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Media (Apple) Media Businesses Encryption Security Apple

Jobs Favors DRM-Free Music Distribution 755

Posted by kdawson
from the not-my-fault dept.
Another anonymous reader tips an essay by Steve Jobs on the Apple site about DRM, iTunes, and the iPod. Perhaps it was prompted by the uncomfortable pressure the EU has been putting on Apple to open up the iPod. Jobs places the blame for the existence and continuing reliance on DRM squarely on the music companies. Quoting: "Much of the concern over DRM systems has arisen in European countries. Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free. For Europeans, two and a half of the big four music companies are located right in their backyard. The largest, Universal, is 100% owned by Vivendi, a French company. EMI is a British company, and Sony BMG is 50% owned by Bertelsmann, a German company. Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly."
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Jobs Favors DRM-Free Music Distribution

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  • by Ariastis (797888) on Tuesday February 06, 2007 @03:45PM (#17910380)
    Dear governments, please Gang-Bang the big studios for us. (Which I believe would be a very nice thing to see)
    • by Workaphobia (931620) on Tuesday February 06, 2007 @05:08PM (#17912022) Journal
      No, no, no. In capitalist America, Big studios Gang-Bang YOU!
  • mod jobs up (Score:5, Insightful)

    by swschrad (312009) on Tuesday February 06, 2007 @03:45PM (#17910382) Homepage Journal
    finally, somebody in the business had a shot of insight.
    • Re:mod jobs up (Score:5, Insightful)

      by TheMeuge (645043) on Tuesday February 06, 2007 @03:54PM (#17910556)
      It's not Jobs' insight that we have to admire, but rather his willingness to not only rationally assess the situation, but also publicly acknowledge the failure of DRM as a means to an end.

      In this case, Jobs demonstrated that common sense CAN dominate over greed, even in a corporate environment. Jobs realizes that DRM may lock some users into iTMS, and they might lose some market by dropping it. However, he also realizes that users are growing more irritated with DRM in general. But more importantly, he understands that by abolishing DRM, he can dramatically boost the sales of music online.

      Therefore, it is only logical that he supports abolishing this monstrosity - it hurts B&M distributors, while boosting internet sales.
      • Re:mod jobs up (Score:5, Insightful)

        by 99BottlesOfBeerInMyF (813746) on Tuesday February 06, 2007 @04:23PM (#17911138)

        In this case, Jobs demonstrated that common sense CAN dominate over greed, even in a corporate environment.

        I disagree. Oh, I think banning DRM from media companies is good for everyone, but I think in this particular instance getting rid of it benefits Apple more than keeping it. Right now Apple faces the possibility that they will no longer be able to leverage the iPod to promote FairPlay. Since MS can still leverage Windows to promote PlayForSure, that means if Apple is forced to take this action Apple will lose (as will consumers) as MS eventually monopolizes that market segment as well. Job's press statement capitalizes upon all the bad press they have been getting lately and turns it from a liability to a benefit. Instead of looking like a greedy exec, he takes the people's side against DRM in general, which would leave a relatively level playing field and the iPod and macintosh computer could both compete on their merits (something Apple is not afraid of). Considering a likely alternative is Apple being forced to license FairPlay, while MS is not forced to allow any given party to license PlaysForSure or whatever they decide to bundle, this is not common sense over greed, but common sense that happens to coincide with greed.

      • Re:mod jobs up (Score:4, Informative)

        by nine-times (778537) <nine.times@gmail.com> on Tuesday February 06, 2007 @05:42PM (#17912722) Homepage

        I don't think it's a case of Jobs suddenly realizing DRM is bad and becoming a generous benefactor by disregarding his greedy interests. First, he's been against DRM from the beginning. It's come up again and again, and I don't know whether any public statements have been made before, but by all accounts Steve Jobs did not want DRM on iTMS. The record companies just required it.

        Second, by most accounts, Apple doesn't make much money off of the iTMS anyhow. They roughly break even. It's a marketing issue, to promote the iPod, and that's pretty much it. Third, even if Apple did make money from the sales, they don't need to make much. While record companies are spending money to actually produce the music, Apple only needs to make enough to cover their costs of running the store. Therefore, Apple doesn't need to worry very much about piracy.

