As everyone probably knows by now, Steve Jobs came out strongly in favor for the music industry to drop DRM and sell unrestricted music. Mr. Jobs specifically said,
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.
However, there is a major music company which no longer wants iTunes to use DRM, but Apple insists otherwise. The label is eMusic and is represented by Nettwerk Music Group. Artists in that group include the Barenaked Ladies, Sarah McLachlan and Avril Lavigne. All Nettwerk releases are available from eMusic without copy protection from their website, however…
when the same tracks are sold by the iTunes Music Store, Apple insists on attaching FairPlay copy protection that limits their use to only one portable player, the iPod. Terry McBride, Nettwerk’s chief executive, said that the artists initially required Apple to use copy protection, but that this was no longer the case. At this point, he said, copy protection serves only Apple’s interests.
As others have stated (here and here), FairPlay protects Apple’s vertical business model more than it protects the music industry’s copyrights. FairPlay compels iPod users to use iTunes and iTune users to use an iPod. That’s the real reason Apple uses it.
Ed Felten over at Freedom to Tinker has a theory as to the real reason for Jobs’ turn around on DRM:
This is both a clever PR move and a proactive defense against European antitrust scrutiny. Mandatory licensing is a typical antitrust remedy in situations like this, so Apple wants to take licensing off the table as an option. Most of all, Apple wants to deflect the blame for the current situation onto the record companies. Steve Jobs is a genius at this sort of thing, and it looks like he will succeed again.
Before anyone attacks me or this blog of being anti-Apple, I just wanted to say that I personally think that Jobs is sincere in his offer to eliminate DRM. Sure, it would impact his vertical business model, but I think his lead with iPod and iTunes is so far ahead of any competition that he feels safe enough to eliminate the locks to that model.
You know what would seriously end piracy? If you added a model that allowed 100 downloads a month for $20 and unlimited downloads for $50. I would pay that every month. I think millions would, and then you could basically get the deal that Napster offered the record companies years ago that they stupidly declined. Keep the .99 per song for ala carte customers, but offer an unlimited service as well. I’m telling you, this would bring piracy to an almost standstill.
For now, I’m going to give Steve the benefit of the doubt. If the actual RIAA companies stop the DRM and THEN iTunes still is selling DRM music, then we’ll know he wasn’t being sincere.
But then again, Steve just wrote the fricken letter 2 days ago, maybe iTunes and eMusic haven’t come to an understanding yet for distribution from iTunes. Just because eMusic is doing it on their website doesn’t mean that Apple can just start doing it without the OK from eMusic.
I’d say give it a week or two. What’s with everyone wanting INSTANT change. The cracks of DRM are starting to show and it’s slowly crumbling…give it time and have just a tad more patience. That’s advice to normal, mentally stable people. The idiotic anti-apple apes will complain no matter what. They can’t help it.
2. “You know what would seriously end piracy? If you added a model that allowed 100 downloads a month for $20 and unlimited downloads for $50. I would pay that every month.”
Um, there are plenty of services that already offer that. Yahoo is one and it’s a lot cheaper than $50 per month. I think at one time it was only $7.
4. I think 2. means “downloads” no subscriptions that disappear when you don’t pay anymore. His prices are way out of line for that, though.
“Steve Jobs is a genius at this sort of thing, and it looks like he will succeed again.” NUFF SAID
So, Jobs is a major force in the online music industry and publishes an open letter to his peers calling for an end to DRM — and the priority is that we’re supposed to sit around, turn on all the cordless crystal balls we can find, warm up the ouija board — and discuss his motives?
Sounds like an exercise for a group of snowed-in gamers in group therapy. With no electricity and no beer.
5. “I think 2. means “downloads” not subscriptions that disappear when you don’t pay anymore.”
I can’t read minds, but he does say that he “would pay that every month.”
