Apple calls for abandoning digital rights software
In "Thoughts on Music," an open letter on www.apple.com, Steve Jobs urged record labels to open the digital rights management system that protects MP3s against music theft.
The goal of getting rid of DRM software is to make listening to music easier for consumers. Songs from iTunes could play on other companies' digital devices, and protected music from other online music stores could play on iPods.
"This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat," Mr. Jobs said in his statement.
ig 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."
The FairPlay DRM system was first created by Apple when it launched iTunes, in order to partner with the "big four." Record labels Universal, Sony BMG, Warner and EMI control more than 70 percent of the music business. Apple agreed to protect copyrighted music purchased in an online MP3 format from being illegally distributed and played on unauthorized devices. Apple also agreed to sell DRM encrypted songs that are limited to play five different devices.
In his letter, Mr. Jobs concluded that the DRM-free future is the way to go, concluding that continuing the current state of brand specific purchasing limits consumers and the licensing of the DRM software across systems would breach its security. His argument is based on the fact that iPods play music that is free of DRM, which consumers have acquired from sources like CDs that they own, which can be downloaded in iTunes, and can be played on multiple devices.
He pointed out that 90 million iPods have been sold since its inception, and only 2 billion songs from the iTunes store, which accounts for only 22 songs per iPod sold. Compared to the amount of songs that most iPods hold and figuring that most iPods are close to full, Mr. Jobs speculated that less than 3 percent of the music on the average iPod is purchased in a DRM encrypted manner. As most music sales still come from CDs, which are not DRM-protected, he argued that the DRM software is not really helping record companies, only limiting consumer.
Mr. Jobs is not alone in his thinking of new alternatives for MP3 sales. EMI has been selling open MP3s for Norah Jones and Reliant K on Yahoo Music in the United States, and open MP3s of Lily Allen songs on mobile phones.
"The results have been very positive and the feedback from fans has been great," said Adam Grossberg, spokesman for EMI. "There is an issue of interoperability between platforms, and we're interested in exploring new business models."
Mr. Grossberg would not disclose these new business models, but said simply that the Internet offered new opportunities for monetizing content.
But still not everyone is convinced. Critics argue that record labels would lose sales through illegal copying.
Anthony Delia at Atlantic Records, a subsidiary of the Warner Music Group said that he had no comment on the issue.
Bob Kohn, founder of eMusic and current CEO at digital rights management firm RoyaltyShare Inc. pointed out that his Web site eMusic refused to use DRM when it began because of the incompatibility problem.
"Steve Jobs can immediately eliminate the incompatibility problem by allowing others to make iPod-compatible devices or sell tracks in Apples proprietary iTunes format," he said. "The incompatibility problem is the biggest impediment to legitimate music download sales, and if Jobs sublicensed his intellectual property, then the download business would triple in size overnight."