        So even if Apple took a small loss on the iTMS, it might be worth it for marketing purposes. However, keeping the DRM hurts their PR, and it's probably a nightmare to manage, keep up-to-date, etc. Plus, they've lost the business of people who might have purchased from iTMS, but who won't because of the DRM. DRM is a net loss for them, I'm sure.

    • It's easy to blame the record companies for DRM but why does the iTunes store apply DRM to ALL of their music? ... Even music where the record company/publisher does not request or require DRM?

      Could their be an advantage to Apple by locking ALL the music to their iPod?

      • by mollymoo (202721) on Tuesday February 06, 2007 @04:31PM (#17911306) Journal
        The big 4 say iTunes has to to DRM everything, or they can't sell their music. Same goes for pricing. The big 4 won't let iTunes sell other people's music for less.
      • It's hard to say, but two immediate problems come to mind. First, and in my opinion most likely, is that they have in place agreements with the major record labels that involve giving the same treatment to all music sold via the iTMS, so that it all has to be FairPlayed. This strikes me as pretty likely, and something that the record labels would insist on; they must realize that online distribution closes a lot of the gap between a small record company, and them, and obviously they want to avoid direct competition as much as they can. So they'd want to suppress anything that a small, independent company could use as an advantage. Hence, demand that Apple apply the same "protection" to all iTMS-sold music.

        The other problem, which isn't exclusive of the first, is that the DRM isn't applied once to each song in the store when it's being added to the database, but added at the time of sale (necessary because it's encrypted with a key that's specific to each user), somewhere on Akamai's servers. It might be difficult to the point of being cost-prohibitive to designate one song as being DRM-free, if the system wasn't designed with that capability from the beginning.

        I've noticed that even songs that are free downloads (promo songs, etc.) from the iTMS have FairPlay placed on them, even when you can go to the band's or label's web site and download it as an MP3 (so it's obvious that the label doesn't care if it's protected); this makes me suspect that one or both of those problems exist.

        It would probably be trivial for Apple to turn off DRM completely, for all the songs in the Store, but difficult both legally and technically, to disable it for just one.

        (I'm not trying to sound like too much of an Apple apologist here, to be frank I think the iTMS is an abomination and I wish Apple had stood up to the record companies when they were screaming about the iPod and contributory infringement a few years ago, and remained a purely hardware company and stayed out of the music-retail business; however, at the time creating the iTMS was the best way of eliminating accusations of the iPod as a "piracy machine." It's ironic that Apple's own creation, created to soothe the record companies, is now coming back to haunt them. Well, that's what you get for dealing with the devil.)
        • by Daniel_Staal (609844) <DStaal@usa.net> on Tuesday February 06, 2007 @04:56PM (#17911736)

          The other problem, which isn't exclusive of the first, is that the DRM isn't applied once to each song in the store when it's being added to the database, but added at the time of sale (necessary because it's encrypted with a key that's specific to each user), somewhere on Akamai's servers. It might be difficult to the point of being cost-prohibitive to designate one song as being DRM-free, if the system wasn't designed with that capability from the beginning.
          Actually... iTunes adds the DRM after it is downloaded. I'm not sure whether that helps or hurts your argument though: It means that it is less server-intensive, but it also means that putting in a flag for 'don't DRM this file' would be much easier to abuse.

    • Re: (Score:3, Insightful)

      by CDarklock (869868)
      I work at Microsoft on Vista, and I've been telling people this for months. If you'd rather listen to Steve Jobs, fine, but you can't pretend he's the only one saying this.
  • by IANAAC (692242) on Tuesday February 06, 2007 @03:47PM (#17910416)
    One with Jobs sporting a nice, glowing halo?

    But make it in proportion to the Gates/Borg icon.

