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Jobs Favors DRM-Free Music Distribution
Another anonymous reader tips an essay by Steve Jobs on the Apple site about DRM, iTunes, and the iPod. Perhaps it was prompted by the uncomfortable pressure the EU has been putting on Apple to open up the iPod. Jobs places the blame for the existence and continuing reliance on DRM squarely on the music companies. Quoting: "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."
Dear governments, please Gang-Bang the big studios for us. (Which I believe would be a very nice thing to see)
But make it in proportion to the Gates/Borg icon.
What is amazing to me is that Jobs/Apple have a near monopoly on digital music downloads/players that would only be hurt by a lack of DRM lock-in and yet Jobs is still advocating for the change. Would any other company or CEO do this?
...And when they came for me, there was no one left to speak out for me." - Martin Niemoeller (1892-1984)
Here's the parts I found most interesting:
Apple needs to give record labels the choice of whether they want their music to be sold with or without DRM on the iTunes Store. Keep the same prices, keep the same format and bitrate (128kbps AAC), and keep embedding the user's ID in the file, but give the labels the choice, and indicate it to the customer before they buy (a small icon next to the "Buy" button should be enough).
Obviously most labels will continue to choose DRM. That's OK. Let them. And let the market sort it out.
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If they don't agree to the music industries terms they can't sell music. How does that help the fight against DRM. Being a hugely popular player/store in the world of online music advocating against DRM plays a more important role than just abandoning the market.
...And when they came for me, there was no one left to speak out for me." - Martin Niemoeller (1892-1984)
Not really. MS has just released a new OS that is more locked down with DRM than any other OS so far. They have been active in promoting the use of DRM and even saying it will be to the benefit of consumers. There is no way that they were forced by the industry to implement that much DRM at the heart of their latest product. I'm not hearing any info that Leopard is going to be similarly encumbered. Make no mistake, MS is a wholehearted supporter of DRM.
Jobs on the other hand is actually saying that consumers don't want it, and that they'd drop it in a heartbeat if they were allowed to. This is the complete opposite of what MS are saying, not the equivalent.
Bob
Listen to my latest album here
It's not Jobs' insight that we have to admire, but rather his willingness to not only rationally assess the situation, but also publicly acknowledge the failure of DRM as a means to an end.
In this case, Jobs demonstrated that common sense CAN dominate over greed, even in a corporate environment. Jobs realizes that DRM may lock some users into iTMS, and they might lose some market by dropping it. However, he also realizes that users are growing more irritated with DRM in general. But more importantly, he understands that by abolishing DRM, he can dramatically boost the sales of music online.
Therefore, it is only logical that he supports abolishing this monstrosity - it hurts B&M distributors, while boosting internet sales.
Say what you will of Steve Jobs, he whole-heartedly believes in Apple's products, and in their ability to compete on a level playing-field. How many other companies, owning the sort of market-share that Apple has in digital music, would even countenance changing it ?
And, he's not insane - Apple make their money on hardware, not so much on the iTMS itself - the risk is relatively low for Apple, conversely so for the labels. It is in fact likely to give SJ *more* power in his dealings with the record labels - Apple are the entrenched brand, the shining beacon over the dark landscape of pirated music . Once DRM is gone, the labels will need Apple to be even more on-side than they do currently, because they'll have lost the small measure of control they currently have.
As far as Apple is concerned, it's a win-win. Steve probably expects to lose sales on the iTMS, but that non-DRM'd files would become more-commonly shared, raising the number of people who want a DAP, and given the public's current opinion on which DAP is the best, he feels confident Apple will benefit overall. Still takes some cojones to suggest it, though... A bit like when they cancelled their best-selling iPod model (the original mini) because they had a better version. A traditional business would have milked the mini for all they could, first.
I think the whole RDF is simply that Steve *really* *really* believes in his companies products, that belief shines through in his body language, his tone of voice, his whole attitude. People pick up on that and empathise with it. It's a great sales technique, but it needs products that really change the world to do it. Apple strives to make that sort of product.
Simon.
