DRM doesn’t work, Jobs tells big four

7 Feb 2007

Apple CEO Steve Jobs has called on the big four music companies – Sony BMG, Universal, EMI and Warner – to consider licensing their music to Apple’s iTunes Store and other online outlets free of DRM (digital rights management) systems in order to create a truly interoperable music marketplace.

In an open letter entitled “Thoughts on Music” Jobs addressed calls for Apple to remove its DRM restrictions that prevent songs downloaded from iTunes from being played on digital music devices other than Apple’s iPod players.

While he argued that users can freely upload music from a variety of sources to their iPod – such as from CDs or music in MP3 or AAC formats – he said the “rub” comes from the licence agreements for 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,” wrote Jobs.

“These four companies control the distribution of over 70pc 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 envelopes each song purchased from the iTunes store in special and secret software so that it cannot be played on unauthorised devices.”

He said that Apple was able to negotiate landmark usage rights at the time, which include allowing users to play their DRM protected music on up to five computers and on an unlimited number of iPods.

“Obtaining such rights from the music companies was unprecedented at the time, and even today is unmatched by most other digital music services. However, a key provision of our agreements with the music companies is that if our DRM system is compromised and their music becomes playable on unauthorised devices, we have only a small number of weeks to fix the problem or they can withdraw their entire music catalog from our iTunes store,” Jobs warned.

He said that for DRM systems to work, companies like Apple must employ “secrets” in the form of “the most sophisticated cryptographic locks” to protect the music.

“The problem, of course, 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. They are often successful in doing just that, so any company trying to protect content using a DRM must frequently update it with new and harder to discover secrets. It is a cat-and-mouse game.”

Apple’s DRM system, he said, is called FairPlay and while he admitted there have been breaches, his company was able to repair them through updating the iTunes store software. “So far we have met our commitments to the music companies to protect their music, and we have given users the most liberal usage rights available in the industry for legally downloaded music.”

Aware of the consternation DRM is causing connected music lovers, Jobs proposed three future scenarios for the industry.

Firstly, to continue on the current course, with each manufacturer competing freely with their own “top to bottom” proprietary systems for selling, playing and protecting music. He argued that this alternative was unrealistic as people usually get their music from a variety of sources. He cited Apple’s case whereby some 90m iPods were sold in the world and some 2bn songs downloaded from iTunes. “On average, that’s 22 songs purchased from the iTunes store for each iPod ever sold.”

The second alternative is for Apple to license its FairPlay DRM technology to current and future competitors with the goal of achieving interoperability between different company’s players and music stores. On the surface this seemed like a good idea but, if there was a security leak, it would cause major damage and would be hard to repair through software upgrades and security updates.

The third alternative is to abolish DRM systems entirely. “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. This is clearly the best alternative for consumers, and 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. Every iPod ever made will play this DRM-free music.

“Why would the big four music companies agree to let Apple and others distribute their music without using DRM systems to protect it? The simplest answer is because DRMs haven’t worked, and may never work, to halt music piracy.”

He cited the example of the compact disc. “No DRM system was ever developed for the CD, so all the music distributed on CDs can be easily uploaded to the internet, then (illegally) downloaded and played on any computer or player. In 2006, under 2 billion DRM-protected songs were sold worldwide by online stores, while over 20 billion songs were sold completely DRM-free and unprotected on CDs by the music companies themselves.”

Jobs argued that if DRM requirements were removed, the music industry might experience an influx of new companies willing to invest in innovative new stores and players. He said this can only be seen as a positive by the music companies.

“Convincing them [the big four] to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly,” Jobs said.

By John Kennedy