Thoughts on Music

Steve Jobs
February 6, 2007

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.

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.

.

I USED to be a consumer of RIAA affiliated music. The first musical product I bought was an album, way back when. Then, 45s and you had a plastic insert to play them with. Then, 8-Track tapes. Then, microcasettes. Then, music CDs.

I don't own an iPOD, will NEVER own an iPOD, and I don't download music produced by RIAA affiliated groups.

Whether Steve Jobs "stole" the idea of the mouse from Xerox PARC or not, I don't know.

I do know that music downloading by the masses really became big through Peer to Peer software like Napster, Morpheus and KaZaa, and now, the big Music Cartel and the big Software guys want to control it.

No thank you Apple. No thank you Microsoft, and definitely, no thank you to any RIAA affiliated venture.

I just bought a new (new to me) guitar and AMP, so I think I will create my own music ...and certainly, no DRM in it.

Just my thoughts...Have a great evening all.
~Code

"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."

Sorry Steveo, that's wrong!

Now, if you had said no "successful" DRM system was ever developed....

"No thank you Apple" for what? Suggesting that DRM be abolished?

Steve Jobs is merely making the same common sense arguments that we've been saying here for years. DRM is a waste of time and effort for everyone involved because it just won't work. He told them the same thing when they first dreamed it up in the 90s.

Jobs is -- or at least has the potential to be -- more of a threat to the RIAA, and the way they do business, than any other player in the game.

"...we have accurate data for them."

You'll never hear Warner Music say that. At least not anytime soon. "Accurate data" is still an oxymoron in the record labels' accounting offices.

He tried it their way. Their way sucks. The labels can't seem to grasp the whole "think different" thing, which pretty much sums up the overall problem with the entire music business these days.

After yesterday's new agreement with the Beatles, Apple could actually enter the music business in some manner if Jobs feels like it. He just got this new option yesterday and today we get an anti-DRM manifesto, just before Apple is due to renegotiate licensing with the majors.

This is not a coincidence.

that's funny, i just heard today that it's common knowledge at Apple that if you run into Steve Jobs in the elevator, he asks you to tell him why your job is important. If he doesn't like your answer, you get fired on the spot. The source of this info says he takes the stairs...

Jobs' critique of DRM is appreciated, but his letter gets several things wrong. For example, the idea that record labels haven't tried to protect CDS. Not true - they have. Sony rootkits, anyone?

But more importantly. this appears to signal the burden is on consumers to organize and fight the RIAA (which yes, is what many of us are doing, but really, not enough of us yet). If Jobs really wants DRM gone he and Apple should join the movement already underway to stop it -- instead of essentially saying that battle needs to be fought and won by consumers.

Is is this a positive development? You betcha - and Jobs should be commended for coming out so publicly against DRM. But it certainly doesn't make him a saint.

In the corporate world, there ain't no saints.

I'm sure Jobs' comments are self-serving since it looks like some european countries are going to hand Apple their asses on iTunes' FairPlay DRM.

that said, iTunes sells more product than any other online stores combined. that's a pretty big stick to swing. with CD sales declining (gee, with the astonishing lack of quality acts, I can't imagine why...), I'm sure the record labels will at least listen to what he has to say, before they cut their own throats & say "no."

just my two pennies worth.

Jobs is ASSuming that ALL downloaded iTunes music is ONLY stored and played on iPods, leaving ALL PCs/Macs out of the equation.

"it looks like some european countries are going to hand Apple their asses on iTunes' FairPlay DRM."

And tell them to do what? Jobs laid out the three scenarios.

Gather together Steve Jobs, the CEOs of Warner, Sony, EMI and Universal and every other board member of the RIAA, ASCAP, BMI, NARAS, the music publishers' lobbying group, ClearChannel, and the Senate Commerce Committee. Invite Jack Valenti and Hilary Rosen to the party, for old times' sake.

Steve Jobs is not a saint. But Jobs would be the only one in the room that has ever required a reminder.

"...if you run into Steve Jobs in the elevator, he asks you to tell him why your job is important. If he doesn't like your answer, you get fired on the spot."

If you work for a record label, they don't bother asking.

--------
Skepticism is good. I stopped trusting Apple at OSX and I won't buy another one of their machines until DRM disappears completely. Or anyone else's. The 10-year-old machine I've got still works fine.

I just think you're making a mistake to dismiss this out of hand just because you don't like Steve Jobs. Bill Gates said the same thing recently. Jobs just explained it better. DRM is a dead-end.