Physicists get Hadrons!
An Apple lawyer has already said that Apple wouldn't ditch DRM for iTunes even if the labels stopped demanding it.
Because everyone knows that unnamed lawyers quoted in Slashdot postings know a lot more about a company's internal strategy than the CEO quoted on his own damn website.
Apple will blame anyone but themselves and try to spin it so that they don't look bad.
Apple's CEO just said that they will make all the music they sell DRM-free if the labels allow them to. Where is the spin here?
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Okay, poor choice of words. I just meant that they refuse to license it for use in other playback devices.
And why should they? Steve Jobs is obviously a smart guy; things he's said and written elsewhere make me think that he understands the inherent problems behind DRM.
In short, DRM doesn't work. It works, sort of, only by keeping the mechanisms out of sight, and changing them all the time, as people catch on and figure out what's going on "behind the curtain."
The more people you let see behind the curtain, the harder it is to make work, and keep working, even in the shoddy way that it does currently. Licensing means that specifications and technical documents need to be written, and such documents can be leaked (and are far more likely to be leaked when they're being sent to some licensee in Europe, than kept within a particular technical working group inside Apple US). So if Apple licensed out FairPlay, it would mean that FairPlay would get broken more often, and they would have to dedicate more effort to fixing it, and those fixes would be harder to roll-out, because there would be more users, and multiple online music stores, run by various licensees who might take their responsibilities for updates more or less seriously, etc. etc.
DRM isn't a single technology that you can sell. It's not a word processor. It really is defective by design; that's not just some dumb slogan -- that is reality. Anyone who buys a DRM system, thinking that it's a product they can just use, and then forget about, is a fool. A DRM system is an arms race. It can only work when you're committed to throwing a lot of programmers behind it; programmers who are constantly shoring it up, as people pull the bricks down from the outside. And the work that it takes to sustain is directly proportionate to the number of people who are working to crack it.
Licensing out FairPlay would be a losing proposition for Apple on all fronts. It would force them to lose revenue from the iTMS, which isn't exactly a huge profit center anyway -- as others have pointed out, Apple makes a lot more money on an iPod than they do on the average user's iTMS purchases. Plus, it would mean that they would have to spend a lot more effort constantly fixing FairPlay, and it would create a huge logistical problem -- how do you roll out those fixes to users who may be using some licensee's music store? If Apple doesn't keep FairPlay's facade of security up, the music labels will use it as a bargaining point in negotiations, but they'll be dependent on their licensees, who they don't have total control over, in order to maintain that facade. It's a lose-lose for Apple.
Personally, I don't think Apple will ever license FairPlay. I think they'll pull all DRMed music from the European market, and close the iTMS there, before they'd open the can of worms that licensing would entail. Exactly what would happen at that point is anybody's guess, but there are a whole lot of iPod-owning Europeans who probably want some type of online music store, and Apple is pretty good at PR. They might be able to turn it into some sort of a victory against the governments mandating the interoperability, or against the music labels who won't sell DRM-free music. Or it might backfire horribly and cause a lot of people to run out and buy non-iPod MP3 players in order to use competing online stores (though I doubt it; I don't think that the presence or absence of an online store is a huge selling point of most music players, except those linked to subscription services like Napster).
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It sounds like you didn't read Steve Jobs' original message. He explains why licensing DRM to other companies would not work due to the stringent contractual requirements that the music companies have placed on Apple in regards to maintaining the integrity of the DRM system. He also explains that only 3% of the music iPods are capable of storing are DRM'd/from the iTunes store, the other 97% is likely pirated or legally ripped from CDs or other sources. So most people are not locked in since most if not all of the music on their iPods is not DRM'd.
If you read TFA you'll see that Jobs explains exactly why they don't license their DRM. It's because a requirement of their license to sell the music of the record companies is that any holes discovered in the DRM are patched within a certain time limit. He says that by licensing the technology to a bunch of 3rd parties, that there is more chance of a particular implementation of FairPlay leaking out, yet it would still be Apple's resposibility to fix the holes - but this time for more devices and software platforms. The effectively makes it impossible for Apple to submit to 3rd party licensing because they don't have the resources to be able to take on that level of responsibility.
