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ATPM 13.03
March 2007




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by Wes Meltzer,

Mr. Jobs, Tear Down This Wall

No businessman manages his pulpit as well as Steve Jobs has, at least not since Lee Iacocca. When the be-turtlenecked one speaks, we listen. This is not true of RealNetworks CEO Rob Glaser, for instance. Jobs has the pulpit at least twice each year, and he makes the most of it.

So this time, the earth-toned prophet got our attention by turning his all-powerful media prowess to digital rights management. In an open letter, the “old media” equivalent of a blog entry, he goes on the attack against the Recording Industry Association of America and the Big Four record labels for their insistence on DRM technologies to restrict the rights of users to the music that they own. Jobs’ “Thoughts on Music” is, somewhat unexpectedly, neither a jeremiad nor a mushy bromide—it is a well-reasoned and eloquent discussion of the current state of affairs, and an appeal to change the status quo. The first thing I thought while reading it was that it was as much an essay in the Montaigne mold as anything else, equal parts musing, complaint, and persuasion.

It becomes clear, as you read these “thoughts,” that Jobs has the Seinfeldian “hand” in the relationship between the music labels and Apple. After all, there are three forms of playback for recorded music—radio, CDs, and digitally compressed music files—and of these, the iPod is nearly the entire third category on its own. Jobs says that it was the major record labels, not Apple, that insisted on FairPlay, the DRM that accompanies the iTunes Music Store; and that the price of that is the lock-in of the current state of affairs. You can’t take your iTMS tracks with you, nor can you play tracks you purchase on any other DRM’ed music site on your iPod (or using iTunes). The record labels have attempted to regain their “hand” by encouraging Apple to open FairPlay to other vendors, but he categorically rejects this with the (probably true) assertion that licensing would just make it all the more likely that FairPlay would be cracked. So Apple has sat, alone, at the top of the DRM heap.

Any ordinary CEO would use this to make the most of their monopoly lock-in. It’s not hard to imagine Steve Ballmer looking at this and saying, “Gosh, we need to sell more tracks from the Microft Windows Live and Recorded Music Subscription and Single-Song Music Store for Mobile Players!” (That sounds eerily like a real Microsoft product name.) But Jobs is no ordinary CEO.

He says that the recording industry is actively encouraging the single largest distribution channel for unencrypted, non-DRM-controlled music: CDs. For all their rhetoric about how DRM is designed to protect copyright holders from infringement, Jobs says, they’re actively spreading around unencrypted music. That’s done wonders for music. Why can’t we have the same situation with digital music?

Don’t take my word for it, though. Read the letter. Trust me.

Well, predictably just about everyone on the face of the Earth has an opinion on everything Steve Jobs does. But there are some genuinely interesting and persuasive things to hear about his “Thoughts on Music,” so this month is going to be a broadly based round-up of everything credible and interesting I can get my hands on, in response.

Preaching to the Heavenly Chorus

Opposing DRM is a cottage industry on the Internet, and a handful of Web celebrities cut their teeth in the salad days of DRM—Jon Lech Johansen of DeCSS fame, for instance, or Lawrence Lessig, the lead attorney in Eldred v. Ashcroft. I sometimes have to remind myself that this all took place a very long time ago, at least in Internet time, the opposite of geological time.

Both Johansen and Lessig, not surprisingly, posted their reactions to Jobs’ letter. They make a good place to start because they’ve got a clear personal stake in the battle. For them, Jobs is preaching to the choir.

Lessig wrote a brief post welcoming Jobs to the battle, and noting that with Apple’s support, the anti-DRM fight would be much easier. But he says we should ask Jobs to walk the walk:

But then here’s a simple next step: There are artists on iTunes whose creative work is Creative Commons licensed. Colin Mutchler is one. When his stuff first went into iTunes, he requested the DRM be turned off. The request was refused. But if no-DRM is Apple’s preferred policy, then let them begin here.

Johansen was less charitable. He says that Jobs’ claim that Apple would like to sell music without DRM “flies in the face of reality,” and that they should put their money where their mouth is. He adds:

It should not take Apple’s iTunes team more than 2–3 days to implement a solution for not wrapping content with FairPlay when the content owner does not mandate DRM. This could be done in a completely transparent way and would not be confusing to the users.

The Electronic Frontier Foundation agreed, and took the most positive route of all of the anti-DRM activists. “We agree wholeheartedly with Jobs,” they said in a press release on their Web site, “since EFF has been making exactly the same points for several years now. As a first step in putting his music store where his mouth is, we urge him to take immediate steps to remove the DRM on the independent label content in the iTunes Store. Why wait for the major record labels?” They encourage consumers to take Jobs’ remarks to heart, and point them to their anti-PERFORM Act campaign to help out. I will neither endorse nor attack the project, but I think their heart is in the right place, as usual.