Actually, I did mean songs that don’t go away. Plain, un-DRM’ed mp3’s. I mean, I would subscribe every month and download more. However, if I stopped, I’d want to keep the songs. The pricing model, I’m sure, would have to be modified, but it’s a start. eMusic has a similar model. They offer open mp3’s that can be kept, and have a subscription that allows a certain number of downloads for a price. There should be an unlimited account, though. I mean, you are competing with free. Limewire, Bit torrents and such aren’t likely to go away anytime soon. I think Napster’s model was the best. $20 for unlimited downloads, I think was the offer they made the record companies. Sounds low, but how many MILLIONS of people would’ve done that, month after month???
#2,#5
eMusic has that already. As they are signing the Indy musicians, they also have the new music, if not the old. Also their service costs about 30 cents a track. They are also the largest Internet music provider after iTunes… Once you subscribe, they also have tons of freebies.
There is also music.download.com, they are totally free, but in many cases you will have to encode the music and make the meta-data by your self, although they have totally free tracks as well.
Also if you haven’t found it yet, you re-enable recording of the stereo mix in Vista by:
1. Right click on the volume task bar icon, and select recording devices
2. Right click in a clear area of list box, then click on Show Disabled Devices
3. Select Stereo Mix, then click on properties.
4. In the General tab, select enable from the Device usage combo box. Click OK.
5. Click Set Default. Now you are recording the stereo mix of the computer.
Launch Audacity, and you are once again copying DRM’d music to your hearts content. Although you will have to make the meta-data yourself.
I am trying not to be sanctimonious about Vistas Best in Class meta-data editing capabilities, so I will leave it there.
9. “I mean, I would subscribe every month and download more. However, if I stopped, I’d want to keep the songs.”
Cool idea, but it’s ready in place, it’s called bittorrent. 😉
Seriously, a person could download a lot of music in one month. I’d guess that a person could download every song they ever heard in that amount of time. There is no way the music industry would ever let you download all the music you ever wanted (up to that point in time), that you could keep forever, for anything less $100,000.
Although I really wish you did run the music industry!
1. Sure, it would impact his vertical business model, but I think his lead with iPod and iTunes is so far ahead of any competition that he feels safe enough to eliminate the locks to that model.
Agreed.
Music was the just the first step toward world dominance. TV shows was the 2nd, movies is the 3rd…
I myself fit into the oft-quoted 22-song average number of purchases from iTMS, by iPod owners, so he isn’t risking a lot of sales.
6 “Steve Jobs is a genius at this sort of thing, and it looks like he will succeed again.”
… at this sort of thing.
Agreed.
The fun thing is that with all of the people saying they would buy more music if it as DRM-free, Apple could actually increase its iTMS sales – and further crush the competition – by removing DRM.
Think of how many people have mentioned DRM-free alternatives to iTMS – who wouldn’t have that reason to avoid iTMS, or advise others to avoid iTMS??
I can just see Steve doing the Dilbert: “ka-ching! ka-CHING!”
Jobs’ statements here would sound more sincere if Apple wasn’t playing the same hardware/software lock-in games with the Mac.
To use the Mac OS and the ever-expanding line of Apple-brand Mac applications, you need to buy expensive Mac hardware, and only from Apple. The only Mac under $1000 is the Mini, which is not much of a value at $600 (monitor not included). If you want a computer with slots — if only to be able to upgrade the video card — the base price is $2500 for a PowerMac.
Most observers recognize that if Apple permitted its superior OS and apps to run on Wintel hardware, they would likely grab a much larger share of the software market and mount a real challenge to Microsoft, especially given the general ambivalence about Microsoft and Vista. But then they’d lose their hardware lock-in, though some argue convincingly that Apple could stay in the Mac hardware business and still do well. That Apple plays these games in a world of relentless hardware commoditization grows ever more absurd, especially as Macs have come to use the same components as Wintel PCs.
This pattern continues with the iPhone, for which third parties are not permitted to write software. One wonders, if the Mac were introduced today, whether Apple would allow others to write software for it.