  • by Zelet (515452) on Tuesday February 06, 2007 @03:49PM (#17910446) Journal
    What is amazing to me is that Jobs/Apple have a near monopoly on digital music downloads/players that would only be hurt by a lack of DRM lock-in and yet Jobs is still advocating for the change. Would any other company or CEO do this?
    • Re: (Score:3, Informative)

      by Anonymous Coward
      He points out he doesn't think there is an effective "lock-in" since by his (perhaps overly-simplistic) statistics, FairPlay music amounts to only 3% of music on iPods.

      Aside from that, I wonder if more people would buy from iTunes if there were no DRM. I know I would, but I might not be representative of the population.

      (Unless the population lives in their parents basements and cries themselves to sleep at night for all the loneliness they feel every day.)
    • by 99BottlesOfBeerInMyF (813746) on Tuesday February 06, 2007 @04:00PM (#17910724)

      What is amazing to me is that Jobs/Apple have a near monopoly on digital music downloads/players that would only be hurt by a lack of DRM lock-in and yet Jobs is still advocating for the change. Would any other company or CEO do this?

      Most iPods are still filled primarily with P2P downloads and ripped CDs. The lock-in they have is not all that valuable and probably not worth the bad press they receive as a result of it. I have long said the ITMS and Fairplay were just there to sell iPods not make money and the Fairplay was the least intrusive DRM they could get the studios to buy in on. Jobs stated long ago that DRM does not work for stopping piracy. He knows the score. DRM exists to promote incompatibility such that the media companies can get people to buy the same music for different uses (ring tone, in the car, portable, home stereo, etc.)

      Apple saw this use coming an stepped in to make sure the Mac line of computers was not destroyed by it once Microsoft controlled DRM using their OS monopoly. The fact that they succeeded as well as they have is somewhat miraculous and I suspect surprised even them. They set out to stop macs from being third class media citizens and ended up the big kid in the portable player market. Don't get too excited though. Windows Media Format - PlaysForSure is still the most common DRM scheme in use since so many people accidentally rip their CDs to that format with WMP's default settings. Now Apple is being attacked through legal channels and several companies have a vested interest in making sure Fairplay is defanged, while PlaysForSure and the Zune DRM formats are not. Jobs is doing the right thing here by turning their press attacks against them and asking for no DRM, rather than a situation that will inevitably lead to MS owning the space.

    • Re: (Score:3, Interesting)

      by Absolut187 (816431)
      He's being sued in Europe and the U.S. for Antitrust violations.
      This could be a bit of the "Those guys made me do it" defense.
      Not that it isn't true, it is. And yet Apple IS profiting from it.

      Slattery v. Apple Computer, Inc.
      N.D.Cal.,2005
      http://news.findlaw.com/scripts/printer_friendly.p l?page=/andrews/bt/cmp/20050922/20050922slattery.h tml [findlaw.com]

      Apple's iTunes hits a sour note in Europe
      http://www.ft.com/cms/s/5c7050fa-af24-11db-a446-00 00779e2340.html [ft.com]
    • by noewun (591275) on Tuesday February 06, 2007 @04:30PM (#17911264) Journal

      What is amazing to me is that Jobs/Apple have a near monopoly on digital music downloads/player

      Apple does not have a monopoly on digital music players. From Wikipedia [wikipedia.org]:

      In economics, a monopoly (from the Latin word monopolium - Greek language monos, one + polein, to sell) is defined as a persistent market situation where there is only one provider of a product or service. Monopolies are characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods.

      Apple is not the only provider of digital music players. There is no lack of competition in the marketplace for digital music players. Apple has the majority of the market because more people want to own iPods than any other music player. There is no conspiracy and no monopoly.

      I personally don't think removing DRM would have any effect on iPod sales, as most people I know have bought little to no music from the iTMS. I think I've bought four albums from them.

  • win / win (Score:4, Insightful)

    by cpearson (809811) on Tuesday February 06, 2007 @03:49PM (#17910454) Homepage
    With public relation statements like this coupled with the DRM 'ed iTunes how can Steve and Apple lose?

