Apple's Steve Jobs: Not The Commander in Chaff (At Least This Time)

Continued from 'EMI Drops DRM (For A Price): Dipert Drops Jaw (And Happily Eats Crow)'….

And now, without further ado, enjoy the editorial that until this morning was going to run in EDN's April 26 print edition. As you chuckle while reading it, realize that I'm chuckling, too. Sometimes it's good to be wrong.

Apple's Steve Jobs: The Commander in Chaff

Is Apple CEO Steve Jobs interested in running for US President? Regardless of whether his aspirations match those of his fans, Apple's current legal troubles concerning backdating of stock options and other financial irregularities would probably put the kibosh on them. But he showed in early February that he certainly has the moxie necessary to succeed in the political arena. And, no, that's not a compliment.

If you haven't yet read Jobs' missive, Thoughts on Music, take five or so minutes out of your busy day and give it a scan-through. If nothing else, it may give you a few good chuckles coupled with admiration for the skill with which Jobs wields his “Reality Distortion Field.” Apple published his essay in the midst of escalating calls, by a number of European regulatory agencies, to license the FairPlay DRM (digital-rights-management) scheme to ensure broader interoperability of the iTunes ecosystem, or else face possible legal action. Jobs begins his public response with a historical background on how Apple's DRM scheme came into existence in the first place, pointing the blame finger at the record labels; he follows that sleight of hand with an elementary explanation of DRM and the necessary recovery steps in response to a circumvention of that DRM.

Jobs then suggests three alternatives for the future of Internet-based digital-music distribution, a tripart prognostication that more broadly applies to other multimedia content, such as TV shows and movies. Option one is for things to remain as they are today, with a diversity of DRM-inclusive tracks, some that multiple services redundantly offer and others that one service uniquely offers, tightly coupled to DRM-supportive playback devices. Option two, which follows what European groups are advocating, involves a broader license of Apple's DRM scheme; Jobs predictably rejects this alternative, because he claims it would adversely complicate the FairPlay infrastructure's recovery from a successful DRM breach. And, once again redirecting attention from Apple and toward "the ‘big four’ music companies: Universal, Sony BMG, Warner and EMI" that "control the distribution of over 70% of the world’s music," Jobs' third and (claimed) most-preferred option is for the record labels to completely drop their DRM requirement.

"Imagine a world where every online store sells DRM-free music encoded in open licensable formats," Jobs writes. "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."

I'm highly skeptical that Jobs was serious when he wrote those words. There's abundant evidence, in fact, that Jobs and his lieutenants have blatantly and repeatedly refused independent musicians' and smaller labels' requests over the years to sell DRM-unencumbered music. Further, evidence also contradicts his contention that more diverse DRM schemes are more easily and more frequently hacked, and that those hacks are more difficult to recover from, if you compare FairPlay to, say, Microsoft's PlaysForSure. The bottom line, as I pointed out in a July 2005 EDN cover story, is that getting customers hooked on DRM-inclusive iTunes Store tracks that they can't turn around and use on non-Apple portable players and PC software without first burning them to CD and re-ripping them (a series of steps that's time-consuming, quality-degrading, and too complicated for most computer users to tackle), is key to Apple's continued hardware success.

Jobs did blink under European regulatory pressure in Thoughts on Music, however, if only a bit and for a moment. In attempting to minimize the perceived influence of Apple on the music industry, he writes, "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." This quote marks the first time I'm aware of that Steve Jobs, or for that matter any Apple official, has ever publicly equated the number of iPods sold to the number of iTunes-sourced tracks sold.

As my January 2007 Consumer Electronics Show coverage pointed out, Apple's historical stance (tailored to push stockholders' hot buttons) has been to focus on only the absolute to-date number of tracks sold, along with the rate of increase of those sales, but not to align these trends with iPod sales trends. Jobs (conveniently, I suspect) ignores the “iPod-replacement” factor—that is, the fact that many iPod owners are on their second or third Apple unit, thereby inflating the per-customer number of FairPlay-inclusive tracks owned beyond Jobs' estimate and more in line with outside analysts' approximations. But still, that he made a public estimate at all indicates his concern for the regulatory pressure Apple's feeling right now.

Continue reading with 'DRM Discarded: EMI Dashes My Editorial Aspirations'….