February 6, 2007 12:10 PM PST
Apple's Jobs calls for DRM-free music
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Jobs countered arguments made by regulators in Europe that iPod users are locked into iTunes by noting that Apple believes only about 3 percent of songs on any given iPod were purchased from the iTunes store. The rest were ripped from CDs that have no copy-protection technology and can be freely shared between computers and other MP3 players, he said.
"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," Jobs wrote.
Jobs didn't acknowledge this, but even FairPlay has its limitations, McQuivey said. A song bought from iTunes and burned onto a CD, then ripped back onto a computer, loses its DRM protection in the process. Most people don't want to take all those steps, but it illustrates the elusive nature of DRM protections, he said.
Jason Reindorp, marketing director for Microsoft's Zune unit, said that Jobs' call for the "abolition" of DRM without any apparent consideration of the complex balance between what consumers want versus the rights of the content owners "seems to be kind of irresponsible" as well as an about-face.
"DRM is not necessarily the bad guy," Reindorp said, noting that the value of protected content is determined by how the technology is applied and which business models are employed in distributing content. "DRM enables a lot of cool scenarios like subscription music. If you didn't have DRM, those wouldn't be possible."
Another benefit of DRM is that songwriters and publishers can track the sales of their work and not have to depend on compensation coming back to them through the record labels, McGuire said.
Many record company executives are unlikely to be thrilled by the letter, McGuire said. However, there's also the possibility that others within the record industry who have been calling for a change could seize upon the letter as evidence that the current system is broken. The New York Times reported in January that music industry executives at Midem, an annual industry conference, were openly discussing the sale of DRM-free music via the MP3 format.Getting consumers to buy music online
Record executives are coming to the sinking realization that while digital music growth is still fairly strong, it's not growing fast enough to offset plummeting sales of CDs, RealNetwork's Sheeran said. Something needs to be done to get consumers interested in buying music online, he said, and labels appear to be caught between the old ways of doing business and the new reality of the Digital Age.
"That's where the interesting negotiations happen, what happens within the labels," McGuire said. But negotiations are also likely under way between Apple and the record companies for an extension to their iTunes licensing deal, and Jobs' letter could be positioning Apple for the next round of talks, he said.
A representative for EMI Group noted that the company has been experimenting with MP3 files for sale through outlets like Yahoo Music, featuring songs from artists like Norah Jones and Relient K. But he declined to comment beyond that, when asked if EMI was planning to sell more songs without DRM in the MP3 format.
"The lack of operability between a proliferating range of digital platforms and devices is increasingly becoming an issue for music consumers. EMI has been engaging with our various partners to find a solution," the company said later on in a statement.
Other record labels are likely to make similar overtures with DRM-free music, but it's going to be very, very hard for the recording industry to walk away from all the legal arguments it has used justifying DRM and lawsuits filed against file-sharing teenagers, McQuivey said.
A Sony BMG representative had no immediate comment on Jobs' letter, and representatives for Warner Music and Universal could not be reached for comment.
CNET News.com's Ina Fried contributed to this report.
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