Another important anti-DRM Web celebrity is Cory Doctorow, of Boing Boing fame. He wrote a column for Information Week last June, arguing that FairPlay is a regime that hurts consumers, the music industry—and Apple, in a way, by making it the only player in the game with any leverage. It’s a long article, but Doctorow makes the persuasive point that the limited restrictions Apple places on the playback of FairPlay music are only there because they were the bargaining chips Jobs needed to get the record labels to agree to a digital music distribution regime. So what’s wrong with this? Well, it’s still bad for consumers, although it’s possible it’s better for consumers than the alternative (no practical legal channel for digital music distribution).

Worse still: Apple’s competition-proof music makes switching away from its product expensive for Apple’s customers. The world of consumer electronics changes quickly and you’d have to be a fool to believe that no one will ever make a superior portable music player to the iPod. iPods and other walkmans have a low price-point and turn over often—it’s no coincidence that Apple’s iPods are made out of materials that scratch if your breathe on them and look like they’ve been through a rock-tumbler after a couple weeks in your pocket—which means that you’re likely to be in the market for a new one every year or two.


Steve Jobs really doesn’t care how many CPUs you play an iTune on, or whether you burn a playlist seven or 10 times. He wants you to get locked into iPods, not fall prey to some pie-in-the-sky pipe-dream where “consumers” pay for “features” like pausing a track or playing it in a different country. Steve Jobs’s crippleware exists only to lure the entertainment industry in, not to control you in any meaningful way.

He wrote a Boing Boing post, not long after the Jobs letter went up, telling him that if Apple does indeed go through with this, he will be at the vanguard of a coming wave, saying:

I look forward to the day when the iTunes Music Store catalog shows a little warning icon next to those few holdout tracks sold with DRM, a skull-and-crossbones to tell you that you’re about to buy some poisonous bits.

It’s no “I have a dream,” but it’s something.

In Limbo: the Media

Jobs’ big public attack on the record industry attracted the attention of another group, this time mostly disinterested in the outcome: the print media. In many ways, they have the greatest stake of all in reporting on what Jobs says, because it’s their job to make sure that there’s news in the newspaper every morning. And Jobs is, as always, a gold mine of endless news-story opportunities.

One of the most important things about this media coverage is that, unlike a lot of bloggers, in the wider world it is not a given that music without DRM is better. It is to this crowd, not to the huddled, unwashed masses of bloggers yearning to breathe free, that Jobs is addressing his broadside against DRM.

The New York Times pounced first, not surprisingly for the “paper of record,” and in addition to their always-strong news coverage, reporter John Markoff did a nice job of contextualizing the story better than anyone else in the media. He writes that Jobs is on the attack at a moment of weakness for the music industry:

Mr. Jobs’s move comes as the music industry appears to be facing a crisis. Sales of its mainstay product—the album—continue to sink, and sales of digital music, including individual songs, have not increased fast enough to offset the decline.

With a paucity of hit releases to start the year, industrywide album sales are already down more than 15 percent from last year, the worst January performance since computerized sales tracking began in 1991.

At a forum in France last month, Rob Glaser, chief executive of RealNetworks, which operates the Rhapsody digital music service, predicted the widespread availability of unrestricted digital music within a few years. He said it was “an idea in ascendance and whose time has come.”

But Mr. Jobs is clearly the most powerful voice raised so far in support of a change. With the clout built on his company’s market share for both players and music, he has already prevailed against the labels in disputes over pricing.

Remember when I mentioned Glaser? That’s right, I heard crickets chirping, too.

Adding to this, the Economist became the most important mainstream publication I have seen to endorse selling music without DRM—due to the influence of one Steve Jobs, whose photo accompanied the article. (I’m not a subscriber, because it’s $150 a year, so I can’t say whether the editorial made it into print. I sure hope so. Readers of the Economist are highly influential.) They believe that a DRM-free music distribution system would allow Apple to do what it does best, and compete on merit rather than on lock-in, and benefit consumers, competitors, and the free market. Unsurprisingly, they view his greed as a benefit.

I am not a libertarian, but their logic here is hard to dispute. It’s a gem:

Apple can afford to embrace open competition in music players and online stores. Consumers would gravitate to the best player and the best store, and at the moment that still means Apple’s… [S]crapping DRM would probably increase online-music sales by reducing confusion and incompatibility. With the leading online store, Apple would benefit most. Mr Jobs’s argument, in short, is transparently self-serving. It also happens to be right.