SN is right: Jobs’ letter is much more likely an attempt to deflect the bad PR generated by the iPod/iTunes lock-in. One wonders how many iTunes customers even realize that this lock-in exists.
#12,
I reject your conclusions about OSX and adoption rates, as well as vendor lock in. If I were an apple stock holder, I would revolt at the notion of apply untying the operating system from the hardware. There are very real structural reasons that OSX is a bit player in the desktop operating systems market. Chief of which is, where is the problem with windows?
We could go back and forth with all sorts of details, but the simple fact of the matter is, users do not encounter virus problems in their day to day use. Users are happy to use the tools already built into windows. Microsoft has a history of making very reliable operating systems, and like it or not, that history is longer than apple. I see it as a feature that Microsoft has not upgraded their operating system in 5 years. In fact, most every non-nerd I talk to about their computer couldn’t be happier with their computer. To wit, some people are rejecting Vista, because windows 2000 from nearly a decade ago, fills all their needs. I still maintain Windows NT computers, because they suit their purpose perfectly.
In the ‘enterprise’ space which is still the vast majority of computers sold, and where I work, the idea of ‘switching’ is insane. It is like telling a gay person to be straight, or a straight person to be gay. Sure you could do it, but it wouldn’t ever feel right. Never mind, if you are unfamiliar with the costs of doing something like migrating an accounting system, of which I have about five that all seamlessly inter-operate, which I use on a daily basis, let me tell you. When companies fail at migrating accounting systems, they go out of business. Such a migrations NEVER occur unless there is some deal breaking problem with the existing software. It is not something that you do. Where I work, even suggesting such a migration could cost you your job.
Apple OSX marketing is directed at young complainers, with a propensity to blog on issues near and dear to their hearts. That is their target market. That is their market share. It is pegged around 2%. For a second lets just forget that this market also runs Windows.
I will never join this market, because they have called my work, my lively hood ‘crap’ or ‘easy’ for the better part of the last 20 years. It has become personal, not only for me, but for many people who fill the roll that I do in companies everywhere. For that reason alone, apple is destined to be a bit player in the operating system market evermore.
In conclusion, I think that if apple wanted to increase their market share, they would do the exact opposite of what you are suggesting. They would offer a version of their hardware with Vista pre-installed, not OSX. I think if they did that, they would rapidly become the largest PC manufacturer. I even think they would eclipse the mighty Dell.
If Apple did that, and offered me a standard apple themed windows compatible keyboard, I would buy an iMac in a second. But for now, apple has burned to many bridges, and the simple fact is, they are not windows compatible.
Duh!!!!
GregA -“I will never join this market, because they have called my work, my lively hood ‘crap’ or ‘easy’ for the better part of the last 20 years. It has become personal, not only for me, but for many people who fill the roll that I do in companies everywhere. For that reason alone, apple is destined to be a bit player in the operating system market evermore.”
Good post, I have to agree. Remember the Apple commercial featuring the turtle with the Intel Microprocessor chip on its back? The snobby and condescending negative ad campaigns have hurt them amongst PC users. Switch? I got your switch, right heah!
“They would offer a version of their hardware with Vista pre-installed, not OSX. I think if they did that, they would rapidly become the largest PC manufacturer. I even think they would eclipse the mighty Dell.”
I cant agree with that, but I do think if they offered OSX to the PC community, it would be a winner for them. Its not for me, but I beleive there is a market potential.
“
13. “They would offer a version of their hardware with Vista pre-installed, not OSX. “
Extremely interesting. I’d actually prefer if they would sell a system with both Vista and OSX. But I’m not sure if Microsoft’s licensing would allow it.
While I am not convinced of Jobs’ sincerity, I also would be surprised if Apple weren’t contractually obligated to not offer any DRM-free songs on iTunes. The big recording companies would surely have required Apple to agree to not sell competitor’s music DRM-free. It is a simple collective action problem and Apple has been forced into the role of monitoring. So, I’m not sure this is a valid argument to not believe Jobs.
