Jobs: dump DRM
WSJ.com - February 6, 2007
Urges Music Labels To Drop Antipiracy Software By NICK WINGFIELD and ETHAN SMITH February 6, 2007 3:58 p.m.
Apple Inc. CEO Steve Jobs called on major music companies to stop =
requiring Apple and other companies to sell songs over the Internet =
with antipiracy software, calling the technology ineffective at =
deterring illicit copying of music.
Such a move, if embraced by music companies, could eliminate one of =
the biggest criticisms of Apple’s current hold on the digital music =
market — that music sold over the Internet by most of Apple’s rival =
doesn’t play on iPods, while songs from Apple’s iTunes Store don’t =
play on rival hardware devices.
The message by Mr. Jobs, delivered Tuesday afternoon in an unusual =
1,800-word essay posted on Apple’s Web site titled “Thoughts on =
Music,” said major music companies should abolish digital rights =
management, or DRM, software that is designed to deter copying of music.
It’s unclear whether the major music companies =96 EMI Group PLC, Sony =
BMG, Vivendi SA’s Universal Music Group and Warner Music Group Corp. =
– will agree to drop DRM, a sentiment that has been gaining traction =
in recent months among executives in the technology industry.
“Why would the big four music companies agree to let Apple and others =
distribute their music without using DRM systems to protect it?” Mr. =
Jobs asked in the essay. “The simplest answer is because DRMs haven’t =
worked, and may never work, to halt music piracy.”
One reason DRM software doesn’t work, Mr. Jobs said, is that the vast =
majority of music sold by recording companies is on compact discs, =
which generally contain no copy-protection software. “In 2006, under =
two billion DRM-protected songs were sold world-wide by online =
stores, while over 20 billion songs were sold completely DRM-free and =
unprotected on CDs by the music companies themselves,” Mr. Jobs wrote.
He estimated that less than 3% of the music on the average iPod is =
purchase from the iTunes Store and protected by DRM. Mr. Jobs said =
Apple would embrace “in a heartbeat” a scenario in which songs =
purchased without DRM software from any online music store would play =
on the iPod.
=
Steve Jobs’s Statement on DRM February 6, 2007 3:58 p.m.
Here is a statement posted by Apple Inc.’s Steve Jobs about digital =
rights management software, which restricts how digital downloads can =
be used.
Thoughts on Music Steve Jobs February 6, 2007
With the stunning global success of Apple’s iPod music player and =
iTunes online music store, some have called for Apple to “open” the =
digital rights management (DRM) system that Apple uses to protect its =
music against theft, so that music purchased from iTunes can be =
played on digital devices purchased from other companies, and =
protected music purchased from other online music stores can play on =
iPods. Let’s examine the current situation and how we got here, then =
look at three possible alternatives for the future.
To begin, it is useful to remember that all iPods play music that is =
free of any DRM and encoded in “open” licensable formats such as MP3 =
and AAC. iPod users can and do acquire their music from many sources, =
including CDs they own. Music on CDs can be easily imported into the =
freely-downloadable iTunes jukebox software which runs on both Macs =
and Windows PCs, and is automatically encoded into the open AAC or =
MP3 formats without any DRM. This music can be played on iPods or any =
other music players that play these open formats.
The rub comes from the music Apple sells on its online iTunes Store. =
Since Apple does not own or control any music itself, it must license =
the rights to distribute music from others, primarily the “big four” =
music companies: Universal, Sony BMG, Warner and EMI. These four =
companies control the distribution of over 70% of the world’s music. =
When Apple approached these companies to license their music to =
distribute legally over the Internet, they were extremely cautious =
and required Apple to protect their music from being illegally =
copied. The solution was to create a DRM system, which envelopes each =
song purchased from the iTunes store in special and secret software =
so that it cannot be played on unauthorized devices.
Apple was able to negotiate landmark usage rights at the time, which =
include allowing users to play their DRM protected music on up to 5 =
computers and on an unlimited number of iPods. Obtaining such rights =
from the music companies was unprecedented at the time, and even =
today is unmatched by most other digital music services. However, a =
key provision of our agreements with the music companies is that if =
our DRM system is compromised and their music becomes playable on =
unauthorized devices, we have only a small number of weeks to fix the =
problem or they can withdraw their entire music catalog from our =
iTunes store.
To prevent illegal copies, DRM systems must allow only authorized =
devices to play the protected music. If a copy of a DRM protected =
song is posted on the Internet, it should not be able to play on a =
downloader’s computer or portable music device. To achieve this, a =
DRM system employs secrets. There is no theory of protecting content =
other than keeping secrets. In other words, even if one uses the most =
sophisticated cryptographic locks to protect the actual music, one =
must still “hide” the keys which unlock the music on the user’s =
computer or portable music player. No one has ever implemented a DRM =
system that does not depend on such secrets for its operation.