But this “transparently self-serving” impetus is not universally recognized as good. Charlie Demerjian at the Inquirer, the Web equivalent of a newspaper, sees Jobs’ shift to embracing free-as-in-speech music as the height of hypocrisy. “So what does [Apple] do [under threat of European litigation]?” Demerjian asks. “[I]t is trying to abolish all DRM so it can keep iTunes and the iPods closed. If there is DRM, it has to open it all up.” It’s not clear to me how Demerjian reaches this conclusion—MP3s without DRM are freely distributable—but that’s an exercise for my readers.

Adam Engst, of TidBITS, also wrote a fantastic recap of Jobs’ argument, along with his own analysis, called, “Why This Letter, and Why Now?” Engst is skeptical, as Demerjian was, but he presents an excellently well-reasoned argument and lays out the entire story. Engst recognizes that, cynical or not, Jobs’ move has the potential to benefit all consumers. He says:

I don’t think Apple fears competition at all, and may even welcome it as an encouragement to innovation… In essence, Apple is saying to Norway and the other European countries [who want Apple to open FairPlay], “Look, this DRM wasn’t our idea, and without it, we couldn’t maintain the licenses that enable us to be in business. But we’d happily drop the DRM if we could; go talk to the music companies about that.”

Well, after all this, the CEO of Macrovision—which sells DRM technology for video, not audio, but the point stands—felt the obligation to respond. I didn’t see this reported on anywhere else but the Guardian’s technology blog, so I’m going to give them credit for it. What was his response? Uh: DRM’s not bad! And we’ll take it off your hands for you, if you want. But Jack Schofield, the blogger in residence, notes that Jobs isn’t handing over control of FairPlay anytime soon, because he’s a control freak. Does it surprise anyone that he would rather have completely unlocked music, where the user experience is as seamless as possible, than risk compromising the user experience of his DRM? “I’m certain that Apple’s fans will argue that the sheer superiority of its offerings would enable Apple to maintain or even increase market share even if it stopped artificially restricting competition—and of course I believe them,” Schofield writes. “Is he going to open up or not?” I think that’s a false choice—Jobs might just get his wish and unload DRM—but it’s a fair point.

Macworld gets the kicker for its excellent acknowledgment of the current reality. “[The music industry fears] file-sharing, of course—piracy. But that’s silly, because piracy is well-established by this point; we’ve had almost a solid decade of high-volume media piracy,” they write. “And for every pirate site or technology that’s destroyed by a phalanx of intellectual-property lawyers, two more sprout up in its place. Steve Jobs had the right idea when he announced the iTunes Store in 2003: Apple was not there to eradicate piracy, but to compete with it.” Macworld’s Dan Moren, I think, shows that he gets it here. Apple customers don’t buy music from the iTunes Music Store because they have to—they could get the music on CD, or pirate it. They buy from Apple because of high quality customer service and brand loyalty, Macworld says. “[P]eople are not going to flock to the Zune just because DRM is unlocked.”

That is a recognition I didn’t expect to see, ever, from a print publication.

Back Here on Earth: the Bloggers

Not surprisingly, four of the best tech bloggers out there posted terrific analyses of the situation and read the tea leaves of Jobs’ letter to see what the future held. It’s here, I think, that bloggers shine, because they aren’t responsible for the evenhandedness that hamstrings most print publications. (I’ve been edited before; I know what that means. The iPod may be far and away the best MP3 player on the market, but not giving some kind of credit, unearned or otherwise, to the competition means your editor will just call you up late at night and make you fix it.)

Jeff Jarvis starts us out with a terrific forward-looking glance. This may be, he seems to say, a turning point for consumers’ rights to use their own property. “Companies will no longer be able to make a living by stopping us from doing what we want to do,” he says. “You have to find the ways to make money enabling us to do what we want to do. It’s obvious. It’s reality.” This is the message that Google and YouTube get, and Sony (can you say ATRAC?) and the record companies don’t.

Erick Schonfeld of Business 2.0 says that Steve Jobs is using this to turn consumers who want DRM-free music against a mutual target. “Perhaps iTunes is getting to that point of critical mass where consumers are starting to complain. DRM is something that was conceived by lawyers, not by people who love to make great products for consumers,” Schonfeld writes. “It’s time to kill the DRM… [Jobs is saying] ‘But don’t blame me. Blame the record companies.’”


