Steve Jobs Posts His Deep "Thoughts On Music"
Apple CEO Steve Jobs posted a letter to the Apple site today, asking labels to "abolish DRMs completely" because they've been ineffective in battling music piracy. Convincing the labels that killing DRM is in their best interest? Take it away, Stevie.
With the stunning global success of Apple’s iPod music player and iTunes online music store, some have called for Apple to “open” the digital rights management (DRM) system that Apple uses to protect its music against theft, so that music purchased from iTunes can be played on digital devices purchased from other companies, and protected music purchased from other online music stores can play on iPods. Let’s examine the current situation and how we got here, then look at three possible alternatives for the future.
To begin, it is useful to remember that all iPods play music that is free of any DRM and encoded in “open” licensable formats such as MP3 and AAC. iPod users can and do acquire their music from many sources, including CDs they own. Music on CDs can be easily imported into the freely-downloadable iTunes jukebox software which runs on both Macs and Windows PCs, and is automatically encoded into the open AAC or MP3 formats without any DRM. This music can be played on iPods or any other music players that play these open formats.So Jobs is telling 'em that they've got nothing to lose by eliminating the DRM system and its technical "requirements," and that by doing so the industry might see an infusion of new innovators and investors, interested in participating in this wild and free MP3 world. Buying it? Or too speculative to convince the labels?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% 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 unauthorized devices.
Apple was able to negotiate landmark usage rights at the time, which include allowing users to play their DRM protected music on up to 5 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 unauthorized 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.
To prevent illegal copies, DRM systems must allow only authorized devices to play the protected music. If a copy of a DRM protected song is posted on the Internet, it should not be able to play on a downloader’s computer or portable music device. To achieve this, a DRM system employs secrets. There is no theory of protecting content other than keeping secrets. In other words, even if one uses the most sophisticated cryptographic locks to protect the actual music, one must still “hide” the keys which unlock the music on the user’s computer or portable music player. No one has ever implemented a DRM system that does not depend on such secrets for its operation.
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 is called FairPlay. While we have had a few breaches in FairPlay, we have been able to successfully repair them through updating the iTunes store software, the iTunes jukebox software and software in the iPods themselves. 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.
With this background, let’s now explore three different alternatives for the future.
The first alternative is 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. It is a very competitive market, with major global companies making large investments to develop new music players and online music stores. Apple, Microsoft and Sony all compete with proprietary systems. Music purchased from Microsoft’s Zune store will only play on Zune players; music purchased from Sony’s Connect store will only play on Sony’s players; and music purchased from Apple’s iTunes store will only play on iPods. This is the current state of affairs in the industry, and customers are being well served with a continuing stream of innovative products and a wide variety of choices.
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. Or, if they buy a specific player, they are locked into buying music only from that company’s music store. Is this true? Let’s look at the data for iPods and the iTunes store – they are the industry’s most popular products and we have accurate data for them. 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. Its 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.
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 seems like a good idea since it might offer customers increased choice now and in the future. And Apple might benefit by charging a small licensing fee for its FairPlay DRM. However, when we look a bit deeper, problems begin to emerge. 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.
An equally serious problem is how to quickly repair the damage caused by such a leak. A successful repair will likely involve enhancing the music store software, the music jukebox software, and the software in the players with new secrets, then transferring this updated software into the tens (or hundreds) of millions of Macs, Windows PCs and players already in use. This must all be done quickly and in a very coordinated way. Such an undertaking is very difficult when just one company controls all of the pieces. It is near impossible if multiple companies control separate pieces of the puzzle, and all of them must quickly act in concert to repair the damage from a leak.
Apple has concluded that if it licenses FairPlay to others, it can no longer guarantee to protect the music it licenses from the big four music companies. Perhaps this same conclusion contributed to Microsoft’s recent decision to switch their emphasis from an “open” model of licensing their DRM to others to a “closed” model of offering a proprietary music store, proprietary jukebox software and proprietary players.
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.
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. Though the big four music companies require that all their music sold online be protected with DRMs, these same music companies continue to sell billions of CDs a year which contain completely unprotected music. That’s right! 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. 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.
