively with Mac.
The conversation about DRM has been completely one sided because of Apple's market share. What about all the other companies (Microsoft...) that use their own DRM that makes their players not work with Mac. Would they have to share their DRM as well.
It is more likely and would be easier on the consumer if the record compaines sold us the music free and clear and let us deside where to buy it and what to play it on. The soda companies have us paying for bottled water that is readly available from the tap for free. They have been able to market their product in such a way that we buy the bottled stuff anyway. The record companies could be just as clever if they tried.
One last thought. Almost noone buys an iPod for the iTMS. They buy it because it is still the best player on the market, bar none.

Posted by: Jonser | February 8, 2007 2:15 AM | Report abuse

Funny how Microsoft licenses PlaysForSure all over the place, and it has a much better security track record than FairPlay.

Don't buy into the RDF hype. It's not like Jobs just woke up recently and realized that 90% of the music market is already DRM-free. If you think objectively about his reasoning (and timing) for this article, you will see he is not necessarily doing in the best interests of the consumer.

Posted by: Matt | February 8, 2007 2:41 PM | Report abuse

"Plays for Sure", thats a good one. Except on the market leading iPod and on Microsoft's own Zune!!! LOL

Posted by: NGFL | February 8, 2007 6:09 PM | Report abuse

It's not about the iPod. It is about the iPhone. Universal downloads from iTunes form any phone anywhere in the world.

Stephen is so smart.

Posted by: MJS | February 12, 2007 2:23 AM | Report abuse

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