Free Culture @ NYU sees echoes of another big Net debate, the Google-vs.-China production that has been going on for some time now. Like Apple, the question is whether Google is responsible for agreeing to censor its content. “Why blame Google when China’s the real evil?” they ask. “Some information is better than none, and DRM’d music is better than no music. Except that in a world void of DRM, there still is music—on CDs, on p2p networks, and the Web.” The question, then, is how much to hold Apple responsible. They hold them more responsible than I do:

They could have dug in their heals [sic] and kept selling iPods without a music store, and the music industry could have figured out all these painful lessons on their own. Now Apple is an accomplice and has cried wolf: why should the music industry listen to a company that has been profitably going along with their plan for so long?

But, having said that, Apple is still the least of all of the various evils, and, as I said before, Apple has the Seinfeldian “hand.” Free Culture says, “Apple needs to offer them an ultimatum: no more DRM by 2008 and we’ll make sure you’re handsomely rewarded in the form of much more business.”

And, of course, there’s John Gruber, who I resolved that I will not blockquote endlessly in order to write my columns. I’d hate for you, dear readers, to think that I’m some sort of hack who uses well-known and prolific columnists to boot-strap my own writing. But he has a fantastic, sardonic line-by-line “analysis” of Jobs’ letter; an essay on some of the criticisms of Jobs’ letter, in which he refutes the idea that the possible cynicism of this move is a bad thing in and of itself; and a hilarious “translation” of Macrovision CEO Fred Amoroso’s response, the same one Schofield noted.

Now, what’s going to happen? I have no idea, guys. I’m rooting for the end of DRM regimes, personally, but I don’t have a crystal ball. The better question is, what do you think is going to happen?

Send me an e-mail. Post a comment. I’d love to know.

Quick Hits

  • Why aren’t there any design leaders in the PC world? The problem, Jeff Atwood sees, is that the titular head of the PC world—Microsoft—exercises little or no taste over their own products. Apple may not stick to standards, he says, but at least they go out of their way to pay attention to aesthetics. The absence of anyone at the head of the crowd in the PC world leads to some actively horrifying designs. I use a Mac and a PC at work, and I always dread going back to the PC.
  • Remember the Month of Apple Bugs? What a fizzle that was. Ooof. Tales of Being TJ noticed, and he says that we didn’t learn anything meaningful from MOAB at all, except that Macs are pretty secure. Glenn Fleishman writes in TidBITS that, in the end, “MoAB revealed one of the best aspects of the larger Mac developer community: generosity.” The Macalope noticed all this, and he nails it on the head: “Being a hacker is never having to say you’re sorry.”
  • Boy, wasn’t the release of Windows Vista a bummer? Nothing really revolutionary, almost nothing you can’t already have on your Mac, and it took six years. When even Time magazine notices this in its new-release review, called “Why Nobody Cares,” you’re in hot water, Redmond. Julio Ojeda-Zapata calls it as it is, a “shameless Mac OS X imitator,” and Dave Winer muses on what it was like when Microsoft competed on being smarter rather than being a monopoly. Remember, kids: Just Say No to Vista.
  • Do you have a lot of sticky notes lying around? And Excel? Microsoft may have flopped with Vista, but its Macintosh Business Unit is doing a terrific job of providing better Microsoft applications for the Mac than even Windows users get. And, as a birthday gift, a bunch of Microsoft geeks put up giant, sticky-note versions of the Office:mac icons. Wow.

Also in This Series

Reader Comments (4)

Nick · March 5, 2007 - 10:52 EST #1

The Electronic Frontier Foundation agreed, and took the most positive route of all of the anti-DRM activists. "We agree wholeheartedly with Jobs," they said in a press release on their Web site, "since EFF has been making exactly the same points for several years now. As a first step in putting his music store where his mouth is, we urge him to take immediate steps to remove the DRM on the independent label content in the iTunes Store. Why wait for the major record labels?"


So what did Magnatune and eMusic ever do to the EFF?

In one of his recent articles at Roughly Drafted, Daniel Eran Dilger makes the point that if Jobs did as the EFF wanted, the likely result would be that Apple would cannibalize the sales of smaller distributers who are currently offering unprotected downloads. That would be bad for those distributers; and it's hardly a gain for "consumers" either, since they can already get unprotected downloads from those smaller distributers right now if that's what they're looking for.

Frankly, I think this is a good illustration of just how hysterical the EFF and others who share its views have become. Their suggested course of action offers no advantage to buyers and positive damage to some sellers; yet the EFF wishes for it--presumably because it believes DRM is "evil" or something of the sort. This is a mirror image of the attitudes to be found at the RIAA.