    Vista Help Forum [vistahelpforum.com]
  • by davebarnes (158106) on Tuesday February 06, 2007 @03:49PM (#17910456) Homepage
    I actually read the complete commentary by Steve Jobs.
    He is dead on.
    The music industry (RIAA and their cohorts in crime) have completely botched the distribution of music in an internet-enabled world.
  • FTA (Score:5, Informative)

    by roger6106 (847020) on Tuesday February 06, 2007 @03:49PM (#17910462)

    Here's the parts I found most interesting:

    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.

    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.

    If anything, the technical expertise and overhead required to create, operate and update a DRM system has limited the number of participants selling DRM protected music. If such requirements were removed, the music industry might experience an influx of new companies willing to invest in innovative new stores and players. This can only be seen as a positive by the music companies.
  • Well, Jobs gets it (Score:5, Informative)

    by drinkypoo (153816) <martin.espinoza@gmail.com> on Tuesday February 06, 2007 @03:50PM (#17910484) Homepage Journal

    At least he understands what the rest of us understand, which is that DRM can never prevent copying. The most it can do is slow it down.

    He does get one thing wrong in the article though: "No DRM system was ever developed for the CD". Not true. There are several DRM systems developed for Audio CDs. However, they all depend on the disc being placed into a computer that will pay attention to something other than CDDA tracks, which means they are ineffective on purpose-built CD copiers or computers on which the user has either disabled autorun or holds the shift key while the disc is inserted.

    DRM doesn't have to be effective to be DRM...

  • by guruevi (827432) <eviNO@SPAMsmokingcube.be> on Tuesday February 06, 2007 @03:50PM (#17910490) Homepage
    Apparently Apple was forced to put DRM up. If you remember correctly, a few years ago, Apple even promoted copying music as one of the things you could do with the (back then) new Apple with CDRW (G3's).

    Steve Jobs and Apple have always been holding their leg stiff against the record companies as much as possible and now they're kicking back. I think the record companies and affiliates finally see that DRM is hurting them bad, worse than the so-called pirating going on.

    I don't buy DRM'ed music, I refuse and I rather buy an MP3 from an indie artist or download a good song through BitTorrent. Well, I hope they finally start offering MP3's or any other codec (Ogg perhaps) without DRM.
  • by Phroggy (441) * <slashdot3NO@SPAMphroggy.com> on Tuesday February 06, 2007 @03:50PM (#17910492) Homepage
    Apple needs to give record labels the choice of whether they want their music to be sold with or without DRM on the iTunes Store. Keep the same prices, keep the same format and bitrate (128kbps AAC), and keep embedding the user's ID in the file, but give the labels the choice, and indicate it to the customer before they buy (a small icon next to the "Buy" button should be enough).

    Obviously most labels will continue to choose DRM. That's OK. Let them. And let the market sort it out.
  • by Dachannien (617929) on Tuesday February 06, 2007 @03:53PM (#17910542)
    It's probably ridiculous for me to say this, but dammit, this is Slashdot, so I'm gonna say it anyway:

    Is it not possible, nay, probable, that this was Steve Jobs's plan all along with reference to interoperability? The iTunes/iPod Family of Devices gets locked up behind music industry DRM which we all know Apple would rather not have bothered with in the first place. They were slow to fix exploits of various versions of FairPlay, and fixed those exploits probably at content cabal insistence. On the side was a lack of interoperability with other devices/services that went along with FairPlay.

    Now that people are up in arms about the iPod not playing fair with others, more and more Joe Sixpacks are starting to see that DRM is a bad thing. Here comes Steve Jobs, suggesting that if you want to point fingers at FairPlay's effect on interoperability, you should also be pointing fingers at the content cabal.

    Could this have been his diabolical plan all along?!

    Well.... Probably not. But it would sure make for a good conspiracy theory for all the Mac fansites out there.

    • by tfinniga (555989) on Tuesday February 06, 2007 @05:14PM (#17912152)
      So, one interesting thing about DRM is that it enables a particular business model that is completely unfeasible without DRM. Here's a hint: it's not the iTMS model.

