Steve Jobs Changes His TuneApple CEO wants to abolish Digital Rights Management. Why?February 19, 2007
Steve Jobs has talked the talk and now a growing chorus of critics is urging him to walk the walk.

The Apple CEO who almost single-handedly pioneered the digital music market raised eyebrows last week when he issued a memo calling on the record industry to start selling digital music tracks without copy protection software.

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He blasted industry heavyweights including Universal, Sony BMG, Warner, and EMI for forcing companies like his to manage cumbersome digital rights management software, which the labels contend is necessary to prevent rampant online music piracy. “DRMs haven’t worked, and may never work, to halt music piracy,” he wrote.

But critics were quick to assail Mr. Jobs, whose iPod music player and iTunes online music store dominate the digital music market. Both are built around proprietary technology, so the songs it sells can only be played on an iPod—a state of affairs that has upset consumers and European regulators.

Skeptics say Mr. Jobs has profited handsomely from his closed system—he has sold more than 90 million iPods and 2 billion songs—and has shown no inclination for working with others. Derek Slater, activist at the privacy rights group Electronic Frontier Foundation, says Mr. Jobs could demonstrate that he is serious about abolishing copyright protection schemes by selling DRM-free music from independent artists on iTunes. “He should put his music store where his mouth is,” says Mr. Slater. “That would be an important step.”

Ted Cohen, a consultant at TAG Strategic and a former EMI executive, says he would be far more impressed if Mr. Jobs, who is also a board member and the largest shareholder at Walt Disney, announced that the movie studio would start selling its digital content without copyright protection. “He’s calling for other people to give up protection of their content” without doing so himself, says Mr. Cohen.

Pressure from All Sides
So why would the man who has benefited the most from the status quo advocate such a wholesale change? Mainly because Apple is under growing pressure from music fans, record labels, and European regulators to make its technology interoperable with other companies’ music players and online stores.

But it is telling that Mr. Jobs quickly dispatched any suggestions that Apple license its DRM technology so that it would work with other companies’ products. It’s a position the record industry has long advocated, but Mr. Jobs argues that making the technology work seamlessly across multiple platforms is nearly impossible.

Mr. Jobs is instead calling for the abolition of DRM, a position the record industry has long rejected. By doing so, Mr. Jobs can blame the labels for the current digital music mess. “It’s the best deflection move I’ve ever seen,” says Mr. Cohen. “He’s pointing the finger at everyone but himself.”

Other industry analysts were more prepared to take him at face value. After all, they point out, consumers bought 2 billion copy-protected music tracks on the Internet last year, while pirates downloaded more than 15 billion tracks from unauthorized file-sharing services. Meanwhile, eMusic.com has emerged as the world’s second-largest online music store by selling DRM-free tracks from independent artists.

Mark Mulligan, research director at JupiterResearch, notes that only 28 percent of European music executives polled think DRM does a good job of preventing piracy. “There is growing support for the idea that dropping DRM will drive adoption,” Mr. Mulligan says.

That idea was heresy not long ago, but rumors abound that at least one major music label will within the next few weeks ease copy restrictions on some of its digital catalogue. If so, Mr. Jobs will once again come across as a forward-looking visionary. But critics point out that if Mr. Jobs is really serious about abolishing copy-protection software, he ought to prove it by putting his music store and his movie studio where his mouth is.