And, of course, as Dilger also points out, if Jobs did this Apple's problem still isn't solved. Apple's problem is that it has to maintain the DRM--with all that means in terms of expense, misdirected effort, and risk. It has had to accept a contractual obligation to shoulder such burdens merely to be allowed to offer the content. If it sold some tracks without DRM, it would still have to put it on every _other_ track it sells. All this would do is add more complexity without removing the primary burden on Apple.

I say to hell with the extremists in both camps. I think we'd all better off without DRM on music downloads. And, as Jobs argued in the letter it's a fairly meaningless requirement when copyable CDs are around. However, Jobs's negotiating for a relatively benign form of DRM in the face of what the record labels would have actually preferred was a positive thing.

And as the Macalope pointed out claims that Jobs has cooked up some story merely because of current events don't stand up. Jobs has been saying the same things since before the iTunes Store even existed:
Wes Meltzer (ATPM Staff) · March 6, 2007 - 16:12 EST #2
Hi Nick,

I think you're correct that "we'd all be better off without DRM on music downloads," but you're sort of arguing against yourself, from what you said earlier in your comment.

The key to note, I think, is that as with most commercial transactions, I don't see why Apple should concern itself with what harm might come to eMusic or Magnatune. The selling point behind the iTunes Music Store isn't that their music comes with DRM; it's that it's far and away the easiest-to-use and most seamless process for buying music. People buy music from iTMS -- even I, who has no iPod at the moment -- because it's the best way to get digital music, and we're willing to accept a certain amount of DRM to get it.

What eMusic and Magnatune have done is fill a void in the market: No one was selling un-DRM-ed music (legally; allofMP3 doesn't count). So why the concern if Apple were to begin selling un-DRM-ed AAC files? It's none of Apple's concern if the simplicity and market presence of the iTMS hurts their competitors; eMusic and Magnatune are free to compete with them. That's the whole point of a free market. What gives us Wal-Mart and Microsoft, abusive and quasi-monopolistic competitors, also gives us Apple, the company that succeeds by making life better for its customers.

That's where you're struggling, I think. The EFF has a very specific perspective: They believe that any DRM technology violates the spirit, and probably the letter, of the Betamax decision (Sony Corp. of America v. Universal City Studios, 1984), which said that as long as a technology has sufficient non-copyright-infringing uses, the American people may not be denied those lawful uses just because some uses may be unlawful. More to the point, DRM is an anti-market mechanism, because it locks out competitors with potential innovative uses for digital media. Of course this is an extreme position. That's the point.

But the EFF doesn't go all the way with this. They concede that DRM is permitted by law, now, and ask Apple to grant DRM-free tracks to copyright holders who request it, not blow up their entire DRM regime.

You, too, make an extreme point. I think it's ironic that you can't recognize the extremism in the view that DRM is necessarily bad.

Also, you may want to check your facts. The Rolling Stone interview was published after the creation of iTMS; and I'm not sure it would be so much effort for Apple to sell DRM-free music, since most of the podcasts the iTMS distributes come without DRM.

I agree that music without DRM would be ideal. But that's an extreme position, and I recognize that. Some DRM is better than no legal digital music, you know?
Nick · March 8, 2007 - 12:02 EST #3
"I don't see why Apple should concern itself with what harm might come to eMusic or Magnatune."

I'm sure you don't. But there's no benefit to customers there since they can already get what would be offered there, which is a point worth making.

"Also, you may want to check your facts. The Rolling Stone interview was published after the creation of iTMS"

Also, you might want to check what I actually wrote before offering abuse. I didn't say the article published before the iTunes Store was what you call "created". Or do you accuse him of lying about what he said in the article as well?

*I'm* not taking an extreme position at all. DRM does cause people inconvenience--I don't buy content with it myself for that very reason--but better the relatively benign DRM of the iTune store than what Microsoft and Sony were offering if the labels are really going to insist on DRM before letting Apple have content. And I'm not going to call Steve Jobs a liar or dress up in silly costumes

or any of the rest of it, just because he won't immediately do what I wish when there's no benefit in it for Apple (since they must still put DRM on some content) but only further complexity, no benefit to the customers, and only harm to Magnatune and eMusic.

If Jobs can get the labels to come round, then great. But I'm not going to put on a yellow suit and start pant-hooting like a gibbon because he won't do exactly as I wish when I wish.
Michael Tsai (ATPM Staff) · March 8, 2007 - 12:46 EST #4
Nick: I find your first comment puzzling. I think there would be substantial benefit to customers if they could use the iTunes store to buy DRM-free tracks that are currently offered at eMusic or Magnatune. The iTunes store is much more pleasant to use, and it integrates with iTunes itself (and, thus, with iPods).

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