And while teaparty geeks chatter over “might be’s” and “if’s” — the recording industry continues to react to Jobs’ open letter.
Time-Warner rejected it out of hand. EMI is getting serious about opening up. See http://tinyurl.com/yunpdc
Do you really think DRM is the problem with online sales?
I’ve bought some iTunes. They don’t sound bad, but they don’t sound as good as a CD do they? The CD comes with actual (and all of the) artwork and liner notes. Not so iTunes (or Rhapsody, Zune, Music Match, or whatever). Real CD’s have a larger catalog than any of the online stores. Do a little bargain bin shopping and you can get your favorite CD’s for close to online prices with all of the goodies just mentioned; better sound, better artwork, and liner notes.
I’ve bought iTunes. I’ve burned ’em to CD and played the CD in my car, in my annoying Windows computer at work, in my daughters boom box (Halloween Mix) while handing out Halloween candy. They worked fine … no real DRM hang ups. Personally, I think this whole DRM brouhaha is whining started by a bunch of tight wad techno geeks who like their music like they like their software – free and open source! Then media/bloggers looking for ratings/hits rolled this “terrible” injustice into a big deal.
If DRM was such a big, fat, hairy deal Apple’s iTunes store would not be the decent sized hit it has become. If the digital download offered a more comparable package to the CD it would probably be an even bigger hit. I like my liner notes: Who is the sax player on that track? Is that Michael McDonald doing background vocals on yet another album? What are the lyrics on that song?
Trust me, it is the value equation. Saving only about five bucks on an digital album (especially when there are not the manufacturing, packaging, or transportation costs for the music labels when distributing online) in exchange for audio quality, nice & complete artwork, and liner notes is the reason downloads haven’t completely destroyed the CD – not DRM.
21. “no real DRM hang ups”
I agree completely that buying CDs make more sense than buying from iTunes.
However, before you go ranting about how there is nothing wrong with DRM, you could at least read the links provided above which explain the problems with DRM in relation to this issue. If you still felt that DRM isn’t a problem then you could explain your reasons based on logic and supported by facts, not rants.
Did anyone for a second believe he was being sincere in wanting to get rid of DRM?
If you do, please email me, as I have a bridge I’d love to sell you.
Seriously, how can anyone with a functioning brain think that that he was being honest and sincere? His own music software is so locked down that only his branded mp3 players work with it…he put ridiculous 100 song restrictions on itunes phones from Motorola…at every turn he’s all about slamming the door shut on competitors, yet we’re supposed to believe he wants to get rid of DRM?
You apple fanboys will buy anything this guy sells you, won’t you?
Dear SN,
I’d hardly call it a rant.
I just don’t care one way or the other and I can’t believe that your average music shopper does either. This DRM thing is only an issue if you are using several competing devices that all use different DRM schemes. I’d bet most of us use one or the other but not several different devices. I think the main reason people gripe about DRM is because they want to download free stuff. I think the main reason legal downloads haven’t taken off is because those folks who are willing to pay for their music would rather have the nice package that comes with a CD.
some points to ponder:
yes, steve was being genuine in his remarks, he fully understands that DRM can’t work long term, so now is the time to make that known. and yes, he doesn’t know that most of the recording companies will balk at the idea (except EMI it appears) so it’s not like this will ever happen.
the “problem” is, even for DRM’d songs, the price is way too high. steve has really fought the recording companies to get down to .99 cents, but it’s still around 93% too high compared to what anyone can obtain them for free.
there IS an inflection point where pirating music is far less attractive, so a realistic senerio would be more along the lines of 6 cents for a non-drm download for a “new popular song”, 4 cents for an oldie but goodie, and 1 or 2 cents for all the rest.
anything more than those amounts, will continue to lose money for the record companies since technically, music is free now… but they aren’t of a new enough generation to understand their 1950’s based business model will not stand in the internet age. THEY have to change to more closely match “free” or there will be no money for them going forward, it’s really that simple.
