Steve Jobs on DRM: sense and nonsense

Kudos – mostly – to Steve Jobs for his remarks on Apple and DRM. I like his closing comments:

Convincing [big music companies] to license their music to Apple and others DRM-free will create a truly interoperable music marketplace.  Apple will embrace this wholeheartedly.

Yes please. But while I applaud these remarks, I have to note some curious logic in the rest of his defence of Apple’s DRM policy. Remember, the essence of the complaint against Apple is that it will neither license its FairPlay DRM to others, nor support other DRM schemes in its iTunes store. The consequence is that iTunes customers are locked to Apple’s software, and for portable devices, largely to its hardware as well.

Jobs says Apple doesn’t license FairPlay because it could compromise its “secrets”:

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.

However, Jobs has already stated that such secrets often get cracked anyway. The intransigent problem is that the keys reside on the user’s own machine:

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.

This is a greater impediment to FairPlay’s security than licensing it would be. Further, any iTunes purchase can be burned to CD and ripped to unprotected files, albeit with loss of quality if you choose a compressed format. I also note that DVD Jon (as far as I’m aware) achieved his success at cracking DRM by reverse engineering, not industrial espionage.

So this statement makes no sense:

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.

Apple has actually concluded that it can’t “guarantee to protect the music” anyway, irrespective of whether it licenses FairPlay.

Further quibbles: Jobs sees a “a very competitive market”, where others see Apple’s unhealthy dominance, particularly in portable music players.

Another. Jobs says:

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.

No Mr Jobs, they are not locked into the iTunes store (yet). They are locked into the iPod to play this music back. Well, subject to the caveats already discussed. And what about iTunes exclusives?

Finally, Jobs notes that “The music companies sell the vast majority of their music DRM-free”, referring to the continuining importance of CD sales, which greatly exceed online sales.

Yet CD sales are declining and will continue to do so. We are having this discussion because we know that those figures will swing, probably quite fast, and that online or subscription sales will dominate the music business.

Users would love to see more legal, DRM-free downloads. In the meantime, Apple’s refusal to interoperate its DRM with others remains anti-competitive.

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6 thoughts on “Steve Jobs on DRM: sense and nonsense”

  1. It’s funny how it’s the successful company that gets jumped on for being anti-competitive. MS has it with Office, Apple has it with iPod.

    Note, for instance, that MS does exactly the same thing as iTunes with Zune but that isn’t considered “anti-competitive”. Zune doesn’t even tell you the price of songs, just the “points”. Also, the other way around, no one says that Apple is “anti-competitive” because it doesn’t handle its APIs the way the MS is being forced to.

    Funny old world when you do something so well that you become the market leader, isn’t it?!

  2. > Note, for instance, that MS does exactly the same thing as iTunes with Zune
    > but that isn’t considered “anti-competitive”.

    Who says? I consider it anti-competitive; further, I wouldn’t purchase a Zune song any more willingly than I would an iTunes song.

    It is just not so important because Zune has a tiny market share.

    Nobody outside Microsoft can make sense of the Zune lock-in; it looks stupid.

    I agree with your other remarks; that’s just how it works.


  3. Tim,

    Fair enough 🙂

    Incidentally, I actually agree that the lock-in of FairPlay is enough to ensure that I won’t buy a sone from iTunes either.



  4. Surely the riposte to the ‘licensing Fairplay’ argument is protected WMA – Microsoft licenses it all over. Not much cracked.

    However, the music player market is competitive as hell. Everyone has access to the technologies – flash memory, small hard drives. MP3 is easy; WMA gets licensed; even AAC can be played back. You can work out where iTunes stores songs. Apple doesn’t have any lock-in on people ripping CDs; and iTunes exclusives are hardly a lock-in to the iTunes/iPod combo, because (as you pointed out) you can burn it to CD.

    Apple had no natural advantage in the music player market, no monopoly to exploit. I don’t see why the leading player in a market should have to open up just because it’s the leader.

    Even the AAC format that Apple uses as the default encoding in iTunes isn’t its own – it’s a standard. It’s open for licensing. Yes, the iPod only works with iTunes. But to work backward from the iPod, which people choose because they like it, to Apple having to open up its whole system, doesn’t quite gel to me.


  5. > But to work backward from the iPod, which
    > people choose because they like it, to Apple
    > having to open up its whole system, doesn’t
    > quite gel to me.

    Well, they buy their first iPod because they like it. They buy their second iPod because they have to, or else lose access to their iTunes purchases, or have to compromise with lossy-compressed songs burned to CD and perhaps ripped again with loss of quality.

    Perhaps they still like the iPod, perhaps they don’t. But the lock-in doesn’t seem good to me. I think we would benefit from a more open system.

    That said, I take your point completely: Apple is where it is because of the failure of others to compete effectively – especially Microsoft, I suppose, though both Creative and Real in this market before Apple.


  6. Don’t you get frustrated that you can only use iTunes?

    I found it far too restrictive. It’s like buying a Toyota and only being allowed to use gas from the Toyota garage – or a Hotpoint Washing Machine, but only being allowed to use their own brand of washing powder.

    They should open up the spec of the iPod so that you can use any kind of audio format, instead of trying to monopolize the marketplace.

    Just my two pence! :o)

    Peace out x

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