Thoughts on Steve Jobs’ Desire to Abolish DRMs

In a surprise and welcome move, Steve Jobs has posted an article, Thoughts on Music, on the Apple website explaining Apple’s position on Digital Rights Management (DRM) of music purchased online and what it would like to see in the future. For those who think Apple is a megalomanic corporation focused on making money, Steve’s essay will surprise—he calls for the abolition of DRM.

“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.”

Is this all just a ploy to polish Apple’s latterly tarnished public image? No and yes. Even though it is obviously how Apple feels, Steve’s writing and posting of this essay is definitely a response to negative press and blogging that has painted Apple as the bad guy of DRM.

Steve makes several points:

- “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.”
- “DRMs haven’t worked, and may never work, to halt music piracy.”
- “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.”
- “Much of the concern over DRM systems has arisen in European countries.”
- “For Europeans, two and a half of the big four music companies are located right in their backyard.”

Regarding music sold on unprotected CDs, the record companies—Sony BMG in particular—have experimented with copy protection of CD-based music and so are still keen to plug that hole. If they do, then Steve’s call to abolish DRM will lose its clout.

In arguing against DRMs, interestingly he argues that Apple can’t license FairPlay to others, as FairPlay’s secrets would be compromised, meaning the need for it to be modified. FairPlay can already be easily removed from a song by anyone with a CD burner, and yet nothing has been done to prevent that.

Given his position as CEO of Apple, it is no surprise he doesn’t mention how easy it is to remove DRM using a CD burner. I’ve done it myself so I could load and play music I legally own on my Palm—just as I can do with any music I bought on CD.  Makes you wonder, though, how much music that floats around peer-to-peer music sharing systems is actually bought off iTMS. Probably more than we realize.

Today there are three main levels of piracy:
1) People making unauthorized copies of music for their own listening;
2) People sharing copyrighted music through means such as peer-to-peer and burning CDs;
3) People or businesses illegally reproducing and selling copyrighted music.

It is the third that affects the music industry the most, despite claims that it’s the second, which is just because those people are an easy target. In fact, as it’s a form of viral marketing, many musicians nowadays support the idea of people giving copies of their music to friends, with some even actively encouraging it.

But at all three levels DRM can be very easily circumvented. I hardly doubt Apple’s FairPlay—or any other DRM system—has any noticeable impact on any of these forms of piracy of music obtained from online music stores. As Steve said, DRMs haven’t stopped piracy.

So what else is in it for Apple if DRMs were abolished? Consider Steve’s apparent contradiction where on the one hand he states his fear of losing music on the iTMS:

“. . .a key provision of our agreements with the music companies is that if our DRM system is compromised and their music becomes playable on unauthorized devices, we have only a small number of weeks to fix the problem or they can withdraw their entire music catalog from our iTunes store.”

But he then goes on to argue how iTMS purchased music is insignificant in the scheme of things:

“Today’s most popular iPod holds 1000 songs, and research tells us that the average iPod is nearly full.  This means that only 22 out of 1000 songs, or under 3% of the music on the average iPod, is purchased from the iTunes store and protected with a DRM. . . since 97% of the music on the average iPod was not purchased from the iTunes store, iPod users are clearly not locked into the iTunes store to acquire their music.”

Despite the latter assertion, the former carries the truth that iPod sales, despite an average of 22 songs per iPod, would be greatly impacted by the loss of music sales on the iTMS.

Apple gains great leverage off the iTMS and has never made a secret of the fact that it is a vehicle to sell iPods. Steve and Apple clearly believe that discontinuing DRMs would not reduce iPod sales, and you might suspect they even think it could be good for iPod sales. It would also clearly be good for music sales; however, Apple has always stated that it makes nix off music sold on iTMS.

Steve’s article also demonstrates the power Apple now wields. He is obviously confident that, although it might upset a few record company execs, at the end of the day he has got them singing his iTunes—except on the DRM issue.

This is a significant move by Apple and one aimed squarely at the European countries who have been laying the blame for DRM on Apple. Fresh from winning the battle with another European giant of the music industry, Apple Corp, hopefully Apple will also win this battle and we will be able to buy all our music DRM free.