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Summary:

Or something to that effect. The WSJ is touting a breaking news item that “Steve Jobs calls on music companies to drop antipiracy software.”…

Or something to that effect. The WSJ is touting a breaking news item that “Steve Jobs calls on music companies to drop antipiracy software.” This would place the onus directly on the labels but still allow Apple to continue business as usual. You’ll know more when we do.
Turns out the Jobs’ comments are in a statement posted at Apple.com. He calls it Thoughts on Music but it’s more like the Jobs Manifesto. I’ve never seen anything like this from him but Apple-ologists will know better.
Here’s the gist of the DRM gosopel according to Steve: iPods already play DRM-free music but music sold on iTunes has to have DRM because the major labels want it that way. If the majors didn’t demand DRM, we wouldn’t have it and the Europeans wouldn’t have to pass laws demanding interoperability. He points out that “two and a half of the big four music companies” are European: “Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly.”
In the lengthy piece, jobs highlights the “landmark usage rights” Apple was able to negotiate — five devices, unlimited iPod. But, he writes: “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.” The DRM itself is rooted in secrets — keys that unlock music — and a lot of smart people spen their time hacking those secrets. Jobs: “They are often successful in doing just that, so any company trying to protect content using a DRM must frequently update it with new and harder to discover secrets. It is a cat-and-mouse game.” Apple has been successful at keeping FairPlay updated so far, repairing “a few breaches.”
Now Jobs offers three alternatives:
1) continue as is with “top to bottom” proprietary systems. Jobs notes that even though people complain users are being locked into iPod by purchases that can’t be converted to other systems, under 3 percent of the music on an average iPod — 22 songs — comes from iTunes. “Its hard to believe that just 3% of the music on the average iPod is enough to lock users into buying only iPod in the future.” There’s also no lock in to iTunes, he adds.

2) Apple could license FairPlay DRM to competitors for interoperability. “On the surface, this seems like a good idea since it might offer customers increased choice now and in the future. And Apple might benefit by charging a small licensing fee for its FairPlay DRM.” But once more people know the secrets it’s more likely they will leak, he argues, something made more difficult by the ease with which things spread online. Repairs would become more complicated. “Apple has concluded that if it licenses FairPlay to others, it can no longer guarantee to protect the music it licenses from the big four music companies.” He suggests this conclusion contributed to Zune’s creation.

3) This is where the fun begins — abolish DRM entirely. Jobs, doing his version of Lennon: “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. … Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free.”

  1. It seems like Steve Jobs is just trying to push any criticism of Apples use of DRM on the Record Labels. I feel like he's just stating what we already knew. DRM is restricting, but Apples DRM has made that man a lot of money

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  2. Breathtaking. Astounding.

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  3. <crazy_dream>
    Fourth alternative for Apple: drop the major labels if they continue to insist on DRM. Apple now has considerable leverage with its dominant position in selling online music. How about only featuring independent labels with DRM-free content? Would consumers discover that good music doesn't exclusively come from major labels? Would consumers stick by Apple in an "Apple For DRM Free Music" campaign against the major labels?
    </crazy_dream>

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  4. Kyoruiko (Adam Smith's Son Thursday, February 8, 2007

    Steve is right. Digital downloads, music especially, is still a fairly new commodity. It's pretty ridiculous to start a fairly new market, such as digital music, with highly restrictive, frustrating technology that does not always work as it should. It is an incredible turn off for consumers and surely is doing nothing good for ushering in confidence in "all digital" products.

    The record labels have no idea how to market their product on the internet. And eventually they will pay the price in market share.

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  5. DRM has been successfully deployed on hundreds of millions of computers. Apple has deployed over 1 BILLION DRM'd files with very little flap or mistep. The Microsoft Windows Media Rights Manager technology has literally delivered BILLIONS of licenses since it's inception and is in use by just about every major online retailer and content owner in existence including Universal Music, UFC, American Idol, Walmart, Amazon and the list keeps going. Nobody was complaining about DRM when Apple was enjoying a complete monopoly in the online music space. Only recently as more and more devices support WMRM have popped up did the record labels realize that:

    A. The only way they could sell music directly to consumers was to either sell unencrypted MP3's ala the Norah Jones project which was a complete disaster or sell content using WMRM which does not interop with iPods.

