Thursday, February 08, 2007

Apple - Thoughts on Music

I haven't talked much here about DRM, since it really seems pretty simple to me (i.e. it doesn't work and never will), and would ulimately just turn into a rant. But with someone like Steve Jobs weighing in, I thought I should mention it. It's good that someone who may actually have some influence seems to recognize that it doesn't work.

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. If anything, the technical expertise and overhead required to create, operate and update a DRM system has limited the number of participants selling DRM protected music. If such requirements were removed, the music industry might experience an influx of new companies willing to invest in innovative new stores and players. This can only be seen as a positive by the music companies.
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So, the gist seems to be that DRM sucks and that Apple uses it only because they are forced to by the music companies. I'd love to hear a response to Jobs' points from someone on the other side. But I'm sure we won't, since there really isn't any resonable position.

One thing that did bug me about Jobs' letter, though, was when he described the existing course, where it seems that he doesn't think DRM is such a big issue, and I think he misses the point a little bit.
Some have argued that once a consumer purchases a body of music from one of the proprietary music stores, they are forever locked into only using music players from that one company.
Through the end of 2006, customers purchased a total of 90 million iPods and 2 billion songs from the iTunes store. On average, that’s 22 songs purchased from the iTunes store for each iPod ever sold.

Today’s most popular iPod holds 1000 songs, and research tells us that the average iPod is nearly full. This means that only 22 out of 1000 songs, or under 3% of the music on the average iPod, is purchased from the iTunes store and protected with a DRM. The remaining 97% of the music is unprotected and playable on any player that can play the open formats. It’s hard to believe that just 3% of the music on the average iPod is enough to lock users into buying only iPods in the future. And since 97% of the music on the average iPod was not purchased from the iTunes store, iPod users are clearly not locked into the iTunes store to acquire their music.

Sure, the average iPod today only has 3% DRM music on it, but what about tomorrow? People are only just now starting to buy their music online. Most people who invest in an iPod in the first place probably already have a vast library of CDs that they want to rip and put on it. However, if they start buying music from iTunes, why would they want to continue buying CDs? At some point that 3% is going to get to be a number that is significant, and will sway the consumer's decision. So, while Jobs may be correct right now that it isn't a big issue, when he's talking about continuing on the current course, he's talking about the future, and future where more people get more music online must be considered in the argument. Also, I would bet that there are quite a few iPods with no music from the iTunes store on them, which would skew those numbers a bit.

Anyway, the bottom line with DRM is that it doesn't in anyway affect music piracy. Just go look for illegal versions of any song you want and see how hard a time you have finding them. All it does is hamper legitimate customers' use of their rightly acquired media.

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1 comment:

Chris Howard said...

That's a very interesting interview, because before that I had thought Jobs was on board all the way with DRM. It's nce to find out that it isn't the case, but also kind of disheartening to see that he doesn't care enough to help kill it. DRM is the one thing that keeps me from buying online music.