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Jobs to Music Industry — Free the Music

February 6, 2007

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Jobs to Music Industry — Free the Music

Steve Jobs’ rather unassumingly titled Thoughts on Music packs quite a punch. In what is surely going to be one of the most linked-to URL’s on the Internet, Jobs openly advocates an end to DRM-crippled music. Reactions from bloggers such as Don Dodge and Fred Wilson are positive and commend Jobs on this move.

Until now, it has been generally accepted that Apple uses DRM on iTunes tracks to protect its control on online digital music distribution. Turns out that Apple’s research data shows the average iPod has only 22 songs or 3% of music that comes from the iTunes store. So while iTunes and iPod appear to have been mega successes, it’s only the tip of the iceberg. The music companies require Applie to DRM-protect iTunes music and this constrains the market to those willing to live with DRM, liberal as the iTunes DRM policy may seem.

Jobs does a great job of educating us on how completely unbalanced and illogical the music industry’s approach is to online music distribution:

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.

He takes a jab at European countries such as France who have legislation requiring companies to make DRM-enabled music playable on any device: 

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.  

Overall, this is an excellent P.R. tactic by Jobs. With this one post, adverse public opinion will shift away from Apple and on to the music industry. Of course, this will not make much of a difference since the dinosaurs running  industry are too fixated on the old to look at the huge opportunities that await a music industry that is free.

Under a free and fair system, there will be no incentive for most people to download sub-standard quality music from questionable sources with embedded junk in the files. The pace of innovation in the music player business will increase as the market size increases. Artists will be fairly compensated for their work and the music industry will get fairly compensated for its marketing efforts. To make this happen, all the industry has to do is build on Apple’s successful 99 cent model and either remove DRM completely, or include DRM in such a way that from the perspective of the purchaser, the DRM does not exist. Another way to look at it is to change the positioning altogether — instead of Digital Rights Management, which serves to limit and take away rights, it should be DRG – Digital Rights Grant. By purchasing a piece of content, you are effectively granted the right to play it on any device that you have in your control.

This is not a very difficult technical problem. Most digital devices today have a configuration function which can be used by the consumer to customize various aspects of its operation. Why not allow the consumer to enter in a “key” of their choice. (Something akin to a password, but with limitations on the characters and the length allowed.) The consumer would enter the same key on every device or media playing software in her/his household. When purchasing digital content (the scheme can be applied to music, video, eBooks), the consumer provides the same key to the online store which locks the content with that key before allowing the consumer to download it. The content can then only be played on any device programmed with that key. This is the essence of DRG — the consumer is freely able to play the content he/she purchased on ANY device under her/his control. If he chooses to illegally share the content, he will also need to also share his key, and the other person(s) will need to configure his devices to use that key. It is certainly conceivable that those intent on stealing music will collude and share keys, but this can be mitigated by retiring keys that are known to be on illegal sharing sites. The music pirates are then left with a static collection of content. That should get boring very quickly.

I realize this is a gross over-simplification of the cryptographic controls that would be necessary to implement such content protection, but the main point I’m trying to make is that a simple and elegant system is possible if all the players cooperate. Device manufacturers and digital content distributors need to agree on a system that is easy for consumers to use. By focusing on “granting” rights for those who want to have legal content, instead of “restricting” rights for those bent on abusing the system, the industry can gradually change the game. If it has the will, there are plenty of super-smart people out there that can create a system that really works.

I truly believe that consumers will be quick to vote with their wallets for any system that makes content available under a fair pricing scheme and without limitations on playback on their devices. Jobs knows this and although it’s an uphill task, this open letter is a great first step in getting the music industry to wake-up to the realities of content distribution in a digital world. Whether the outcome is totally DRM-free music or music with real “fair play” rights, anything is better than the status quo.

Co-founder/CTO WhenHub; co-founder DNN Software; founder Edaptable; educator; Open Source proponent; Microsoft MVP; tech geek; creative thinker; husband; dad. Personal blog: http://www.kalyani.com. Twitter: @techbubble
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