Bob
Listen to my latest album here
It's obviously an all-or-nothing deal. He wants a consistent user experience so that the customer knows what he's getting every time. Microsoft caught shit for pimping the Zune's squirting and then turning around and selling tracks that certain artists didn't want to be squirted. That kind of inconsistency adds complexity. The iTunes store is supposed to be simple. There's no conspiracy here. On average, barely 3% of the music on an iPod is from the iTunes store, so if a customer really wants to move to another player, he's not going to feel "locked in" by 3% of his music collection. If you'd read the damn essay, you'd know that.
This a holding me back at buying music. They are loosing money, while the music I do buy, will be counted in as "DRM free" and will help the 97% to get even bigger.
I would just love it, if they would remove DRM for good. I would probably go from $ 10-20 to $ 100-200 a month, if I could have the ease and speed of downloading it. (this last line was just added to remind the "big four" about what they are missing out on...
Bah.. having read the article myself, I think a better summary would be, Nate Anderson lists some reasons why Apple benefits from DRM, and uses an unnecessarily controversial title as a hook to draw reader attention.
Here's a tip: Nate isn't an official Apple spokesperson. His views and opinions are his own, and have about as much bearing on Apple's strategic goals as yours or mine do. Now, if you can point me to an article that has a single verifiable quote from someone who oficially speaks for Apple saying, "hey, we're right behind DRM," then you might have a point. Otherwise, the best legitimate summary you can get is, "Nate thinks Apple likes DRM."
If you want to see DRM's best friends, look at the RIAA and MPAA. They're the ones who continue to spend tons of money lobbying Congress for laws that would make hardware DRM mandatory in any device that touches any device that could ever potentially touch content. They're the ones who've spent tons of money on markting campaigns that say, "you wouldn't commit genocide against an entire, harmless, sentient species, so why would you consider letting another person watch a rented movie on your HDTV screen without paying us theatre royalties?"
Or perhaps look at the DRM that Microsoft has rolled into Vista. Show me how Apple has loaded its flagship products with restrictions that turn them into crippleware as soon as one sees anything that looks like protected content.
Hell, if you want an opinion piece, try this one: How Apple Could End Up Being DRM's Worst Enemy:
The labels wanted to use DRM to control the consumer's access to content. They'd be happy to legislate away fair use and sell it back to us, impose bullshit like tiered pricing for anything that actually sells, and screw hardware vendors for the infamous $1-per-Zune "because we all know your customers are criminals" fee.
But they can't, because Apple doesn't like those ideas. And the labels famously failed to strong-arm Apple at the last contract negotiation because they need Apple more than Apple needs them. The iPod is the dominant product in the market, and the only way to sell DRM'd content for the iPod is through Apple.
In short, Apple is using DRM to screw the labels harder than the labels have been able to screw the consumer. And the labels are getting so tired of being screwed by Apple. They're so tired, in fact, that they're starting to look at dropping the DRM just to take some of the edge off Apple's market dominance.
Let's be clear here, boys and girls: if the labels do away with DRM, it won't be because they've spontaneously turned into "information wants to be free" idealists. They'll do it because it's hurting their bottom line. And who's the company that's used DRM to hurt the labels's bottom line rather than using DRM to help the labels screw consumers? Apple.
All the ethical rants, consumer hostility, and technological circumvention to date have failed to make the labels back away from DRM. They've only entrenched the labels more firmly in the idea that they need legal control over everything up to and including the consumer's eyes and ears.
If the labels decide to drop DRM, it will be because of how Apple used DRM to screw the labels out of money. Period.
Show me a more effective enemy than that.
I think you're very close to the truth - they don't want to become another record label - they want to destroy the concept of record labels.
Right now Apple shares their revenues with the RIAA 44/65. Apple's costs are on the order of 10 cents, leaving them 34 cents for a song. That's plenty.