Much of the concern over DRM systems has arisen in European countries. Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free. For Europeans, two and a half of the big four music companies are located right in their backyard. The largest, Universal, is 100% owned by Vivendi, a French company. EMI is a British company, and Sony BMG is 50% owned by Bertelsmann, a German company. Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly.
Posted at 6:53 PM
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He's offering no information that they don't already know I'm sure.
Makes him look good though.
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yeah i'm not reading all that.
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I'm curious to see what the future of DRM and the big four will be. While I own an iPod, I refuse to buy my music from the iTunes store because of the DRM and its restrictions/limitations. Maybe that's not the moral thing of me to do, but I feel that if I'm spending money on something, I'd like to own it and manipulate it however I want, rather than just keeping it in the packaging. I guess that's why I prefer eMusic...
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I've posted a few times with the sole purpose of bashing Apple but I'm impressed by ol' Stevey here. Sounds dead on to me.
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Least Jobs still has his head on. Bill Gates went nuts with Vista and the Zune.
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He's quite right. DRM is nonsense, but then again, so is nearly everything that the majors do.
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I don't see that that is what he's trying to say. I mean, he is, but he doesn't want it to happen.
"The most serious problem is that licensing a DRM involves discolosing 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."
That's really what made me come to that conclusion. I think he realises that if the iTunes store didn't sell DRM music he'd lose sales in iPods, and they wouldn't be making much from iTunes (he's admitted that in the past). He's pushing the blame a bit it seems. France has been up in arms about the whole DRM thing and trying to force iTunes to remove the DRM, but they're not having it.
"That's right! No DRM system was ever developed for the CD, so all the music distributed on CDs can be easily uploaded to the internet"
I don't know about everyone else, but I sure as hell remember that problem with all those CDs containing the viruses. Last year I also picked up 'Le Fil' by Camille and that had DRM on it. Still haven't worked out how to get it onto my computer without DRM incrypted Windows Media files. So that's worked pretty well in my case.
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this is why apple is so great. when someone who looks out for your best interest is also the manufacturer of computers, mp3 players & an online music store, why wouldn't you buy one? i've been supporting apple for years and will continue to do so as long as they continue making creative innovative products with this mindset. sorry to get all gushy on y'all.
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whatta load of shit this guy is. DRM makes him richer. He loves it. Apple is all about proprietary. Comical.
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everyone complains about the DRM on iTunes. You can still buy something, make an audio CD and rip it back as MP3's, so it's not that protected....
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looking out for our best interest? GIMMEE A FUCKING BREAK!!!! ITunes sells millions of songs that only play on his own devices - and most non-technical folks dont even know that! How is that in your best interest? GET A FUCKING CLUE - THEY LOOK OUT FOR THEIR OWN INTEREST AND NO ONE ELSES LIKE EVERY GREEDY CORPORATION
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I thought I remember reading last week about how Apple does not allow the indie labels who are willing to sell DRM-free (and do via other online services) do so via iTunes.
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^ Or you could just download the QTFairuse software...
Or, even more imaginatively, you could buy a frickin' CD of the music! Save the CD, save the album.
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Indie labels don't force anyone to use DRM, but Apple encumbers that 30% of the music with their proprietary DRM anyway. Jobs claims they would embrace non-DRM music "in a heartbeat", but they use DRM even when they don't have to.
This is nothing more than sophistry to push the blame on someone else. Is anyone stupid enough to believe that its mere coincidence that iTunes DRM only works on Apple players?
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Sorry about the dupes. I guess a timeout means it took it...?
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you guys are for the most part quite ignorant and are only looking as far as you want to. just because some smaller labels are willing to sell there music drm free that doesn't mean that apple can sell the music of that particular record company free of any protection. there are tons of contracts and rules that they must abide by and by saying that they've had the chance and are just looking to make more money means you didn't get what his point was. he threw the facts out there. read it again if you have to.