      The Zune store, and any other subscription business model requires DRM. You can buy DRM-free tracks. It's impossible to rent them.

      Perhaps this is why iTMS hasn't offered a subscription option.
  • by arose (644256) on Tuesday February 06, 2007 @03:55PM (#17910598)
    That explains why they apply DRM even to music that is sold in DRM-less versions elsewhere...
    • Re: (Score:3, Insightful)

      Not a hard concept, but I'll go ahead and let you in on it:

      Someone else's contract != your contract.

      If you were to sign a contract to buy wingnuts from the Acme Wingnut Corporation for $0.02 / wingnut and then you see that another guy is only paying $0.01 wingnut, would you just pay $0.01 / wingnut, or do what your contract says?

      What do you thing the Acme Wingnut Corporation would expect to receive?
  • by Space cowboy (13680) * on Tuesday February 06, 2007 @03:57PM (#17910650) Journal

    Say what you will of Steve Jobs, he whole-heartedly believes in Apple's products, and in their ability to compete on a level playing-field. How many other companies, owning the sort of market-share that Apple has in digital music, would even countenance changing it ?

    And, he's not insane - Apple make their money on hardware, not so much on the iTMS itself - the risk is relatively low for Apple, conversely so for the labels. It is in fact likely to give SJ *more* power in his dealings with the record labels - Apple are the entrenched brand, the shining beacon over the dark landscape of pirated music . Once DRM is gone, the labels will need Apple to be even more on-side than they do currently, because they'll have lost the small measure of control they currently have.

    As far as Apple is concerned, it's a win-win. Steve probably expects to lose sales on the iTMS, but that non-DRM'd files would become more-commonly shared, raising the number of people who want a DAP, and given the public's current opinion on which DAP is the best, he feels confident Apple will benefit overall. Still takes some cojones to suggest it, though... A bit like when they cancelled their best-selling iPod model (the original mini) because they had a better version. A traditional business would have milked the mini for all they could, first.

    I think the whole RDF is simply that Steve *really* *really* believes in his companies products, that belief shines through in his body language, his tone of voice, his whole attitude. People pick up on that and empathise with it. It's a great sales technique, but it needs products that really change the world to do it. Apple strives to make that sort of product.

    Simon.
  • Sign of a trust (Score:4, Insightful)

    by i kan reed (749298) on Tuesday February 06, 2007 @04:05PM (#17910810) Homepage Journal
    The fact that a whole industry can press for something out a vendor is a sure sign of price fixing and various other crimes done by trusts. It's time to dust off the Sherman Anti-trust act, and use it on this horrendous industry.
  • by DysenteryInTheRanks (902824) on Tuesday February 06, 2007 @04:07PM (#17910854) Homepage
    I have obtained a copy of "Thoughts on Movies," a followup to to "Thoughts on Music," from sources inside Apple. I present it in its entirety:

    "With the stunning global success of YouTube, podcasting, Rocketboom and Zefrank, some have called for my other company, Pixar, to "open" the digital rights management (DRM) system that Pixar uses to protect its DVDs and online movies against theft, so that movies purchased from Pixar can be played anywhere in the world.

    "These people also point out that doing so would be in keeping with the principles I called upon the music industry to support in my previous essay.

    "To which I respond: Suck it, frigtards. Do you honestly think I got here by being a 'nicer guy' than Bill Gates? This is the real world, not 'fantasy la la land' where 1st gen Apple laptops don't burn your crotch and mysteriously shut down, or where you don't have to pay a bribe to go to the front of the line in the Apple Store.

    "Now if you'll excuse me, I need to go backdate some stop options, inspect the dormitories at our Foxconn company town in China and sue the pants off a teenaged blogger."
  • by theolein (316044) on Tuesday February 06, 2007 @04:11PM (#17910940) Journal
    Or just plain old Steve Jobs RDF, but it's by far the most candid piece of "straight talk" I've ever heard from the CEO of a huge company like Apple. Well done, Steve-O, if that little piece doesn't sell an extra 10 million ipods, then I don't know what will.
  • by Johnny Mozzarella (655181) on Tuesday February 06, 2007 @04:53PM (#17911698)
    Yesterday we find out that Apple Inc and Apple Corps have settled their legal differences.
    Today we get a letter from Steve telling us why the big 5 record labels are bad.

