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Why Apple's Advice on DRM Won't Be Heeded

by February 06, 2007

Apple's CEO and lead "Strategist", Steve Jobs, wrote an open letter to consumers and executives alike this past week outlining three basic strategies for solving the problem with DRM-encoded music. History tells us, this advice will be ignored, and most likely assaulted by the music industry.

The crux of the matter, as always it seems, centers around DRM-wrapped music. Every (legal) online music store in existence, in order to license music from the big four labels (Universal, Sony BMG, Warner and EMI - who control over 70% of all music) must agree to wrap that music in DRM. DRM, in case you just exited form a 1960's-era nuclear bunker, is short for Digital Rights Management, and contains "secret" code for making sure that downloaded songs are not played on any device other than the one the owner possesses (more or less). The point is that music companies don't want people downloading files from an online store and then uploading those files to the Internet... but that doesn't make sense.

You see, according to Jobs (and anyone else who's been breathing for over 10 years), users can ALREADY upload unprotected music online anytime they want. It's called the CD - an unprotected format that has not had DRM since its inception. And DRM can never be added since the rather large installed base of CD players do not support it (just ask Sony about trying that one).

Now you may think that downloadable music is overtaking the CD, however this is not the case - at least not yet. Right now, Apple's numbers put the CD as leading downloadable music 10-to-1. This means that all of this DRM-hoopla is over a 10% marketshare of revenues when the record companies themselves are authorizing 90% of their music to be sold DRM-free. WHAT?!?!

So what is the end result? Well, it's simple: Microsoft's downloadable music store only plays its files on Zune players, Sony's online store only plays its files on Sony players, and Apple's iTunes only plays on iTunes players. Consumers hate this, but it's not the online stores' fault. Blame the record companies' double standards on DRM protection. If it weren't for DRM, Apple says it would open up iTunes music to play anywhere - immediately.

In the past, I have felt that some of the blame belonged to the online stores - attempting to increase sales of its own branded music players. What I've found is that this is most likely only a very small part of the picture. The real issue is that licensing out DRM technology to other venders (which would allow iTunes music to play on Sony or Zune players for instance) simply opens up a can of worms. The can of worms is that DRM is basically a bunch of secrets - and we all know what happens when too many people know a secret (psst: it's not a secret anymore). Then the mass updates must happen - not only to the company's players, but to the licensed players as well - and that's very hard to manage.

What does this all mean? Simple - as should always be the instinct - blame the record industry, not the online stores and player manufacturers (of course Sony is somewhat playing both sides). If record industries would simply pull DRM for online music, everyone could get back to the business of making good music, making good players, and providing services for consumers... and maybe, just maybe, they could start running their company like a productive, responsible business instead of a professional racketeering club.

 

About the author:

Clint Deboer was terminated from Audioholics for misconduct on April 4th, 2014. He no longer represents Audioholics in any fashion.

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Recent Forum Posts:

birdonthebeach posts on February 14, 2007 18:14
highfihoney
First off i dont download anything,im a music collector & take pride in my collection,at last count over 1,500 titles,i wouldnt put any home made recording in my collection no matter the medium,i copy my own discs for use in our car systems & thats it,what im defending here is kids being able to copy & share music for free.

To answer your question about me thinking the ipod was a conspiricy the answer is no but i do think that everybody knew all along where it would lead,do you really believe that the recording industry giants are just a bunch of stupid boobs aimlessly running around making boat loads of cash without enough foresight to predict a new trend while its happening & to have enough business sense to exploit it to its fullest?

I am glad to hear you don't personally steal music (and I am not trying to sound like a jerk, by the way, so don't take this as an attack on YOU), but there is a generation of kids right now that think that music is free. And is it not - it never has been. I too, have been an avid collector of music since I was a kid. I used to save money I made mowing lawns to go to local mom and pop record store and buy singles and 33's! I also made mix tapes, from the radio and from my albums, and traded them around. But even as kids we understood that the only way the artists, huge or unknown, made a living was from us PURCHASING their albums. Kids copying and “sharing” music today IS a big deal. (I do not have a problem with mix discs, etc - that spurs people to buy music)

And by the way, I LOVE the way you describe the record execs above, because guess what, YOU ARE RIGHT! They are a bunch of boobs (mostly suits, actually), making loads of cash, who ride around in limos and had NO interest in listening to people predicting the digital future!! I worked with these guys during that time! The late 80's and early 90's was when development died at the labels because the huge multinationals bought up the record industry. These companies are run by suits - bean counters with no interest in music, only in money. They are greedy and yes, they were ignorant. I don't hate what napster did to the mega labels, I hate what it did to the artists & songwriters. The majority of recording artists struggle to ever make a decent living. Trust me on this. For every big act you see, there are THOUSANDS of struggling artists out there. My guess is that your massive collection is full of artists who are directly impacted every time someone burns a disc for a buddy of one of their albums rather than buys a CD or purchases a download.

