Steve On DRM

I’m sure you’ve already seen this on a hundred blogs and on news sites but here goes again; Steve Jobs has written an important article, Thoughts On Music, in which he argues against DRM and joins us on the right side. This is pretty momentous and is sure to cause quite a stir with the idiots at the RIAA.

The third alternative is to abolish DRMs 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.

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. The music companies sell the vast majority of their music DRM-free, and show no signs of changing this behavior, since the overwhelming majority of their revenues depend on selling CDs which must play in CD players that support no DRM system… So if the music companies are selling over 90 percent of their music DRM-free, what benefits do they get from selling the remaining small percentage of their music encumbered with a DRM system? There appear to be none.

As is often the case with things Apple, Gruber has an excellent analysis of the article.

Is it a challenge to the major record labels? An answer to the increasingly hostile European governments (Norway, France, Germany) that are pressuring Apple to “open up” the iTunes Store? A message to the press to clarify Apple’s stance on DRM? A big fuck-you to Microsoft? … It is all of these things.

That lock-in provides a competitive advantage is undeniable. And if no one were complaining, I doubt we’d have seen this essay from Jobs. But as Jobs points out, with an average of just 22 iTunes Store songs sold per iPod, DRM-protected songs amount to a small percentage of the total music stored on most iPods. Jobs is saying that Apple doesn’t need it. Apple is not Microsoft; the only competitive advantage Apple needs is the quality of its products.