    Could it be that Apple could be looking to become record label #6 and offering its music DRM-free?
    Inquiring minds want to know.
    • by bill_mcgonigle (4333) * on Tuesday February 06, 2007 @07:23PM (#17914426) Homepage Journal
      Could it be that Apple could be looking to become record label #6 and offering its music DRM-free?

      I think you're very close to the truth - they don't want to become another record label - they want to destroy the concept of record labels.

      Right now Apple shares their revenues with the RIAA 44/65. Apple's costs are on the order of 10 cents, leaving them 34 cents for a song. That's plenty.

      The RIAA's 65 gets split something like 5/60 with the artists. They probably have a mechanism to book that 60 as all expenses...

      The artist splits his share with his manager, probably like 3/2. So, to tally it all up:
      • Apple: 34 cents
      • Artist: 3 cents
      • Manager: 2 cents

      Now, Apple has just done this deal with Apple. They're probably still splitting it 34/65. The Apple Records shell probably keeps 4 of that for management costs, spreading the remainder 8/8/8/6 (6 for Ringo) among the Beetles. Hey, not bad!

      So, now Apple can setup a meeting with the newly reformed The Police and say, "hey, fellas...". Ditto every other major band that's coming time for contract renegotiations. They can point out:
      • we sell more music than anybody but walmart
      • look at the trend lines
      • your fans will buy online
      • you can still press your own media and sell CD's through Amazon, et. al., and probably even Walmart
      • or screw Walmart

      They can then show them a different split:
      • Apple: 34 cents
      • Arist:43 cents
      • Manager: 22 cents

      and say, "even without Walmart you'll be making more with us". It's not insignificant that the manager is making 11x his current take in the new business model - he's going to be advising the band on what to do next.

      So, you're right, the timing of this letter serves as the official "flipping the bird" by Apple to the RIAA. They apparently think their new business model is now proven and inevitable.

      Good luck boys, have fun storming the castle!
  • by dont_run (1050730) on Tuesday February 06, 2007 @04:56PM (#17911752)
    1. The "big 4" want their music protected by DRM. Shame on them.

    2. Many indie bands and small record labels don't care about (or even want) DRM.

    3. Many bands, many records would just like to be listed by Apple and show up in the search results. Some of those artists would even want to give away their songs for no money at all.

    So I ask:

    Why not sell both DRM and non-DRM music?

    Why not embrace the revolution and turn iTunes into a universal music search tool?

    Why not have iTunes interpret CC licenses and automatically aggregate music found online without applying DRM to music licensed without such requirement?

    And a nice touch: Why not create an ugly icon (a monster?) to indicate those songs protected by the hateful DRM?
  • by Pascal Sartoretti (454385) on Tuesday February 06, 2007 @05:05PM (#17911952)
    Steve Jobs is Disney's biggest shareholder. I wonder if he would also favour DRM-free movies...
  • by guidryp (702488) on Tuesday February 06, 2007 @06:37PM (#17913778)
    I see a lot of people here stating that Bill Gates said the same, but they provided no reference. So I went looking.It all leads back to blog entry below. From reading this it sounds like Bill Gates is not against DRM, just the current DRM. His short term suggestion for music. Is to buy a CD and rip it, to avoid all that nasty DRM. That most of that nasty music DRM that you would be avoiding in the short term is Apples, is only a bonus I am sure.

    Now it is hard to judge by these quotes that may have transcription problems, but this is in no way denigrating DRM on Bills part. Just current implementations, of which no doubt Vista is getting closer to DRM nirvana. Every time I see Bill Gates speak, he is exactly like a politician, trying to sound out on both sides of issues while ultimately saying nothing.

