Steve Jobs Asks The Majors “Can We All Just MP3?”
Apple, Inc.’s, Chief Executive Officer, Steve Jobs has written an open letter to the public calling on the major music labels to license their music free of Digital Rights Managment (DRM) to Apple and others, to create a “truly interoperable music marketplace.”
It is the record labels who insist on making Apple’s iTunes store and other online stores resell their music bogged-down with DRM – and yet 90 per cent of the music they sell themselves via CDs is free of restrictions, he notes. The rub comes from the music Apple sells on its online iTunes Store. 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 per cent of the worldâ€™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 encompasses each song purchased from the iTunes store in special and secret software so that it cannot be played on unauthorized devices.
In recent weeks, Apple has come under fire from consumer groups and regulators in Norway, the Netherlands, Germany and France for its refusal to unlock the iTunes store so that its songs can be used on other MP3 players besides Apple’s iPods. But Jobs thinks this is unfair: customers are served well in the current market, by competing manufacturers, each with their own “top-to-bottom” proprietary systems, he argues.
Jobs thinks it is a bad idea to license Fairplay, Apple’s proprietary DRM system used for songs sold on iTunes, to others.
The most serious problem is that licensing a DRM involves disclosing some of its secrets to many people in many companies, and history tells us that inevitably these secrets will leak. The Internet has made such leaks far more damaging, since a single leak can be spread worldwide in less than a minute. Such leaks can rapidly result in software programs available as free downloads on the Internet which will disable the DRM protection so that formerly protected songs can be played on unauthorized players.
As for consumer lock, the vast majority of songs on MP3 players are DRM-free. Only three per cent of songs on iPods have actually been purchased from iTunes, Jobs says.