The RIAA's 65 gets split something like 5/60 with the artists. They probably have a mechanism to book that 60 as all expenses...
The artist splits his share with his manager, probably like 3/2. So, to tally it all up:
Now, Apple has just done this deal with Apple. They're probably still splitting it 34/65. The Apple Records shell probably keeps 4 of that for management costs, spreading the remainder 8/8/8/6 (6 for Ringo) among the Beetles. Hey, not bad!
So, now Apple can setup a meeting with the newly reformed The Police and say, "hey, fellas...". Ditto every other major band that's coming time for contract renegotiations. They can point out:
They can then show them a different split:
and say, "even without Walmart you'll be making more with us". It's not insignificant that the manager is making 11x his current take in the new business model - he's going to be advising the band on what to do next.
So, you're right, the timing of this letter serves as the official "flipping the bird" by Apple to the RIAA. They apparently think their new business model is now proven and inevitable.
Good luck boys, have fun storming the castle!
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Throughout the discussion here I've noticed one observation conspicuously and repeatedly being ignored for its subtle, but ultimate, relevance to the matter at hand.
Jobs noted the proportion of iTunes Music Store purchases on the average iPod... 2.2%. Note how surreptitiously his real point is being made...
People buying iPods are barely loading them with DRM iTunes.
I'll repeat that... People buying iPods are barely loading them with DRM iTunes.
This should be ringing off alarm bells in your head. Jobs is not a moron. He is very careful to position his RDF in direct relation to how much leverage he inherently possesses over the entity he's selling to... whether the music industry or consumers.
In this case, the data begs, no, screams the obvious... DRM iTunes are an insignificant factor in the usage of iPods. They are a loss leader that may attract some consumers to the concept, but practically anyone buying an iPod discovers, sooner or later, how absurdly easy it is to pop in a CD, rip it, and drop it to your iPod.
Apple stands to lose very little if the record companies fail, once again, to pay attention to the tea leaves that indicate the public isn't buying their artificial attempts at keeping a dying distribution monopoly on life support. Someone suggested Apple has more to lose because if they have no songs on the store, they won't sell iPods. I think the data suggests otherwise. Clearly they sell far more iPod capacity than is used to hold purchased iTunes... which is a good indication that they could continue to sell iPods like crazy without any iTunes Music Store because iTunes without the music store still facilitates a very aesthetically appealing, functional, integrated solution, quality controlled top to bottom by Apple without reliance on third parties for operability assurance.
There's an argument about interoperability but let me remind everyone that a device that doesn't like to talk to other devices still functions in and of itself. A device that doesn't even talk to itself or its own peripherals very well is, however, entirely useless. Interoperability isn't as critical an issue as operability assurance. If you buy a device, you expect that it works. Third party conglomerations of software and hardware very often fail this most basic consumer expectation in too many ways to count. Hence my absolute amusement whenever naysayers play down "it just works" as a superfluous requirement demanded only by design aesthetes. I presume there isn't a consumer of sound mind on the planet who wants their product to "just fail."
In that regard, iPod + iTunes still has strategic competitive advantages of tremendous importance against competing hardware and software.
Jobs isn't being philosophically altruistic in his statement. This isn't to say his action isn't admirable, but to fully understand just what kind of balls he has to come out and deliver such a bold ultimatum to the recording industry, one has to understand the confluence of factors that give support to his assertions.
It was evident as early as the birth of the world wide web that internet distribution of music was an inevitability. Record companies hurried up and did nothing. This is not for lack of foresight. They knew it was coming. But the implications go far beyond piracy. The real fear of opening up the distro monopoly has to do with the realization by recording artists that record companies are now superfluous. Once upon a time, record companies offered promotion, marketing and distribution resources that were largely unmatched. The internet has entirely changed this. The RIAA barrage of lawyers being hurled at every twelve year old and grandmother is not because piracy threatens their bottom line. Artist independence threatens their bottom line. The entire internet threatens their bottom line. But if we put the internet and RIAA on a scale, and factor in growth momentum, the scale tells us that the internet is unstoppable. RIAA also knows this. But t
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