Steve Jobs has published a long open letter on iTunes, music, the myth of iTunes “lock-in,” and (most of all) DRM. It’s pretty clear and very cogent, and the part that’s got the Intarwub all a-twitter is this:
The third alternative is to abolish DRMs entirely. 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.
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.
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.
Apple’s taken a lot of heat for using DRM at the iTMS, and for not licensing it elsewhere, but the actual fallout of that turns out to be pretty minimal: the overwhelming majority of music on iPods is ripped, not bought, which means almost nobody is buying into the DRM. Now Jobs is pointing out how broken the idea of DRM is, and he’s by no means alone (archrival Gates said as much in an offhand comment recently, but he’s not the music power that Jobs is).
If Apple manages to drag the music industry into the DRM-free sunlight with this switcheroo move, it’ll be a pretty neat trick. Consider it, though: in retrospect there was no way the RIAA was going to participate in an online marketplace devoid of DRM, so Apple creates one that has perhaps the least onerous terms of any in existence. Apple then makes the iTMS an enormous success — it’s one of the biggest retail outlets for music online or off — and then starts agitating about ditching the DRM. The RIAA is crazy about the revenue, and Apple’s holding all the cards because the music boys have all their eggs in their basket. Nobody else is more than a blip on the radar, but iTMS tracks are only compatible with Apple’s tools. What happens next?
It’s obvious consumers don’t want DRM, but neither does the RIAA want to be beholden to a single vendor like this. Opening the tracks would free both the glorious Heathen hordes AND the RIAA.
Of course, this presupposes that the music industry and the RIAA will behave rationally and realize what business they’re really in instead of trying to protect their existing (and broken) model. We’ll see. No matter what, we’re pretty sure the next steps will be interesting.