Apple and DRM

[This caused a bit of a stir when it was published on the BBC website – I was away in Scotland, and offline, so missed most of it… ah well, you can’t always be around.  And now Cory is saying the same about DRM in Salon.]

For a company with a tiny share of the computer market and an increasingly perilous first mover advantage selling portable music players Apple punches well above its weight in coverage of its every move.

In January CEO Steve Jobs single-handedly distracted the attention of the world’s technology press from the hundreds of announcements taking place at the Computer Electronics Show in Las Vegas by pulling out an iPhone on stage in San Francisco.

The recent settlement of the long-running dispute with Apple Corps over the use of the Apple name garnered thousands of column inches and millions of page views online as aging editors took yet another opportunity to hope that the forty-year old Beatles music they grew up with could top the charts once again.

And much of the attention focused on the possibility that Beatles songs would be available on Apple’s iTunes Music Store rather than any of the other download services available, giving Apple even more coverage.

This was followed by widespread coverage of the UK versions of the Mac versus PC ads, with David Mitchell and Robert Webb sacrificing any comic credibility their characters may have had on the altar of commercialism. Columnists and bloggers queued up to pronounce and proselytise, and every one of them mentioned the Mac in the same breath as the PC.

Finally there was the brilliant coup of announcing that iPod users should not upgrade to Windows Vista because the iTunes software doesn’t work properly on it, which generated even more coverage.

Since Vista has been available in some form for over a year and the production release of the business version took place two months ago we can only assume that Apple’s legion of Windows programmers had better things to do with their time – surely they could not have intended to spoil Bill Gates’ big day?

Yet instead of prompting criticism of Apple for not preparing for one of the most widely trailed software launches of the century so far this was seen as another problem for Microsoft.

Not bad for a company whose profitability depends on a music player that is having to compete in a fast maturing market, whose board is under a cloud after the admitted manipulation of share options, and whose charismatic CEO could be ousted if evidence emerges that he was aware of that manipulation.

The latest example of what has been called the ‘reality distortion field’ around Steve Jobs came last week when the man joined Victoria Beckham in the illustrious list of celebrity bloggers. Beckham posted about life in California, while Jobs limited himself to a meditation on digital rights management, or DRM.

DRM software like Apple’s Fairplay or Microsoft’s Windows Media DRM should properly be called digital restriction management, since its primary goal is to limit what purchasers can do with downloaded content. Whether it’s music, films, text or software, a DRM’d file will limit your ability to play, copy, transfer or take extracts from the material.

Fairplay is applied to any song downloaded from the iTunes Music Store and built into every iPod ever shipped. Apple has refused to license it to any other site or hardware manufacturer – with the exception of its limited use on Motorola phones – and as a result songs bought from Apple can only be played on Apple hardware. It’s a closed market, one that has attracted the attention of regulators around the world who fear that it could also be an example of unfair market manipulation.

In his post Jobs said that Apple only implemented DRM because the record companies made them do it, and that they were unwilling to license Fairplay because it would make it easier for skilled crackers to break the protection.

This ignores the fact that some of the music on the iTunes store is also available without FairPlay or indeed DRM of any sort from other, less restrictive, services like eMusic. It also ignores the reality that Microsoft’s widely licensed system has been cracked the same number of times as Fairplay, so the evidence would seem to indicate that Jobs fears are not justified.

Jobs also said that Apple would stop using DRM in an instant if they could.

I don’t believe him. If Apple switched off Fairplay then they would probably sell a lot more songs, on which they make very little money, and a lot fewer iPods, on which they make a lot. I don’t buy songs from Apple’s store because I don’t like DRM. I prefer to buy CDs which I can copy myself, trusting to the fact that this has been customary practice for so long that any attempt to prosecute me under the UK’s restrictive laws would fail in court.

But Jobs can see which way the wind is blowing, and he can see that the record companies are finally tiring of their painful, expensive and ultimately unsatisfactory relationship with DRM.

They have stopped trying to sell broken CDs that can’t be ripped to disk, and as a result nearly all of the music that they so painstakingly control when sold over the net is available at higher quality and lower cost to anyone who cares to spend the time taking it.

They are actively exploring alternatives to rigid control of sharing, like flat-rate permissive licensing that would track usage and reimburse artists without limiting what fans can do.

And they are – like EMI – looking to set up their own music stores selling unencumbered tracks direct to fans.Jobs has to position Apple for this brave new world, and he knows that his charisma is such that if he rushes to the head of queue and claims to be leading the charge then some, at least, will believe him.

Sadly he’s likely to be crushed under foot by those who really understand the music business and didn’t sell their souls to the record companies back in the days when they believed in DRM.

Bill’s Links
Apple iPhone:
Apple Corps deal:
iTunes and Vista:
Apple Share options:
Apple DRM: