More Steve Jobs and DRM
Posted by: roscivs, in Uncategorized“We’re running out of time. We need to get money flowing from consumers and get them used to paying for music again.”
—Ted Cohen, managing director of a music consulting firm[1]
DRM, or “Digital Rights Management,” is a scheme for controlling what can be done with digital content. (I like the phrase, “DRM manages rights the same way that prison manages freedom.”) The basic idea is this: if I’m a musician (or an artist in a similar medium), I would like to be able to sell my music in a digital format. Digital formats are easy and cheap to distribute and to duplicate. The problem is that digital formats are easy and cheap to duplicate—so why would people buy music from me, when it’s just as easy and cheap to get a copy from someone else?
DRM is an attempt to stop this from happening—to make the content easy and cheap for me to duplicate, but difficult and costly for others to duplicate. Unfortunately, this is not a simple task. The tactic taken most often is to use strong encryption to scramble the data. The problem is that you also want the end-user to be able to unscramble the data as well—which means they need the secret encryption key. This renders the encryption nearly worthless. Bruce Schneier, an eminent cryptologist, had this to say about the problem:
It’s not so much about what people can do, it’s more about how they think. There’s nothing anyone can do; trying to make bits uncopyable is like trying to make water not wet. The sooner people accept this, and build business models that take this into account, the sooner people will start making money again.
So far, people haven’t been very quick to accept this. At the Digital Music Forum where Ted Cohen spoke, all panel members save one believe that some form of DRM is necessary. Also at this forum was a considerable amount of Steve Jobs bashing.
Those of you who read my post about Amoroso, Jobs, and DRM know that Steve Jobs (Apple’s CEO) recently spoke out against DRM as something that “hasn’t worked, and may never work, to halt music piracy.” Furthermore, Steve Jobs stated inequivocally that, “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.”
This caused quite a stir, namely because iTunes has been hailed as one of the few successful uses of DRM. Millions of music files with Apple DRM have been sold. Even more interesting, the Apple DRM is engineered in such a way that songs sold on iTunes can only be played on Apple software—iTunes or iPods. The songs do not work with any third-party software or music players. After a person has amassed a collection of iTunes-purchased songs, they are stuck with Apple and iPod. If they want to switch to a different music player, they have to abandon all the music they purchased. Why would Steve Jobs, after creating such a successful music store, voluntarily give up this lock-in power?
One reason is that he may not really have a choice. The EU and other governments are taking a look at the power wielded by Apple’s DRM and have begun to demand that Apple open up their DRM to other companies, allowing other music companies to sell Apple DRM-protected music that will play on the iPod, as well as allowing competing music players to play Apple DRM-protected tunes. Many, including those at the aforementioned conference, have accused Steve Jobs of being “insincere,” calling his open letter a “red herring.” They believe that Jobs knows that the music companies will never allow him to sell music without DRM protection, and is simply bluffing to get the EU off his back. Steve would never sell music without DRM, they maintain. This is just a PR move—Apple needs DRM to keep people on iTunes and the iPod.
What do I think? Well, first of all I don’t believe that Steve Jobs does anything that isn’t about PR. Steve is first of all a showman, and very good at what he does. But simply because this is good PR doesn’t mean that it’s just lip service. I think Jobs really believes that a world without DRM on music would be better for everyone, and his open letter does a persuasive job of arguing his point.
With DRM, Apple gets a big share of the digital music pie. Without DRM, Apple gets a slightly smaller share of a much bigger pie. All the people who don’t want to buy DRM-encumbered music (either because of ideology, or because they have an mp3 player in their car or a non-iPod model that doesn’t work with Apple’s DRM) are suddenly now in the market. A good portion of them will likely be shopping at the iTunes Music Store.
The real losers here are the music industry, who have backed themselves into a corner and have no easy way out. I like this way of putting it:
Music Industry: We want DRM.
Steve Jobs: You got it. Hey, it only works with iPods as well. Isn’t product tying great!
Music Industry: Can we have more control over our product?
Steve Jobs: Nope.
Music Industry: Oh. Uhm … we’ll leave.
Steve Jobs: No, you won’t.
Music Industry: Oh. Uhm … can you open up Apple’s DRM? This will mean there’s some competition and we can afford to ditch you.
Steve Jobs: Nope. Why would I ever do that?
Music Industry: We’ll make you look like the bad guy.
Steve Jobs: You can try. I made downloadable music viable, produce the gadgets all the cool kids want and I don’t sue children and old ladies. Not only that, but I can plausibly blame all your troubles on you.
The most disingenous statements are coming from the music industry. The best example is from the above article:
Apple has maintained a stranglehold on the digital music industry by locking up iTunes music with DRM.
The music industry is the one with a strangehold on the digital music industry. They can choose who they sell digital music to and under what conditions. There’s nothing stopping them from allowing other music stores to sell music with their own DRM (which they do) that works only on their own music players (which nobody buys because iPods are so popular). In fact, there’s nothing stopping them from allowing other music stores to sell music with no DRM at all, which will work perfectly on every iPod and every other type of music player. They could end Apple’s so-called “strangehold” tomorrow if they really wanted to.
The fact of the matter is that the music industry wants to have its cake and eat it too. They want DRM, but they want DRM that benefits only them, not their resellers. Hopefully, they’ll end up having neither.
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