Steve Jobs and DRM

Apple has been getting some flack lately for the closed nature of its iTunes/iPod system, specifically the fact that the music that it sells on iTunes is protected by digital rights management (DRM) schemes which greatly restrict the ways in which the songs can be played.

Steve Jobs recently posted a rather surprising response to complaints about these restrictions in which he suggests that all DRM be dropped. Hooray! DRM is fundamentally flawed; I could go on about the reasons I believe this, but I think that Corey Doctorow does a pretty terrific job (in a talk to researchers at Microsoft, no less!) here.

That Steve Jobs, who arguably has benefited the most from DRM music (being the pioneer of legally sold music on the Internet) should take this position is notable and refreshing.

Unfortunately, it is also insufficient - his position is self serving and mistaken in two key ways:

• He claims that opening up the FairPlay system is impossible to do, and is thus calling on the music industry to remove DRM. While this is a nice call-the-bluff statement, it is hard to accept this assertion. From a technical point of view, there are a variety of ways in which FairPlay could be licensed to other manufacturers, opening up the ecosystem to competition and compatibility. It's obvious why Apple would not want to do this, however.
• He also claims that only a small percentage of music on peoples' systems is DRM protected, that the vast majority of the music is legally converted to MP3 with no copy protection whatsoever. This is likely true (it certainly is for me - I have about 25 songs purchased from iTunes out of about 5500 songs that I've ripped from CDs). However, from this fact he draws the ludicrous conclusion that consumers are locked in as a result. If you have even a few songs from a single store, and you can only play those songs on one device, why would you buy songs from another store that you can only play on a second device? That's simply a crazy demand to make of consumers.
  

Of course, I think Jobs is absolutely correct in pointing out that the music companies themselves sell the bulk of unprotected music and as such are not in a great position to decry unprotected music.

Which brings me to what I think is the larger problem with DRM in general (and the DMCA in particular): it tries to achieve the legitimate goal of copyright protection with draconian impositions on consumers. (See my earlier post asking why the music industry hates their customers; DRM is just another example of treating your customers like criminals.)

I'm no lawyer, but here how it seems to me. When I buy a DVD or a CD, I am buying the right to watch the movie or listen to the music whenever and whereever I want to. I obviously don't own the music itself (I cannot play it for profit, I cannot resell it, I cannot license it), but there have never been any restrictions on any personal use to which I choose to put it. The physical disk merely provides "proof of purchase" - it provides evidence of that right.

But as long as I have the disk, there is no intellectual property distinction between playing the movie/music directly from the disk or ripping it to a computer and playing it there (and thus avoiding the inconveniences of lost or scratched disks, or of having to put disks into trays, move them around, find them in a pile of disks, etc.) With CDs, which were invented before DRM and hence (for compatibility reasons) have no DRM, I can in fact rip the music to my hard drive and then toss the CD into a drawer and never pull it out again. This is also perfectly legal, as long as I do not share the music with others (since I purchased the right to listen to it for myself, I don't have the right to share it). I cannot, however, do this with DVDs because the act of doing so violates the DMCA, even though there is no copyright violation involved. And I cannot do this with DRM'd music that I purchase off of the Internet.

This is why I only have about 25 downloaded songs (I buy the CDs for everything else). I would be very surprised if I were alone, which suggests that there is huge financial opportunity that DRM is damping.

I assume that the music industry imposed draconian DRM on Apple largely because of the widespread theft they saw with Napster. What the industry doesn't understand, though, is that that Napster arose from its own failure to address a significant market demand. Now, even though they have (grudgingly) agreed to address that market demand, they continue to treat their customers as presumed criminals.

Here's some simple math that the music industry should consider: given the choice between selling $100 worth of music and suffering, say, 5% piracy, or selling $200 worth of music and suffering 20% piracy, most rational businesses would choose the latter in a heartbeat. After all, making $160 sure beats making $95. I admit that my numbers here are pulled out of thin air, but I would bet that whichever music company is first to take the risk and remove the DRM requirement will find that indeed piracy goes up a little, but overall sales will go up even more.

Too bad none of the major publishers have the vision or the guts to even give it a try. Too bad for them, because they're leaving money on the table, and too bad for consumers.