    B. Apple has all of their customers names, email addresses, credit card numbers, CV2 codes, Zipcodes, phone numbers etc and for all the great success iTunes has been for the Music industry at large, they are still back to ground zero in terms of building their businesses online.

    There are two simple outcomes that resolve these impasses.

    1. Apple needs to openly license FairPlay as Microsoft licenses WMRM and port it to their devices like Samsung, Toshiba, LG, AudioVox etc.

    2. The Music industry should not wait for #1 above and take their future into their own hands, license WMRM and move forward. The distribution channel and device market and audience is there and one need look no further than AmericanIdol.com who sold 250,000+ encrypted WMA tracks in one week.

    Steve Jobs is a markeeter at heart and it's clear his recent letter is entertaining to say the least. :)

    Regards,

    Christopher
    2.

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  6. I seriously doubt that Jobs has any intention of eliminating DRM anytime soon or more broadly that he has any concern for the welfare of the consumer.

    As Dave implies above, this is a cynical PR ploy (that appears to have succeeded judging by some of the comments above) to blame the record companies for requiring Apple's DRM scheme, which is currently the subject of antitrust suits in Germany, France, the Netherlands, Sweden, Norway, and several other countries.

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  7. What is all the fuss about DRM? Let's be honest — if music is available for free, nobody is going to BUY it! Saying that CDs didn't have DRM and why we need it now (for online downloads) is an irrelevant point. In fact, it was the CD (combined with internet & compression technology like MP3) that paved the way for mass piracy. So, we need to resolve it.

    There are three types of pirates:

    Type 1: Individuals and institutions who create illegal duplicates for financial gain
    Type 2: Irresponsible and ignorant music fans who "spread" the music by freely exchanging them, putting them on P2P networks
    Type 3: Consumers who don't believe in paying for music and want to get it free from Type 1 & Type 2 pirates above!

    Let's look at the evolution of music technology:

    1. Prior to LPs –&gt; no recordings, only live music, no chance for piracy!
    2. LPs –&gt; recording was done in factories, not available to consumers, so very less or no piracy
    3. Audio Cassettes –&gt; more music could be stored per unit (compared to LP), more portable, recording equipment accessible to consumers –&gt; Increased Type 1 piracy and some Type 2 piracy
    4. CDs –&gt; Easy to store and transport, extremely easy to copy, selected tracks can be copied since random access is possible, very easy to mass-copy with compression technologies like MP3 freely available, very easy to share with a large number of users using internet –&gt; dramatic increase in both Type 1 [some people put free/illegal content on their sites to attract traffic and earn ad revenue) and Type 2 (ignorant music fans who think they are doing a "service" to the society by "sharing") piracy; Type 3 community grows without bounds and "free download" tends to become the de-facto option for acquiring music

    Who says DRM isn't necessary? How do you protect your music if you were someone who has INVESTED his/her money on making music?

    ----

    I have been buying music from both iTunes AND eMusic and I find absolutely no problem with iTunes DRM or no advantages of DRM-less eMusic downloads. What I really care for is:

    - Ease of finding the right music
    - Ease of accessing content metadata (like reviews, user playlists, artist bio, recommendations etc)
    - Ease of downloading and managing the downloaded tracks

    Though eMusic doesn't have DRM, and it is a lot cheaper to buy from there, I still consider iTunes as far superior because it is a "one stop shop" for all music and it is so easy to find what you want... eMusic is designed to let users download AS LESS AS POSSIBLE [obviously, they want your unused subscription money] whereas iTunes is quite the opposite. It is far easier to sample the music on iTunes.

    What Steve Jobs has proven is that more people may like to get the music from "good" places if it is easier and cleaner that way…

    I conclude that there should be some kind of DRM, even if it is not as restrictive as the current technologies, music companies should have a way of identifying Type 1 and Type 2 pirates, who are the souce of all piracy.

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