In an open letter on Apple.Com, Steve Jobs’ discusses his views on digital rights management, licensing FairPlay (Apple’s DRM used on iTunes) and the value of DRM free music. He provides a new perspective on some of Apple’s decisions in this space, and on the digital music business ingeneral. While I recommend you read his comments in there entirety, there are two clips that I found particularly interesting.
In this first one, Steve comments that he would welcome it if the big four music companies would drop their DRM requirements:
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.
This second clip is even more strongly worded. In some ways, its a thinly veiled call to the big four music companies to recognize the futility of DRM and abandon it:
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.
So if the music companies are selling over 90 percent of their music DRM-free, what benefits do they get from selling the remaining small percentage of their music encumbered with a DRM system? There appear to be none.
This is an excellent manifesto on what is wrong in this marketplace from the person that made it viable to begin with. DRM is a train wreck waiting to happen. It’s bad for both businesses and consumers.
Let’s hope the big four record companies are paying attention…