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Analysis: Apple CEO Steve Jobs Talks of Getting Rid of DRM, But Does He Walk the Walk?

Authored by Jay Baage on February 6, 2007 - 11:32am.
In a manifesto-like document “Thoughts on Music” published on Apple’s website, Apple’s CEO and Co-Founder Steve Jobs addresses critical issues related to digital rights management (DRM) and the future of music. Apple has been notoriously opposed to open standards, but faced with increasing pressure from European nations and other market forces to open up or license its FairPlay DRM technology, Jobs has now done a 180 degree turnabout – well sort of.

Jobs says that he would get rid of digital rights management technology "in a heartbeat" if only the record companies would let him sell unprotected music. Perhaps Jobs could get away with that excuse, were it not for the fact that Apple iTunes is by far the dominant player when it comes to digital music sales. Many bloggers and analysts on Tuesday were quick to point out that Jobs’ implication that Apple is somehow powerless to influence the big four record companies sounds a bit disingenuous. Apple, after all, was the company that revolutionized the industry by convincing the labels to take their content online, as well as getting them to accept uniform pricing.

Jobs suggests three ways forward for Apple right now:

1. Status Quo
The current course of sticking with DRM technology to "protect" media runs the risk of further irritating consumers.
2. License FairPlay
This approach would allow competitors to create devices and services compatible with protected media purchased from iTunes.
3. Get Rid of DRM
Eliminating DRM entirely and selling music in open, licensable formats, would level the playing field and force new business models.

To consumers, the last option is, of course, the most attractive. Jobs says he is more than willing to go along with it and that the labels should, too:

“Why would the big four music companies agree to let Apple and others distribute their music without using DRM systems to protect it? The simplest answer is because DRMs haven’t worked, and may never work, to halt music piracy. 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.”

However, here comes the snag: Steve Jobs does not think that it is his nor Apple’s role to convince the labels to drop DRM-restrictions:

“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.”

The significance of Jobs’ “manifesto” is that he certainly “talks the talk” - saying that he is willing to go along with open standards on iTunes – but he does not “walk the walk”. He openly admits that Apple has no plans to put pressure on the labels to do so, and skirts the issue by stating that “those unhappy with the current situation” should do so instead. After all, Apple’s current system of making money from selling hardware and digital music is quite lucrative right now – even if it does make more than a few Europeans “unhappy”.

Joakim Baage

Poll:
Will 2007 be the Last Year that DRM is used for Selling Digital Music?

Related Links:
Steve Job's Manifesto
Apple CEO Jobs Calls on Labels to Abandon Digital Rights Management
Sweden, Norway, U.K. Petition Apple to Open iTunes to iPod Rivals
The Netherlands Joins European Uprising Against iTunes
Apple Would Ditch DRM 'In a Heartbeat' (DigitalTrends)
A letter from Steve Jobs on DRM: let's get rid of it It (Engadget)

 
tags: Internet | Marketing | Law | Music | Europe | Apple | Commerce | DRM | iTunes | Copyright |



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