The statement to be found on the Apple web site including a call to abandon DRM in music, is a direct reaction to the rising anti-Apple tide in Europe. Steve Jobs clearly wants to remove any thought that DRM is an invention of Apple.
It was posted on Tuesday and reminds us all that ‘free’ music formats, such as MP3 can still run on an iPod and most other portable music players, and that any issues addressing DRM should be aimed at the record labels not at Apple.
The tone is that Apple is only carrying out the wishes of the record labels, and that it would be just as successful without DRM. This is of course utter nonsense, because the tie in between the iPod and iTunes is what has made Apple so extravagantly successful. Apple could argue that the record labels never endorsed an interoperable DRM, and so Apple needed to build its own and came up with Fairplay. But that would have meant that iTunes music could have played on other players, and the iPod dream would have been stillborn.
It is a lock-in, and one we don’t have a particular problem with at Faultline since DRM is a necessary evil and lock-ins have been successful in creating technology businesses since time immemorial. But by now iPod is a brand in its own right, and if we were to take away DRM tomorrow (which the record labels would be suicidal to do) Apple would continue to dominate the market.
Jobs points out that a key provision of the deals Apple has done with record labels is that if Fairplay is compromised it has only a few weeks to fix the problem, or the entire catalog can be withdraw.
Jobs asks us to look at three alternatives for the future. Carry on as we are. Apple can license Fairplay to other competitors, with the result being that once the system is compromised, Apple would not know if the break was under its control or outside its control. It risks losing its catalog over someone else’s fault. And thirdly we could abolish DRMs entirely. But that’s the decision of the record labels.
Another piece of evidence he throws up is that most iPod holds 1000 songs, and research tells us that the average iPod is nearly full, but each iPod owner has only bought 22 songs from iTunes. The remaining 97% of the music is unprotected and playable on any player.
He is then entitled to ask, ‘In which case what’s the fuss about?’ since iPod users are clearly not locked into the iTunes store to acquire their music.
Apple toys with this idea of banning all DRMs, and says it’s the best alternative as far as consumers are concerned. But we’ve all been there and down that road lays piracy.
So when Jobs says that if the big record labels are happy to do abolish DRMs then so is Apple, jobs is secure in the knowledge that it’s just never going to happen.
Jobs goes on, ‘Though the big four music companies require that all their music sold online be protected with DRMs, these same music companies continue to sell billions of CDs a year which contain completely unprotected music. That’s right! No DRM system was ever developed for the CD, so all the music distributed on CDs can be easily uploaded to the Internet, then (illegally) downloaded and played on any computer or player.
‘In 2006, under 2 billion DRM-protected songs were sold worldwide by online stores, while over 20 billion songs were sold completely DRM-free and unprotected on CDs by the music companies themselves. The music companies sell the vast majority of their music DRM-free, and show no signs of changing this behavior, since the overwhelming majority of their revenues depend on selling CDs which must play in CD players that support no DRM system.’
Jobs wants the Europeans that are shaking his world to direct their attention to Universal Music, owned by a French company and EMI, a British, and Sony BMG, half owned in Germany.