Jobs decries music gate for which he holds key

Plugged In

February 08, 2007|By Mike Himowitz | Mike Himowitz,Sun Columnist

Give Steve Jobs credit. Apple's CEO-for-life knows how to make chicken salad from something a lot less palatable than leftover coq au vin.

On Tuesday he stunned the music industry by asking recording companies to give up on "digital rights management" technology, which the industry refers to as DRM and the rest of the world knows as copy protection.

This is the software that keeps you from transferring music you've bought on iTunes and other online music venues to other folks who didn't pay for it.

It prevents you from playing copy-protected music purchased on iTunes on any portable player but an Apple iPod. And it prevents you from using your iPod to play copy-protected tunes you purchase from other sites, such Napster or Rhapsody.

In an open letter titled "Thoughts on Music," posted this week on Apple's Web site, Jobs attacked the whole notion of copy protection - including Apple's own - as bad for everyone involved in the music business.

"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," he wrote.

"This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat."

Cynics argue that if you believe that last statement, Jobs will be glad to sell you a deed to the Golden Gate Bridge, too.

It's a matter of record that Apple's proprietary copy protection helped turned the company into an online music juggernaut, cementing the iPod as America's music player of choice (90 million sold), and rescuing the computer company from the brink of irrelevance.

Music is the one market segment where Apple is the 800- pound gorilla and Microsoft is the also-ran. So why does Jobs want to kill the golden goose?

Maybe the world is telling Jobs and everyone else that the days of easy money are over. Online music sales are leveling off after years of phenomenal growth. CD sales are down, too. Illegal music trading is still rampant - if less visible than it was a few years ago.

Increasing numbers of customers also are figuring out how to work around copy protection schemes - which isn't hard, just a bit tedious.

Pressure overseas

More ominiously, Europe and Asia - Apple's next big growth markets - don't want anything to do with copy protection. The European Union is pressuring Apple to make its players and music compatible with everyone else's. These guys are serious - they've already made Microsoft's life miserable over similar issues.

China and the former Soviet states are even more threatening. Their populations spent decades assimilating communist ideologies that rejected the entire notion of intellectual property.

That leaves hundreds of millions of potential customers who see nothing wrong with pirating music, video, art, clothing or wristwatch designs. It doesn't even occur to many of them that anyone can "own" a song.

Whatever is going on in his mind, Jobs obviously felt compelled to say something, because a lot of people are blaming him for today's quagmire of incompatible digital music. So he turned around and blamed the music companies. Here's his explanation:

"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 percent 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 envelops each song purchased from the iTunes store in special and secret software so that it cannot be played on unauthorized devices."

That's fair and accurate - as far as it goes. Apple developed the so-called "FairPlay" copy protection system, which is fairly benign as such schemes go.

A song purchased on iTunes can be played on up to five computers (so everyone at home can enjoy it) and on multiple iPods. What you can't do is transfer it to a nonauthorized computer, either over the Internet or by copying it to a data CD or pocket drive.

However, iTunes songs can be "burned" onto a standard audio CD, which actually removes the copy protection. Users can then re-import the song as an unprotected digital MP3 music file, which can be played on virtually any device. It takes a few minutes and there's some quality drop-off - but not enough to bother most listeners.

With this scheme in hand, Apple was first to market with a legitimate online megastore, selling millions of downloads a day. The iPod became the de facto standard for the digital music player world, with 70 percent or more of the market. No other manufacturer has come close.

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