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Jobs, DRM and Motives…

Jobs’ open letter, Thoughts on Music, published this morning, has brought the DRM-free music meme to the forefront in a way and scale that only Jobs can achieve. As Fred Wilson points out, perhaps Steve Jobs has had a change of heart when it comes to DRM. Or perhaps not.

We should remember that Jobs is first and foremost a great marketer and PR guy, and the beauty of publishing this letter is that it gets Apple fantastic PR and doesn’t cost the company anything, regardless of the outcome. And he does a great job of passing the blame (deservedly so) for the evils of DRM on to the record labels, where the blame belongs.

Apple already has de facto monopoly share with or without DRM. And historically, they haven’t been willing to open up FairPlay – the fact that I can’t stream my iTMS-purchased content in my home via Sonos or Squeezebox frustrates me on a daily basis. Between heat from the EU and the bad press Apple gets already from “activist” users and journalists who harpoon Apple for being closed and consumer unfriendly, their dominance and their DRM has become a liability.

I’m sure Apple would happily jettison DRM and it would solve some problems for them, though I think it would have minimal impact on the status quo WRT their market dominance, which means that some of Apple’s detractors will linger simply because they are the big gorilla when it comes to digital music.

Jobs wrote this letter for Apple’s benefit, and any positive side effects for consumers are just happy coincidences. This is a clear case of enlightened self-interest. He gets awesome PR and can position himself as the anti-DRM standards bearer, while solving a growing PR problem for Apple, whether or not it actually leads to a world of DRM-free music. Altruism does not necessarily play a part here and Apple wins regardless of the outcome.

Regardless of Job’s motives, which in the end don’t matter as this is a case of “greed is good”, I am encouraged and excited to see this issue in the limelight.

So kudos to Steve Jobs if he’s had a change of heart and now believes in the anti-DRM religion.

And kudos to him if this is all just savvy marketing and self-interest on his part. Either way, he’s brought the issue to forefront, and users benefit.

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February 7th, 2007     Categories: Uncategorized    
  • Tom Higley

    Nice post Ryan. There were several interesting points in Steve’s “Thoughts on Music,” which my son Justin accurately points out would more accurately have been titled “Thoughts on DRM.” Of course, Steve suggests that there are three possible alternatives: stay the course (which means that there will be multiple proprietary music services that interoperate seldom or never); license Apple’s FairPlay (which could mean that Apple’s DRM system become dominant, but as Steve spins the argument means something very different [more on that]); or abolish DRM completely.
    First, Steve although licensing its FairPlay DRM technology is referenced as an “alternative,” what really caught my attention was this
    “[i]f our DRM system is compromised and their [the Major label's] 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.”
    This notion leads to Steve’s adamant assertion that if Apple is forced (e.g., by consumer agencies in the European Union) to license FairPlay to others, all bets are off: “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.” This has the effect of reducing Steve’s “three alternatives” to two: (1) maintain the status quo of proprietary systems (Apple, Microsoft, SONY) that do not interoperate; or (2) abolish DRM altogether.
    I think Jobs is right to suggest that DRM is a lost cause and therefore misguided. The major labels have required it as a condition of their licensing deals with Apple, but they know better than to encumber their own CDs with DRM technology, never mind that ripped CDs produce digital content that is blissfully unencumbered by any DRM scheme. This means, as Jobs points out, that a large percentage of the digital content that floats around in the musical universe comes originally from unprotected CDs. To pretend, then, as the labels do, that DRM applied to iTunes, Rhapsody, eMusic, Napster et al. solves a big problem . . . well it just doesn’t. What it does do is create a set of interoperability problems for digital sales and distribution, problems that those in the music industry would do better to put behind them. The big Myth is that DRM is protecting the music industry from theft. But in reality as long as CDs remain free of DRM, there’s nothing to stop the unscrupulous from redistributing the ripped content. And because a ripped CD track will play on pretty much any device, those tracks have more value than their otherwise identical counterparts downloaded from iTunes or Rhapsody. When CD sales are falling so dramatically, and digital sales are increasing (but not fast enough to make up for the decline in CD sales), it makes little sense to do anything that reduces the demand for digital distribution or creates the perception that a digital track has less value than the tracks on a CD.