"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. Its 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."
no ones locked into anything. people buy iPod's because there one of the best, not beacuse they don't want to lose the 20 songs they already bought on iTunes.
come on guys. at least come up with some valid arguments if you're gonna go ALL CAPS on me.
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Al - get a grip. Regardless of what % of tunes they got from Itunes etc, the bottom line is that Apple created Itunes. And Itunes is proprietary. And Apple makes tons of money on Itunes. If they were looking out for anyone but themselves, as you cluelessly stated, they wouold've done what Emusic does - sell open .mp3's. Every tune they sell n Itunes gives Jobs warm & evil fuzzies because he knows that song can only be played on his device. He, no doubt, leans back on his chair with a smile and sayd "Gotcha!!"
ITUNES MUSIC LOCKS YOU INTO USING AN APPLE PLAYER. THEY SELL BOTH. IT MAKES THEM MONEY AND FORCES YOU TO USE THEIR PLAYER FOR THAT MUSIC - REGARDLESS OF WHAT % OF THE TOTAL MUSIC IT IS.
GET A GRIP.
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steve: Apple does not make a ton of money from iTunes. Jobs said in an earlier interview that they barely break even. When asked why they do it, he said it was because they sell a ton of iPods. Its about doing ANYTHING to sell iPods.
Al: "just because some smaller labels are willing to sell there music drm free that doesn't mean that apple can sell the music of that particular record company free of any protection."
That makes absolutely no sense. If the label doesn't want it and Apple doesn't want it (so says Jobs), they can make whatever contract they want. Or Jobs could just come out and say why he's ignoring the 30% in this 'the labels made us do it' lecture. There's no reason to pretend that there's some secret binding agreement that no one is allowed to talk about.
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^^^^^^^
required is the important word here:
"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. 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."
apple made their deal with the devil before eMusic existed
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Steve,
AAC is not a proprietary format. Only the DRM is proprietary and it can be removed by burning purchased music as a CD, as well as other means. I can understand being opposed to their DRM, but I can't understand getting worked up about it. If you care so vehemently, it's a small step to gain both the use of the iTMS and unencumbered music files.
Does Jobs profit from the tie-in between iTMS and iPods? Surely, but to describe the arrangement as evil is to enter the realm of the comedicaly absurd.
The convenience of the iTMS may tip the balance for a small number of people who are choosing between iPod and something else. It's not in itself a largely profitable enterprise (at this point) and iPods are selling pretty well to lots of people who never shop at the Music Store. I completely believe Jobs' claim that he would drop DRM if he could and that he thinks DRM is unnecessary and ultimately harmful to the labels. The fact that he considers profit as a part of these decisions is no problem in my eyes. If I didn't feel I profited suitably from my employment, I wouldn't abide that arrangement either.
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"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."
very clever, steve. But you're drawing from a sample that quite obviously steals close to 97% of its music. In a world without illegal downloading, iPod owners are locked into using iTunes to stock their music.
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Okay...
1) this may or may not be a PR stunt, but if he's actually putting it out there, Steve Jobs wont be able to go back on his word if (or when) the majors OK DRM-free music
2) a lot of this is very much a "don't blame us, blame the majors" kind of lecture, as if to save Apple from the angry mobs in Europe that are currently gaining strength criticizing Apple's DRM
3) like others have said, Apple DOES NOT profit greatly from iTunes store downloads. you know what they do make money from? IPODS! iTunes isnt about trying to rip off iPod users, its about adding another feature to the iPod ecosystem to get more customers - as in IPOD customers. the store is there to say - "hey, you may or may not want to buy music online, but if you do, we have a easy way to do so with the iTunes store"
I agree with Steve Jobs that licensing is not viable. DRM free music, because Apple just wants people to buy their iPods... iTunes and the store will still be around for people that want to use it, otherwise they can buy from others
By the way, iTunes doesn't, and won't, have a whole lot of serious competition, price-wise, and even a little feature/interface wise. Does anybody sell songs for less than $0.99? No. Apple wins (or tries to win) on the basis of good design and convenience. Losing the DRM wont change the fundamental principles of the whole iTunes (and Store) - iPod deal.