Podesta,
You are insane.
First, it is not OK to cherry pick the data you want, that has been found to start wars. Are we looking at world market share or are we looking at US market share. As Apple sells computers to the entire world, I think the 1.6% market share number is probably the more appropriate and accurate number. I think I was being generous to call it 2%. The 5% number comes from a study done based upon web site hits. While the 1.6% number comes from actual earnings and counts of products sold across the industry.
On the other hand Microsoft only sells the Zune, to the United State. They only sell a hard disk mp3 player, which is a niche even among mp3 players. Do we compare the Zune to all mp3 players in a world market, or do we compare it to similar products in the markets in which it is sold?? If we compare it to mp3 player products in the entire world, the Zunes market-share is about 1%. If we compare it to similar products in similar markets, its share is about 20%.
Suck on it.
Same goes for Apples capitalization. Never mind that APPL has an outlandish (bubble like) price to earnings ratio. Their current capitalization is a function of Steve Jobbs reality distortion field. Currently 1/8th of their capitalization is fanboie speculation on the iPhone. I am a capitalist, so, if you think this stock is going up, buy it by all means necessary. However, don’t hold onto it, as this stock has all the qualities of a speculative stock, not the sustained earnings of a stock like Microsoft. If something were to happen to APPL stock, like Steve Jobbs cancer were to come out of remission, it would quickly lose about 30% of its value. That is more speculation than I am willing to endure as a stock holder, so I will pass.
I will grant you that small 1 to 10 employee companies who never plan on growing can use a product like Quick Books and a mac. On the other hand, if you are doing a lot of shipping, you will never be able to exploit FedEx and UPS wholesale shipping rates until you purchase a windows powered computer. If you don’t know what I’m talking about on the latter issue, you are not qualified to make a decision about what computer platform a company should use. So knowing from the get go, that you will be limited in growth and you will have to build a hybrid network anyhow, why would you choose a Mac? Pride perhaps? Is pride a sound reasoning for a business decision? I think not.
Switching in a business environment, in an already working system… Do you really want to discuss this? Is there any evidence AT ALL, that switching in a business environment is in any way profitable? That’s not FUD, that is just the cold hard business facts.
Also, you bring out the canard about users affluance??? Really, artist types are really more affluent than accountants by profession? I think not. I know for example, that I am far more affluent than every Mac user I know. That is a professional musician/slacker, and a high school art teacher. While all of the windows PC users I know are engineers and accountants. The two mac users I know, I bet both earn less than 30k a year, while just about every Windows user I know earns more than 100k. For example, I earned about 150k last year, with 75k of it in a year end profit bonus. That is in Michigan.
One more thing… When I want to get pictures off of my camera, I take the SD card out of the camera and place it in the SD card slot in the front of my computer. On XP, the computer launches Picasa, and automatically moves all my pictures from the card to the computer. On Vista, I don’t even need Picasa anymore. With OSX and your mac computer, you have to chase around for a USB cable. We are splitting hairs at this point, but the Windows PC has the obviously more elegant solution. We don’t even need the USB cable anymore. I guess you could buy a flash card reader dongle for your mac… Naw, Ill just use a PC with Windows.
If you want to know what FUD is, go to new.google.com, and type in Vista. There have been a tsunami of crap flood about Vista and its capabilities, up to and including out right slander. Despite that, Vista is the strongest selling operating system since Windows 95. But look on the bright side, the crap flood of misinformation about Vista depressed Microsoft stock, and created buying opportunities.
Finally, please keep using OSX, it gives me a clear indicator when I am evaluating new employees. OSX is a clear indicator on a resume, that a person likes to complain, and is perhaps a little insane.
ce8KY4 Cool, bro!