This is from the February 7, 2007 program of CNBC's Morning Call.
CNBC On Why DRM Should Go Away (Quicktime - 16 MB)
CNBC On Why DRM Should Go Away (MP3 - 8 MB)
This story was inspired by Steve Jobs' recent
campaign to kill Digital Rights Management (DRM) in iTunes.
The argument supporting this position was best described when the commentator started off saying:
"Mr. Sherman, your anti-piracy software doesn't work anyway. What's the point?"
Long story short:
-DRM is only a hassle for consumers. Real "pirates" hack it anyway.
-DRM doesn't need to exist for new business models - there are numerous subscription services already without DRM.
-For this reason, a subscription service that doesn't let you move your music around between your different devices is already "broken" (while also depriving you of your fair use and first sale rights to make legal copies of media you've purchased legally).
Here is the full text of the entire article linked to above about Steve Jobs (in case the link goes bad):
Apple's Steve Jobs Ready To Scrap iTunes Copy Protection
With label cooperation, Apple would sell DRM-free music 'in a heartbeat,' CEO says.
By Gil Kaufman
Steve Jobs is great at making lusted-after shiny tech objects, but the Apple Inc. CEO could use a lesson or two in the fine art of blogging. Regardless of his failure to keep it brief and breezy, though, the man who brought you the iPod and iTunes posted a lengthy, fascinating open letter on the Apple site on Tuesday in which he surprisingly stated that he'd be OK with scrapping the Digital Rights Management software that prevents songs downloaded from iTunes from being played on competing MP3 players.
Jobs, who has defended DRM in the past, said he's asked the four major labels (Universal Music Group, Sony BMG Music Entertainment, Warner Music Group and EMI Group) to remove the software that prevents the copying of music files. As of now, songs bought on iTunes will only play on Apple's own iPods, and music bought from other download sites have their own DRM systems that work for competing music players.
"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," Jobs explained in the letter about the big four, which control rights to more than 70 percent of the world's music. "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."
Part of the deal, he added, is that if Apple's DRM was compromised at any time and the music downloaded from iTunes could suddenly be played on unauthorized devices — hackers have worked hard at finding some work-arounds for the iTunes DRM — the company had only a "small number of weeks" to fix the situation or face the withdrawal of the record company's entire catalog from the iTunes store. Jobs decried the need to employ secret codes in Apple's FairPlay DRM in order to stay a step ahead of hackers in the "cat-and-mouse game" to repair challenges to FairPlay's security.
"Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly," Jobs predicted. He proposed three solutions to the problem:
» "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.
» "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."
» "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 agree to let Apple and others distribute their music without using DRM systems to protect them, Jobs asks? The simple answer, he wrote, 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."
Jobs argued that if the music companies are selling over 90 percent of their music DRM-free, why would they bother saddling the small remaining percentage of their sales with a DRM system that doesn't work?
"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," he wrote. "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."Posted by Lisa at February 07, 2007 09:13 AM