Jobs’ Open Letter on DRM

Interesting open letter by Steve Jobs posted over on Apple.com. It’s neat that Steve is coming out so forcefully against DRM since he sells most of it; he lays the blame on record companies, which is sort of like the car dealer blaming the factory for selling you a lemon car. He may not be the prime mover behind iTunes DRM, but his hands are smudged for sure.

Also, this bit struck me as a little off:

"[The big four major labels] control the distribution of over 70% of the
world’s music. When Apple approached these companies to license their
music to distribute legally over the Internet, they were extremely
cautious and required Apple to protect their music from being illegally
copied. The solution was to create a DRM system, which envelopes each
song purchased from the iTunes store in special and secret software so
that it cannot be played on unauthorized devices….

"However, 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."

I’m not going to call this statement "disingenuous" but it sure seems fishy to me. Burning DRM music to CD then re-importing it as MP3 (presumably so you can play it on other devices) has been a supported mode of operation for iTunes since the beginning. Why, then, haven’t the music labels lowered the hammer?

It’s almost as if the objective wasn’t to prevent piracy, but instead to cause pain for paying customers. It sure isn’t stopping "music pirates," who presumably have figured out that with five minutes and a CD-RW you can legally unprotect any song ever sold on iTunes. But then there’s this:

"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."

That may be true, but since Fairplay is easily and legally circumvented today, keeping Fairplay proprietary seems more than anything like a method of defending an oligopoly (as many, including European regulators, have alleged).

"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
DRM-free music."

This sounds like a far-out utopian vision, but we actually don’t have to imagine. We can just look at eMusic, which competes against iTunes as the #2 online music retailer and just happens to be 100% DRM-free. Of course, there is also the venerable DRM-free CD, as Steve points out next:

"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.

"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 an excellent point, although the pain-in-the-ass factor associated with ripping a CD is more or less the same as the pain-in-the-ass factor associated burning some DRM music to a CD-RW and ripping it back in some sensible format.

"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."

Which is to say, the Norwegians are going to outlaw your product if you don’t fix it. This is the money shot of Steve’s piece. He’s not talking to his customers — he’s not even talking to record companies (who have undoubtedly heard this message from him and every other seller of DRM-disabled music for years now). Jobs is really talking to European regulators.

I wonder if they actually give a hoot?

Update: Tonight’s NY Times story on this has a hilarious quote from an unnamed music industry executive who says "we’re not going to broadly license our content for unprotected digital distribution." Hello! Ninety percent of the music you sell is licensed for unprotected digital distribution, in the form of compact discs. Which is a fact that Jobs actually pointed out in his letter today. Jeez.