07:27 AM

Jobs welcomes the death of DRM

Steve Jobs blows the lid off the music industry's dirty little secret in an essay called "Thoughts on Music." Actually, it's no secret at all but Jobs' logic is so obvious and clear-headed and so unexpected from someone in his position, it really blows like fresh air.

...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.

... 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.

And he imagines a DRM-free world:

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.

He concludes with a swat at all those European lawsuits against Apple. They are essentially antitrust suits, charging that Apple is unfairly controlling the music market by ensuring that music bought on iTunes can only be played on iPods. But of course this is what Microsoft and Sony do as well. And there's a reason for it, he says. Apple is contract-bound to shore up any holes in its DRM or risk losing the entire catalog. And, since DRM is a cat and mouse game, Apple (and any player) has to control the whole environment.

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. Perhaps this same conclusion contributed to Microsoft’s recent decision to switch their emphasis from an “open” model of licensing their DRM to others to a “closed” model of offering a proprietary music store, proprietary jukebox software and proprietary players.

So much for European calls for licensing of the FairPlay technology. Steve has another suggestion for the European governments:

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.

Cynical? One could argue that Jobs knows this ain't gonna happen and this essay allows him to claim some moral high ground without risking Apple's monopoly. But viewed from another perspective, his is absolutely the most important voice in online music with the power to affect some change in this direction. He has a duty - a corporate duty if not a moral duty - to use that voice in Apple's interest. And what he proposes would not only be good for consumers, it would wildly expand the money-making potential of Apple's music operations.