In early February, Apple CEO Steve Jobs published an extraordinary memo about the music industry, iTunes and DRM (digital rights management), the technology used to lock iTunes Store music to Apple's iPod and iTunes Player. In the memo, Jobs said that "DRMs haven't worked, and may never work, to halt music piracy," and offered to embrace a DRM-free music-sales environment "in a heartbeat," if only the big four music companies would let him.
I doubt Jobs' sincerity. I suspect he likes DRM because it creates an anti-competitive lock-in to Apple. I think he's trying to shift blame for the much-criticized DRM to the music industry, whose executives are twirling their mustaches and declaring DRM to be the only way forward for their industry.
The context for this is complex and global.
DRM technology is used to lock music -- and movies, books and video games -- to a specific vendor's products. It's intended to ensure that copyright holders earn royalties from their music or movies, control how they are distributed, and prevent them from being copied without permission.
Yet the dream of a copy-proof song or movie is a logical absurdity. DRM systems -- built over a span of years at a cost of millions -- are routinely cracked in an afternoon by bored teenagers. BigChampagne, the P2P (peer-to-peer) monitoring service, reports that it takes a mere 180 seconds for a DRM'ed song released on the iTunes Store to show up as a free P2P download. Anyone who thinks that companies are going to make bits get harder to copy in the future is either not paying attention or kidding himself.
DRM's principal effect is legal, not technical. Since the passage of the 1998 Digital Millennium Copyright Act, it's been illegal to break DRMs in this country. It doesn't matter if DRM restricts access to something you have every right to use (for example, a DRM that region-locks a movie you've bought so that it won't play in the U.S.). You're not allowed to break DRM, and corporations certainly can't field products that break it. The results are ugly: Companies like 321 Studios (whose DVD X-Copy software lets you make otherwise legal backups of your DVDs) were sued into oblivion by the motion picture companies for trying such a thing.
So if you shellac a one-atom-thick layer of DRM over a product, you get the full power of the American legal system as a weapon to use against competitors. Apple may have created a successful "Switch" campaign by reverse-engineering Microsoft products like PowerPoint to make Keynote, an Apple program that lets you run old PowerPoint decks on your Mac, but Microsoft can't create a "Switch to the Zune" campaign that offers you the ability to play your iTunes Store songs on a Zune, Microsoft's latest abortive iPod-killer.
Although Apple's DRM is wholly ineffective at preventing copying, it does manage to raise the cost of switching from an iPod to a competing device. Every iTunes song you buy for 99 cents amounts to a 99 cent tax on switching from an iPod to a Zune. That's because your iTunes songs won't play on your Zune -- or on any other player, save those made or licensed by Apple. Jobs tries to skate around this in his memo, suggesting that only a tiny fraction of the music on iPods comes from his music store, and so the anti-switching effects are minimal.
While it's true that most of us haven't loaded our 10,000-song iPods with $9,900 worth of iTunes songs, it doesn't follow that the switching cost for even casual iTunes customers is negligible. If you'd bought just one iTunes track every month since the launch in 2003, you'd have rung up $82 in lock-in music. Throw in a couple of $9.99 albums and maybe an audiobook or two and you can easily find yourself in $150 down the lock-in hole.
That's $150 you kiss goodbye if you buy a sexy little Creative Labs Zen or a weird little no-name from the wildly imaginative entrepreneurs of Malaysia. Not only won't your iTunes Store music play on those devices, it's illegal to try to get it to play on those devices.
Jobs is right. If you had 10 grand worth of proprietary music on your iPod, his company's iTunes would be anti-competitive. But that's not to say that $150 worth of lock-in (enough to double the cost of many portable players) isn't a powerful disincentive against switching from the iPod. I'm a lifelong Apple fan boy -- I have an actual Mac tattoo -- but even I remember the dark time of the Performa, when Apple's hardware trailed so far behind the market leaders that buying it was like wearing a hair shirt. I think that it's reasonable to assume that Apple won't always make the world's best music player. I'd like to keep my options open. But the longer you own an iPod, the more likely it is you'll buy more iTunes music, and the fewer options you'll have.
Jobs' DRM stance has historically been all over the map. He's defended and decried DRM and consumer rights depending on which way the wind blows, and the spirit moves him. There was the "Rip, Mix, Burn" campaign, when Apple celebrated the idea that you could take DRM-free music off of CDs and load it onto your iPod (if you want to do the same thing with a DRM'ed DVD, you're an outlaw). Back in 2002, he went on the record with this gem: "If you legally acquire music, you need to have the right to manage it on all other devices that you own."
But later, an Apple attorney told a tech conference that Apple would keep its DRM even if the labels asked to have it removed. And when Real announced that it had put a Real DRM player on Apple's iPod so that you could listen to its DRM music on Apple's player, Apple responded with legal threats.
Actions speak louder than words. Artists have asked -- begged -- Apple to sell their music without DRM for years. From individual bestselling acts like Barenaked Ladies to entire labels of copy-friendly music like Magnatune, innumerable copyright holders have asked Apple to sell their work as open MP3s instead of DRM-locked AACs. Apple has always maintained that it's DRM or nothing. These artists believe that the answer to selling more music is cooperating with fans, not treating them as presumptive pirates and locking down their music.
If you rip your own CDs and load them onto your iPod, you'll notice something curious. The iPod is a roach motel: Songs check in, but they don't check out. Once you put music on your iPod, you can't get it off again with Apple's software. No recovering your music collection off your iPod if your hard drive crashes. What's more, Apple prevents copying indiscriminately. You can't copy any music off your iPod. Apple even applies the no-copying measure to audio released under a Creative Commons license (for example, my own podcasts), which prohibits adding DRM. The Creative Commons situation is inexcusable; because Creative Commons licenses are machine-readable, iTunes could automatically find the C.C.-licensed works and make them available for copying back to your computer.
