Jobs Calls for Open Music Sales

By Mike Musgrove
Washington Post Staff Writer
Wednesday, February 7, 2007

Apple chief executive Steve Jobs yesterday called on record companies to let online music stores sell digital music files without anti-piracy controls, an idea that some analysts say has merit.

"This is clearly the best alternative for customers and Apple would embrace it in a heartbeat," Jobs wrote in a column titled "Thoughts on Music," which was posted on Apple's Web site yesterday.

Critics have complained that digital rights management, or DRM, software built into tracks sold on the company's iTunes music store locks users into Apple's iPod. Such competitors as Real Networks, as well as some European countries, have called on Apple to share its software code or otherwise open its protected music file format. Doing so would allow devices other than iPods to play music downloaded from iTunes and would allow music purchased elsewhere on the Internet to be played on iPods.

But Jobs wrote that Apple sells music solely for the iPod because that's what the music industry insisted on when he was negotiating deals years ago -- even though "DRMs haven't worked, and may never work, to halt music piracy."

"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," Jobs wrote.

The problem, he said, is "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."

Phil Leigh, senior analyst and president of Inside Digital Media, said Jobs's comments were legitimate, albeit a bit self-serving.

"Jobs is trying to show that Apple is not the bad guy when it comes to proprietary formats," Leigh said, noting that the open letter was an aggressive public-relations tactic by a company that eventually will have to renegotiate with the record companies. "I think he's taking the offensive here."

Chris Castle, a music-industry lawyer who represented the original Napster, said the shift from CDs to digital music has hurt the music industry enough that it might be willing to consider Jobs's points.

"I think the labels are finally starting to come around to this," he said. "There's more willingness to entertain this sort of thing than there ever has been."

Jobs noted that eliminating DRM software is only one alternative. Another, he said, would be for Apple to license its FairPlay DRM technology to competitors -- for a fee. But, he said, releasing the secrets of the technology could lead to leaks, which can spread around the world in an instant over the Internet.

The Recording Industry Association of America, which has battled music piracy for years, called Apple's offer to license FairPlay "a welcome breakthrough and would be a real victory for fans, artists and labels. There have been many services seeking a license to the Apple DRM. This would enable the interoperability that we have been urging for a very long time."

In its statement, the RIAA did not address Jobs's idea of eliminating DRM software.

In his letter, Jobs noted that EMI and Universal, two of the big four CD labels, are both owned by European companies while 50 percent of a third, Sony BMG, is owned by Bertelsmann, a German company. The fourth, Warner, is based in the United States.

"Much of the concern over DRM systems has arisen in European countries," Jobs wrote. "Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free. . . . Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace."

© 2007 The Washington Post Company