Why Apple's Advice on DRM Won't Be Heeded

Apple's CEO and lead "Strategist", Steve Jobs, wrote an open letter to consumers and executives alike this past week outlining three basic strategies for solving the problem with DRM-encoded music. History tells us, this advice will be ignored, and most likely assaulted by the music industry.

The crux of the matter, as always it seems, centers around DRM-wrapped music. Every (legal) online music store in existence, in order to license music from the big four labels (Universal, Sony BMG, Warner and EMI - who control over 70% of all music) must agree to wrap that music in DRM. DRM, in case you just exited form a 1960's-era nuclear bunker, is short for Digital Rights Management, and contains "secret" code for making sure that downloaded songs are not played on any device other than the one the owner possesses (more or less). The point is that music companies don't want people downloading files from an online store and then uploading those files to the Internet... but that doesn't make sense.

You see, according to Jobs (and anyone else who's been breathing for over 10 years), users can ALREADY upload unprotected music online anytime they want. It's called the CD - an unprotected format that has not had DRM since its inception. And DRM can never be added since the rather large installed base of CD players do not support it (just ask Sony about trying that one).

Now you may think that downloadable music is overtaking the CD, however this is not the case - at least not yet. Right now, Apple's numbers put the CD as leading downloadable music 10-to-1. This means that all of this DRM-hoopla is over a 10% marketshare of revenues when the record companies themselves are authorizing 90% of their music to be sold DRM-free. WHAT?!?!

So what is the end result? Well, it's simple: Microsoft's downloadable music store only plays its files on Zune players, Sony's online store only plays its files on Sony players, and Apple's iTunes only plays on iTunes players. Consumers hate this, but it's not the online stores' fault. Blame the record companies' double standards on DRM protection. If it weren't for DRM, Apple says it would open up iTunes music to play anywhere - immediately.

In the past, I have felt that some of the blame belonged to the online stores - attempting to increase sales of its own branded music players. What I've found is that this is most likely only a very small part of the picture. The real issue is that licensing out DRM technology to other venders (which would allow iTunes music to play on Sony or Zune players for instance) simply opens up a can of worms. The can of worms is that DRM is basically a bunch of secrets - and we all know what happens when too many people know a secret (psst: it's not a secret anymore). Then the mass updates must happen - not only to the company's players, but to the licensed players as well - and that's very hard to manage.

What does this all mean? Simple - as should always be the instinct - blame the record industry, not the online stores and player manufacturers (of course Sony is somewhat playing both sides). If record industries would simply pull DRM for online music, everyone could get back to the business of making good music, making good players, and providing services for consumers... and maybe, just maybe, they could start running their company like a productive, responsible business instead of a professional racketeering club.