The problem, of course, is that there are many smart people in the =
world, some with a lot of time on their hands, who love to discover =
such secrets and publish a way for everyone to get free (and stolen) =
music. They are often successful in doing just that, so any company =
trying to protect content using a DRM must frequently update it with =
new and harder to discover secrets. It is a cat-and-mouse game. =
Apple’s DRM system is called FairPlay. While we have had a few =
breaches in FairPlay, we have been able to successfully repair them =
through updating the iTunes store software, the iTunes jukebox =
software and software in the iPods themselves. So far we have met our =
commitments to the music companies to protect their music, and we =
have given users the most liberal usage rights available in the =
industry for legally downloaded music.
With this background, let’s now explore three different alternatives =
for the future.
The first alternative is to continue on the current course, with each =
manufacturer competing freely with their own “top to bottom” =
proprietary systems for selling, playing and protecting music. It is =
a very competitive market, with major global companies making large =
investments to develop new music players and online music stores. =
Apple, Microsoft and Sony all compete with proprietary systems. Music =
purchased from Microsoft’s Zune store will only play on Zune players; =
music purchased from Sony’s Connect store will only play on Sony’s =
players; and music purchased from Apple’s iTunes store will only play =
on iPods. This is the current state of affairs in the industry, and =
customers are being well served with a continuing stream of =
innovative products and a wide variety of choices.
Some have argued that once a consumer purchases a body of music from =
one of the proprietary music stores, they are forever locked into =
only using music players from that one company. Or, if they buy a =
specific player, they are locked into buying music only from that =
company’s music store. Is this true? Let’s look at the data for iPods =
and the iTunes store =96 they are the industry’s most popular products =
and we have accurate data for them. Through the end of 2006, =
customers purchased a total of 90 million iPods and 2 billion songs =
from the iTunes store. On average, that’s 22 songs purchased from the =
iTunes store for each iPod ever sold.
Today’s most popular iPod holds 1000 songs, and research tells us =
that the average iPod is nearly full. This means that only 22 out of =
1000 songs, or under 3% of the music on the average iPod, is =
purchased from the iTunes store and protected with a DRM. The =
remaining 97% of the music is unprotected and playable on any player =
that can play the open formats. Its hard to believe that just 3% of =
the music on the average iPod is enough to lock users into buying =
only iPods in the future. And since 97% of the music on the average =
iPod was not purchased from the iTunes store, iPod users are clearly =
not locked into the iTunes store to acquire their music.
The second alternative is for Apple to license its FairPlay DRM =
technology to current and future competitors with the goal of =
achieving interoperability between different company’s players and =
music stores. On the surface, this seems like a good idea since it =
might offer customers increased choice now and in the future. And =
Apple might benefit by charging a small licensing fee for its =
FairPlay DRM. However, when we look a bit deeper, problems begin to =
emerge. The most serious problem is that licensing a DRM involves =
disclosing some of its secrets to many people in many companies, and =
history tells us that inevitably these secrets will leak. The =
Internet has made such leaks far more damaging, since a single leak =
can be spread worldwide in less than a minute. Such leaks can rapidly =
result in software programs available as free downloads on the =
Internet which will disable the DRM protection so that formerly =
protected songs can be played on unauthorized players.
An equally serious problem is how to quickly repair the damage caused =
by such a leak. A successful repair will likely involve enhancing the =
music store software, the music jukebox software, and the software in =
the players with new secrets, then transferring this updated software =
into the tens (or hundreds) of millions of Macs, Windows PCs and =
players already in use. This must all be done quickly and in a very =
coordinated way. Such an undertaking is very difficult when just one =
company controls all of the pieces. It is near impossible if multiple =
companies control separate pieces of the puzzle, and all of them must =
quickly act in concert to repair the damage from a leak.
Apple has concluded that if it licenses FairPlay to others, it can no =
longer guarantee to protect the music it licenses from the big four =
music companies. Perhaps this same conclusion contributed to =
Microsoft’s recent decision to switch their emphasis from an “open” =
model of licensing their DRM to others to a “closed” model of =
offering a proprietary music store, proprietary jukebox software and =
proprietary players.
The third alternative is to abolish DRMs entirely. 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.
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. Though the big four music companies require =
that all their music sold online be protected with DRMs, these same =
music companies continue to sell billions of CDs a year which contain =
completely unprotected music. That’s right! No DRM system was ever =
developed for the CD, so all the music distributed on CDs can be =
easily uploaded to the Internet, then (illegally) downloaded and =
played on any computer or player.
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. 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.
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.