Steve Jobs: We're Ready To End DRM Now

Apple CEO Steve Jobs in a blog post today says his company would embrace DRM-free music "in a heartbeat" if "the big four music companies would license Apple their music without the requirement that it be protected with a DRM."

If that scenario were to play out, Jobs says "we would switch to selling only DRM-free music on our iTunes store. Every iPod ever made will play this DRM-free music."

Jobs continues:

"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."

He then goes into the ROI for music companies, which already sell 90 percent of their tunes DRM free. The biggest return would be that the music industry would have an "influx of new companies willing to invest in innovative new stores and players. This can only be seen as a positive by the music companies."

Fair enough, but we interrupt this recap for a little reading between the lines. Why is Jobs making this post now?

A few reasons:

–Apple is facing a digital music antitrust suit, which may or may not have any merit but will garner headlines. The first part of Jobs post outlines the DRM options–including its FairPlay DRM technology–and walks through the arguments for and against. DRM issues need to be put on the table because they're going to surface in court.

–DRM is just plain silly. Buying a CD and ripping it is still the best way to buy music. And that's a stupid practice. DRM makes it that way.

–Apple is the music kingmaker these days and if anyone can start the "let's end DRM" discussion it's Jobs.

Other notable highlights from the post:

• "To prevent illegal copies, DRM systems must allow only authorized devices to play the protected music. If a copy of a DRM protected song is posted on the Internet, it should not be able to play on a downloader’s computer or portable music device. To achieve this, a DRM system employs secrets. There is no theory of protecting content other than keeping secrets. In other words, even if one uses the most sophisticated cryptographic locks to protect the actual music, one must still “hide” the keys which unlock the music on the user’s computer or portable music player. No one has ever implemented a DRM system that does not depend on such secrets for its operation. The problem, of course, is that there are many smart people in the world, some with a lot of time on their hands, who love to discover such secrets and publish a way for everyone to get free (and stolen) music."
• "Apple, Microsoft and Sony all compete with proprietary systems. Music purchased from Microsoft’s Zune store will only play on Zune players; music purchased from Sony’s Connect store will only play on Sony’s players; and music purchased from Apple’s iTunes store will only play on iPods. This is the current state of affairs in the industry, and customers are being well served with a continuing stream of innovative products and a wide variety of choices."
• "Apple might benefit by charging a small licensing fee for its FairPlay DRM. However, when we look a bit deeper, problems begin to emerge. The most serious problem is that licensing a DRM involves disclosing some of its secrets to many people in many companies, and history tells us that inevitably these secrets will leak."

Comments

[Tom B]

I think Job's post was very strategic. Several countries in te EU are litigating against Apple-- no doubt because Apple is the market leader in downloadable music-- when the real problem is that the record labels that REQUIRE DRM protections. We are talking about companies like EMI and Bertelsmen, which are European concerns, ironically. Perhaps THEY should be the target of overzealous prosecutors.

[Osamede]

"No DRM system was ever developed for the CD." ????

I cant believe Jobs actually said this. There is no DRM for the traditonal Redbook CD, but music stores these days are full of copy protected CD's which do not follow the Redbook spec. And there was a huge scandal last year which was all about Sony violating the law with its CD's installing secret"rooktits&q... on the PC's of people who bought their music. That was all about DRM on CD's.

So Jobs is just flat out wrong on that and that is before you get in to the lots of other holes in his argument.

Bottom line is that even Ipod users buy very little iTunes music on average. Partloy because of the DRM on the music but also partly because what Itunes sells is low quality 128 kbps recordings, well below CD quality and in fact not much different from an FM broadcast. I dont think Apple even sells music in its own pointless proprietary "Apple Lossless" format

So Jobs would rather have DRM-free music to boost sales but I think he will also need to sell decent quality musiic too if he wants to see higher sales numbers via Itunes.

[Frank Z]

It's obvious to me that Apple plans on cutting out the middle man and becoming its own music label. Jobs open letter is just giving the record companies an opportunity to get in before Apple does it itself. Even if Apple doesn't become its own label, the first company that agrees to DRM free music will kill the rest. But by refusing to free the DRM, they're giving Apple cover against and fair trade complaints that come when the record companies get pummeled. It's a very smart move on Jobs' part.