Then there's the matter of the movies and TV shows sold through the iTunes Store. The first adopter of this marketplace was Disney/Pixar. Jobs is the single largest shareholder in Disney/Pixar. Apparently, he forced himself to add DRM to his Pixar movies, turning a deaf ear to his own impassioned arguments to leave the DRM off. Videos you buy from the iTunes Store can only be watched on Apple's products. So every movie you buy from Apple is a tax down the line of switching from Apple to a competing product.
Some have argued that Apple's famous fetish for consistency in user experience stops it from putting only some tracks into the iTunes Store without DRM. The reasoning goes that users will be confused by a store that sells both DRM and non-DRM music. But if this is so, how is it that Apple currently offers DRM-free podcasts alongside DRM'ed, pay-for-use podcasts in the selfsame store?
If DRM is designed to prevent copying, why is it that vendors always end up building "security" systems with all the integrity of a wet paper bag? Jobs explains it himself. All cryptography relies on keeping a set of keys that are secret against attackers. If Jobs sells you a download of "The Incredibles," he has to give you the keys, otherwise all you have is a bunch of noisy, encrypted junk, not a movie.
"The problem, of course," Jobs writes, "is that there are many smart people in the world, some with a lot of time on their hands, who love to discover such secrets and publish a way for everyone to get free (and stolen) music."
But Apple -- and DRM -- tries to resolve this problem by hiding the keys from you even as it delivers them to you. DRM relies on hardware and software that treat you, the guy who owns the device, as an untrusted party. DRM hides its keys on your own bought-and-paid-for equipment, locking you out of seeing what your own machine is doing.
Like all secrets, DRM can corrupt its host. Just look at Sony's last foray into DRM, which included a "rootkit," malicious software used by virus-writers to hide their programs' existence from anti-spyware apps. Conceptually, spyware and DRM have the same goals: to do something to your computer that you don't want to happen. Sony's rootkit infected 500,000 American computer networks, including military and government systems. Apple's DRM is even more widespread.
In Europe, Apple's DRM has attracted unwelcome attention from regulators in Scandinavia, France and Germany. Europe is slowly adopting the same treaty that gave birth to the DMCA, the WIPO Copyright Treaty of 1996. Europe's version, the EUCD, has to be incorporated into each member-state's national law, and each law is a fresh opportunity for consumer rights activists to point out the anti-competitive effects of the ban on breaking DRM, with Apple's iTunes front and center.
European regulators seem powerless to overturn the EUCD, so instead they're turning to regulatory answers to iTunes' lock-in. Norway's ombudsman has been on the forefront of this, ordering Apple to open its DRM to interoperability. This demand makes strange allies out of DRM fighters and the entertainment giants they do battle with.
Activists like the idea of regulators bringing DRM to heel. Music companies like the idea of being able to negotiate pricing and delivery of their songs. In their utopia, you'd be able to buy music at prices they set (not just 99 cents a song) from a variety of stores and play them on a variety of devices from a variety of vendors. The incredible market dominance of iTunes/iPod has made Apple into a veritable Wal-Mart of digital downloads. And that has the music companies in a major snit.
Recently, Warner Music chief Edgar Bronfman Jr. tried to get Apple to give him control over pricing of Warner's tracks, so that he could charge more for top-40 music and less for back-catalog. Bronfman was handed his hat and laughed out of Cupertino. After all, what was he going to do, pull Warner's music out of the iTunes Store and only offer it through stores whose products can't play on iPods? It's no surprise that Bronfman responded to Jobs' music memo with an infantile tantrum: "completely without merit ... completely without logic." Bronfman doesn't want no DRM, he wants a DRM that benefits the music companies without leaving any value on the table for the tech companies.
This weird alliance of copy fighters and music giants has Apple caught in a squeeze. The real meat in Jobs' memo is in his excuses for not opening up Apple's DRM to competitors. He explains that interoperability is a technical impossibility, since DRM requires that users be locked out of its secrets, and once you have multiple vendors, one of them is certain to leak the secrets.
DRM-cracker supreme Jon Johansen points out that Microsoft's "interoperable" DRM, PlaysForSure, is no less secure than iTunes, despite a wide range of licensers. Of course, iTunes isn't secure: Otherwise, it would take more than three minutes for iTunes music to migrate to P2P. Since PlaysForSure is also insecure, they can be called equivalent. Jobs' argument is that his sieve will leak faster if regulators make him go interoperable.
Of course, it's easy for Jobs to aver that he will drop DRM if the labels let him. As Princeton's Ed Felten points out, Jobs says the labels call the shots on DRM and forced him to add DRM to iTunes Music. So it's hardly brave defiance to swear to take it off when the labels tell him to. As Felten puts it, "Apple is like the kid who says he is willing to go to the dentist, because he knows that no matter what he says he's going to see the dentist whenever his parents want him to."
At the end of the day, DRM is the biggest impediment to a legitimate music market. Apple doesn't sell music because of DRM -- it sells music in spite of DRM. The iTunes Store proves that you can compete with free. People have bought billions of dollars worth of music from Apple because it offered a better user experience. But no one bought for the DRM. Some people bought in spite of it, some bought in ignorance of it, but there's no customer for whom DRM is a selling point. No one woke up this morning wishing for a way to do less with her music.
When honest people are suckered into buying DRM, they often discover that the music they bought doesn't work as well as the music their friends get free on P2P. In fact, there's no better incentive to venture into the P2P waters than getting access to the music you may have already bought. Far from protecting music from illicit copying, DRM practically demands illicit copying. With DRM, the only way to get music that plays on all your devices, past and present, is to rip it off. If you buy DRM, you end up being part of someone's business model, and a slave to the lock-in.
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