Livin’ in the Reality Distortion Field

Today, Steve Jobs posted an essay on his company’s usage of DRM and his stance on the technology. It’s a 5 or 10-minute read, but anyone interested in online music should give it a read. For the rest of you who don’t care, I’ll bore you with a quick recap:

Apple catches a lot of flak from customers, competitors and governments for having a “top-to-bottom” distribution model: you own an Apple iPod, which (mostly) only works with Apple iTunes. If you want mainstream music or movies, you have to download them from Apple’s iTunes store. Since they got into all of these markets at the right time, they have almost the entire user base by the throat.

In fact, right now Apple is in deep legal water with a few European governments, notably France, which is calling on Apple to essentially eliminate the DRM that ties users to this model.

According to Jobs, Apple agreed to encode all files sold on the iTunes store because it was the only way that the 4 big music labels (EMI, Sony BMG, Vivendi Universal, AMG) would agree to license their music collections. The hot case of P2P filesharing had just finished with Napster losing big in federal court, and the rights-paranoid labels didn’t want “unprotected” files being downloaded and leaking to P2P networks.

Jobs argues that while Apple went along with the music industry’s demands, “…DRMs haven’t worked, and may never work, to halt music piracy.” He points out that 90% of all music is bought in the completely DRM-free CD format, and those files are easily placed on the P2P networks, as well as iPods. DRM-infected files from iTunes account for 3% of songs on the average iPod.

As far as Apple’s invovement, Jobs sees three ways to go:

  1. Keep with the current, all-Apple model that keeps the DRM secure
  2. License Apple’s FairPlay DRM to other manufacturers, potentially drawing labels to revoke their music licenses if the DRM is compromised
  3. Convince the labels to go DRM-free: “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.”

Now it’s pretty clear that this is a strategic move to sway European governments to redirect DRM-related heat to the music labels. But here is the CEO of the world’s largest vendor of files with DRM saying that it is in the consumer’s best interest to abolish the technology, and that should mean something.