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You guys are hilarious. Steve jobs could care less about the money he makes off of iTunes... It's all about selling the iPod. I own an iPod, I love it, and I have never purchased a single song off of Itunes. But you can bet that when I upgrade to a better player it will be another iPod. Why? Because it's by far and away the best music player. Apple consistently comes out with products that are far better than any from the competition. And Steve Jobs has consistently made decisions based on what is best for the consumer, not what is best for his company. As time goes on, the under informed, mis informed, and just plain ignorant consumers will begin to realize how much more thought out Apples products are, and will make the switch. I did three years ago, and I will never go back. Wise up people and stop getting Steve Jobs confused with Bill Gates.
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d:
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very clever, steve. But you're drawing from a sample that quite obviously steals close to 97% of its music. In a world without illegal downloading, iPod owners are locked into using iTunes to stock their music.
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No, D, the 97% isn't "stolen" - there's numerous legal ways to get music onto an ipod without going to iTMS: for example, you might rip your own CDs. You might download free sample tracks. Perhaps you purchase from one of the DRM-free stores.
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I've got a Creative Zen, and I would like to legally download music from the Itunes store, considering (from what I've seen) that it's the only one that seems to work well, but the DRM thing is the only thing stopping me. I agree with what he's saying, but I bet the big 4 will never go for it, and that only hurts us. The consumer. For shame Big 4.
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Wow. You guys are babies.
Apple makes iPods. Apple makes iTunes.
You want their products & services, you accept their terms. If you don't, go somewhere else.
Most of us download off blogs, fileservers and torrents anyway.
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Apple definitely doesn't make that much money off iTMS. I set myself up through CDBaby on iTunes, and I make something like 93 cents per song. That means that, at most, Apple makes 6 cents per song. SIX. .06*22 songs = $1.32 for each iPod EVER. compare that with >$100 prices per iPod, and you see where Apple's money actually comes from.
So, down with DRM, etc. I, for one, would buy a hell of a lot more songs if they weren't protected.
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Traslation: "I don't want DRM either, but those damn Europeans make me do it. Go bitch to them and leave me alone."
God, I love Steve.
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Steve Jobs isn't looking out for the consumer, he's looking out for his company. He's just smart enough to make you feel like he's looking out for you so that you adore him, etc.
Getting rid of DRM means getting rid of a whole division of Apple that deals with the research and development of that software. As he pointed out, everytime someone cracks the DRM software, they need to come out with a new version of iTunes that fixes the leak. And that kind of thing can cost a company a lot of money.
Also, getting rid of DRM means people with other types of mp3 players can buy music from iTunes. And since iTunes is by far the most well-known online music store, he stands to possibly makes a lot more money from those types of people. And if iTunes is just barely breaking even now, you can bet he wants to do something to change that.
Steve Jobs is a smart businessman. The fact that he makes so many people like him for things he's really doing for his own benefit just proves the point.
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To the "GET A GRIP" dude above.
Ever see the selection on eMusic? I like Indie music and I stuggled to find 50 tracks that I wanted from the initial trial. Plus eMusic makes you pay a monthly fee whether you want to download 50 songs that month or not. Sure they sell non-DRMed music but the selection sucks. I'd rather buy a CD and rip it into Itunes.
Apple is a company, they are in the business of making money. If jobs created an online music store that catered to only 1% of the population he's not doing his job in maximizing value for his shareholders.
Apple had to agree to the DRM in order to get the major labels on board. If they didn't have DRM then they could open up the business to other non-Ipod players. Wouldn't that be better than only being able to sell to the ipod users?
No one is buying an ipod solely so they can use the itunes music store. They are purchasing them because they are designed well. The itunes thing is just an accessory. And based on the numbers its not where a majority of ipod users get their music anyway.
But you hate apple so these logical arguments hold no weight for you.
Also there is no need to shout.
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DRM is why I only buy CDs. I don't want music I've payed for to not let me transfer my mp3's to a new computer or burn a CD more than 3 times. It hurts people who want to pay for music more than the people who pirate it.