    Steve Jobs OTOH, is posting clearly without reservation what his stance is on DRM. So this is refreshingly different that Gates comments.

    http://www.techcrunch.com/2006/12/14/bill-gates-on -the-future-of-drm/ [techcrunch.com]
    "
    Gates said that no one is satisfied with the current state of DRM, which "causes too much pain for legitmate buyers" while trying to distinguish between legal and illegal uses. He says no one has done it right, yet. There are "huge problems" with DRM, he says, and "we need more flexible models, such as the ability to "buy an artist out for life" (not sure what he means). He also criticized DRM schemes that try to install intelligence in each copy so that it is device specific.

    His short term advice: "People should just buy a cd and rip it. You are legal then."

    He ended by saying "DRM is not where it should be, but you won't get me to say that there should be usage models and different payment models for usage. At the end of the day, incentive systems do make a difference, but we don't have it right with incentives or interoperability."
    "
  • by SnowDog74 (745848) on Tuesday February 06, 2007 @09:00PM (#17915392)
    Throughout the discussion here I've noticed one observation conspicuously and repeatedly being ignored for its subtle, but ultimate, relevance to the matter at hand.

    Jobs noted the proportion of iTunes Music Store purchases on the average iPod... 2.2%. Note how surreptitiously his real point is being made...

    People buying iPods are barely loading them with DRM iTunes.

    I'll repeat that... People buying iPods are barely loading them with DRM iTunes.

    This should be ringing off alarm bells in your head. Jobs is not a moron. He is very careful to position his RDF in direct relation to how much leverage he inherently possesses over the entity he's selling to... whether the music industry or consumers.

    In this case, the data begs, no, screams the obvious... DRM iTunes are an insignificant factor in the usage of iPods. They are a loss leader that may attract some consumers to the concept, but practically anyone buying an iPod discovers, sooner or later, how absurdly easy it is to pop in a CD, rip it, and drop it to your iPod.

    Apple stands to lose very little if the record companies fail, once again, to pay attention to the tea leaves that indicate the public isn't buying their artificial attempts at keeping a dying distribution monopoly on life support. Someone suggested Apple has more to lose because if they have no songs on the store, they won't sell iPods. I think the data suggests otherwise. Clearly they sell far more iPod capacity than is used to hold purchased iTunes... which is a good indication that they could continue to sell iPods like crazy without any iTunes Music Store because iTunes without the music store still facilitates a very aesthetically appealing, functional, integrated solution, quality controlled top to bottom by Apple without reliance on third parties for operability assurance.

    There's an argument about interoperability but let me remind everyone that a device that doesn't like to talk to other devices still functions in and of itself. A device that doesn't even talk to itself or its own peripherals very well is, however, entirely useless. Interoperability isn't as critical an issue as operability assurance. If you buy a device, you expect that it works. Third party conglomerations of software and hardware very often fail this most basic consumer expectation in too many ways to count. Hence my absolute amusement whenever naysayers play down "it just works" as a superfluous requirement demanded only by design aesthetes. I presume there isn't a consumer of sound mind on the planet who wants their product to "just fail."

    In that regard, iPod + iTunes still has strategic competitive advantages of tremendous importance against competing hardware and software.

    Jobs isn't being philosophically altruistic in his statement. This isn't to say his action isn't admirable, but to fully understand just what kind of balls he has to come out and deliver such a bold ultimatum to the recording industry, one has to understand the confluence of factors that give support to his assertions.

    It was evident as early as the birth of the world wide web that internet distribution of music was an inevitability. Record companies hurried up and did nothing. This is not for lack of foresight. They knew it was coming. But the implications go far beyond piracy. The real fear of opening up the distro monopoly has to do with the realization by recording artists that record companies are now superfluous. Once upon a time, record companies offered promotion, marketing and distribution resources that were largely unmatched. The internet has entirely changed this. The RIAA barrage of lawyers being hurled at every twelve year old and grandmother is not because piracy threatens their bottom line. Artist independence threatens their bottom line. The entire internet threatens their bottom line. But if we put the internet and RIAA on a scale, and factor in growth momentum, the scale tells us that the internet is unstoppable. RIAA also knows this. But t

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