I love this discussion - I am only trying to help people see past the big names and big companies. I'm not trying to pick a fight, highfihoney.

(By the way, Stratman, I love your wrench, but the analogy of the power tool - it misses the mark because the owner of the tool can't use it at the same time the guy that borrows it does. The books and magazines analogy is better…)

Engage an artist that has never had a record go gold (500k units sold). Trust me, they are not making much money. (And by the way - that is rare air, to sell gold or platinum.) Many critically acclaimed artists have never seen riches, especially if they are signed to a major label.

Believe it or not, I do see a silver lining in all this. This cycle has happened at a time when the music industry “machine” had begun to stink. Lousy stuff coming from the majors. The death of artist development at the labels resulted in the death of great new artists, for the most part. Which has meant that the independent scene has flourished. (not to mention reunion tours, right Gene? ) And technology has allowed this scene to thrive. A struggling artist can in theory, buy a computer and some gear, record their own record, market and sell it online via their own website, myspace, etc., and in a strange way go old school - cutting out the big labels. There is some great stuff out there!

I know you guys are sick of hearing this from me…. I think I am too. We can probably go round and round and never get anywhere. My only goal is to have people understand it from the point of view of a “working” person in music industry, not a big label or mega star.
MDS posts on February 13, 2007 13:42
rr2465
How different is this from making a “playlist” and sharing with your friend on an iPod?

As I stated above, perhaps too verbosely, I don't think that is any different than making mix tapes or CDs. If however, you make your 1,000 song playlist available for any anonymous stranger on the internet to download for free, that is definitely stealing and that is the main concern of the RIAA.
rr2465 posts on February 13, 2007 13:38
Mixed Tapes?

I'm a child of the 80's. Back then we made “mixed tapes” all the time. We recorded songs from the radio, songs from LPs, songs from cassettes and then songs from CD's (CD's a little bit later). We made mixed tapes and gave them to our friends. We met girls and gave them mixes of what we were listening to. I don't remember this being considered stealing. Maybe it was?

How different is this from making a “playlist” and sharing with your friend on an iPod?
stratman posts on February 13, 2007 13:27
Let me throw a wrench in the machine here, let's say I go and buy a Bosch drill at Home Depot, I'm a professional tradesman (I make my living with tools)I lend that same tool to a buddy who is also a tradesman, he builds a house with it and turns a huge profit, he skipped buying that drill from Bosch, instead he used one from a friend, should Bosch be remunerated, afterall they lost a sale due to my lending out the tool and the second party made a profit using said tool.

Or how about books or magazines, I read a great book and give it to my friend to read? How about your friendly dentist he has tons of magazines for you to read while waiting.
highfihoney posts on February 13, 2007 11:57
birdonthebeach
Highfihoney, I don't follow your issue with XM and Sirius. If you don't want to pay for commercial free radio, playing songs and formats that cannot be found anywhere else on radio, then don't subscribe. I am happy to pay $12/month for that service. Commercial radio no longer interests me, with all the ads and the boring playlists. But I have a choice! I can turn it off. Or I can pay for XM.

The idea that the iPod was some well thought out conspiracy by the big labels is a joke. They were idiots, and did not want to deal with the reality of technology, and thus ended up having to deal with Napster and the like. They have been playing catch-up ever since. Apple finally convinced them that there was a way to do it right. Now the time has come for them to give up on the DRM so that those of us who DON'T steal music can have the freedom we deserve with digital formats of the music.

I just don't follow your logic, highfihoney.

First off i dont download anything,im a music collector & take pride in my collection,at last count over 1,500 titles,i wouldnt put any home made recording in my collection no matter the medium,i copy my own discs for use in our car systems & thats it,what im defending here is kids being able to copy & share music for free.

To answer your question about me thinking the ipod was a conspiricy the answer is no but i do think that everybody knew all along where it would lead,do you really believe that the recording industry giants are just a bunch of stupid boobs aimlessly running around making boat loads of cash without enough foresight to predict a new trend while its happening & to have enough business sense to exploit it to its fullest?

Commercial radio has changed the way they advertise with every song having a commercial lead in or a commercial trailer making it impossible to record an entire song,is this pure accident or could it be that its part of the business model laid out by the recording industry to make recording impossible,commercial radio sucks for many reasons just pick the reason you like but in the end all the reasons lead music lovers closer & closer to a pay for radio service like xm,the $12 a month charge for xm isnt alot but thats not my point,to a kid who makes minimum wage its 1/10'th of his earnings & thats if the kid even qualifies for the service.

You threw the word conspiricy out there which was silly in the first place,this whole ipod/down load thing isnt a conspiricy its a long range business model designed to maximize profits from every aspect of each recording so they can profit from every person hearing the material.

Pretty simple logic.
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