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To Iceburgh - I'd hate to see your taste in music. I've been w/Etunes for well over a year and I could download 100 songs a month and still want more. Yet there' barely a damn thing I'd be interested from a major label out there. You must love the big-label stuff - if so, why are you on this blog?
And to further defend the get a grip guy you said "No one is buying an ipod solely so they can use the itunes music store." He never said that. He also never said Apple makes $ from Itunes. Read his post. But the bottom line is, Itunes makes Apple SICK money on Ipods, which have less functionality, battery life, and sound quality than my Creative Zen Touch. And oh yeah, cost $100 more. Steve Jobs is doing 2 thinigs - He's looking out for his profits (not you), and he's playing you for suckers.
Some of us are too smart to fall for it.
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I'd hate to see Iceburgh's music collection if he can't find good stuff on Etunes.....
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To Jeremy: You must have a very stylish wardrobe that doesn't have a lot of functions. I bet your shoes are the hippest and trendiest around (like everyone elses), but are uncomfortable and don't last long. Yes, I hit it on the head. You are like other Ipod owners - it does indeed look great. Me, I'll take better functionality, battery life, options, more playable formats, and oh yeah, I paid much much less. How great does THAT look!!
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Jeremy "Apple consistently comes out with products that are far better than any from the competition."
Ha. Ha Ha. Lol. Apple consistently comes out with products that are far MORE STYLISH AND TRENDY than any from the competition.
I LISTEN to music on my device, which has tones more options than your crap-Pod and far better sound quality. I don't spend time LOOKING at my device and admiring it (or wondering if others will think I'm cool - like everyone else)
I know I'm cool because I got much more, for way less. That's the ultimate cool.
MUSIC - Ears on, eyes off.
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Interesting responses. Bottom line, a major player has proposed scrapping DRM songs, and who can disagree with what he is saying, no matter what his motives are. Further, to all the critics--even if you ever did bought a song off of ITunes, which I doubt, I'm sure you know how to get rid of the DRM--and as far as the IPod goes, if you don't like it's technology, than buy something else instead of blaming a guy for wanting to protect his investment.
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My music collection is diverse I don't "just love the big label stuff " any more than I just love stuff on smaller indy labels. I choose the music based on the actual music not how its marketed or whether its a snob approved obscurity from an artist that only 5 people know about. My point was that I would use emusic over Itunes if they had a better selection and didn't have a monthly fee because I would prefer to not have DRM. But the only way itunes is able to get the selection is with the DRM.
Just because you like your Creative Zen doesn't mean you have to pi$$ on people that like their Ipod.
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The thing is that I'm guessing there's a lot of simmering resentment on the part of non-iPod DAP owners, because honestly, in North America here it's kindof awkward to own something by a company like Samsung or Creative when everyone assumes that "iPod" and "digital audio player" are synonymous. I mean, stupid things like that whole airline iPod dock deal, like it was too much work to have maybe a USB port there too?
There's a reason why in, say, South Korea Apple is somewhere around 10th most popular brand instead of first. iPods aren't so popular here because they're incontrovertibly the best, it's issues like marketing and vertical monopolies. I'm not saying "omfg iPods are teh ghey" or something (they're decent but they're not for me), but I think it's inarguable that their market share is NOT a direct result of comparative merit as a device.
I have to echo Nat about Steve Jobs being a good businessman, and how the "fact that he makes so many people like him for things he's really doing for his own benefit just proves the point."
I find it odd with all this mudslinging back and forth that no one has mentioned (or maybe they have and I'm blind?) the *terrible* quality of the iTMS downloads? I mean, honestly, for the most compressed of pop tunes I suppose it's alright, but I got my friend to purchase an album on my behalf that I couldn't managed to find elsewhere (the second solo-project album of Ken Andrews', to be exact) and I was stunned by how shitty it sounded. 128kbps AAC just isn't good enough! Then again, I rip my CDs to FLAC. Luckily I've got one of those non-iPods that everyone is always so confused to see (a Cowon iAudio X5, to be precise) so I can take music with me for my snobby ears ;)
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