There is a self-serving part coming. THIS WASN'T IT!

"Jobs is ASSuming that ALL downloaded iTunes music is ONLY stored and played on iPods, leaving ALL PCs/Macs out of the equation."

Not true. He simply illustrated that more than 97 percent of the music filling up the iPods he already sold could not possibly have been purchased from iTMS. The fact that not all songs purchased from the iTunes store may end up living on an iPod merely validates 97 percent as a minimum.

"But more importantly. this appears to signal the burden is on consumers to organize and fight the RIAA..."

I didn't get this impression at all from his comments. Not that there's anything WRONG with that!!

The impression I got was that the burden is on the RIAA RECORD labels to make a decision about what to do with DRM. His suggestion; abolish it for music. Isn't that a novel idea?

No, Jobs isn't a saint. He likely has some cash motivation for this suggestion. But, let's face it. He's right. DRM has got to go.

his motivation: more sales from itunes

more people will buy becuase they can use it in any player after a quick conversion with the itunes software

George, My "No thank you Apple" was I have no use for an iPOD and will not buy one, even if movies keep trying to stress that iPODs have a hard drive and in a pinch one (in the movie) could download data to it.
See movies like TRANSPORTER 2
and that idiotic mess with Harrison Ford
called "FIREWALL".

http://wcbstv.com/topstories/local_story_037234835.html
Bill Banning iPods In Crosswalks Slated For Albany
State Sen. Kruger: Electronic Devices Put Many In Danger
Lou Young
Reporting

(CBS) NEW YORK First it was cell phones in cars, then trans fats. Now, a new plan is on the table to ban gadget use while crossing city streets.

We all seem to have one -- an iPod, a BlackBerry, a cell phone -- taking up more and more of our time, but can they make us too distracted to walk safely? Some people think so.

If you use them in the crosswalk, your favorite electronic devices could be in the crosshairs.

Legislation will be introduced in Albany on Wednesday to lay a $100 fine on pedestrians succumbing to what State Sen. Carl Kruger calls iPod oblivion.

"We're talking about people walking sort of tuned in and in the process of being tuned in, tuned out," Kruger said. "Tuned out to the world around them. They're walking into speeding cars. They're walking into buses. They're walking into one another and it's creating a number of fatalities that have been documented right here in the city."

Pedestrians have been hurt and killed in the manner Kruger describes. Not surprisingly, though, iPod users are less than thrilled with the senator's proposal.

"That's not a distraction," said one woman, iPod securely implanted in her ears. "You have your iPod in your ears and you're crossing the street, you are looking with your eyes. You don't have to hear anything, really ... I guess."

Added another New Yorker: "It's a terrible idea. It's outrageous."

Kruger said not so fast.

"If you want to listen to your iPod, sit down and listen to it," Kruger declared. "You want to walk in the park, enjoy it. You want to jog around a jogging path, all the more power to you, but you should not be crossing streets and endangering yourself and the lives of others."

Kruger's bill would only apply to big cities across New York state. We don't know what kind of support it has in Albany, but he hopes that the New York City Council, which has already banned indoor smoking and trans fats in restaurants, will pick up the cue.

"Skepticism is good. I stopped trusting Apple at OSX and I won't buy another one of their machines until DRM disappears completely. Or anyone else's. The 10-year-old machine I've got still works fine." - NewsteamgdZiemann

Correct me if I'm wrong, but DRM is only applicable to the itunes store and the player. Why groan about that? No one is forced to to use either of these. They aren't locking you out from using another online store, or using another player, or even another portable music player.

But like you said, why upgrade, if your 10 machine works fine..

"If Jobs really wants DRM gone he and Apple should join the movement already underway to stop it -- instead of essentially saying that battle needs to be fought and won by consumers." - PhantomGhost

How exactly would Apple do this? Apple says "No DRM" and suddenly they don't have the popular music to sell (since they won't get permission to sell the music). Without the popular music to sell, people will turn away from the itunes store. Yes, it would be great to rid these stores of DRM, but let's be realistic. This would sink the online store into a hole. People in general want to be able to find the music they want and download it. If its not there, they will get turned off by the store. People in general do not care if what they want is a RIAA product or not. If they like the music, they want it. A consumer movement is the only way I see.

Its ironic as the entire Apple empire is built on proprietary exclusion. Having said that...."the enemy of my enemy is my friend"

I think Jobs wants to be on the right side of history and is positioning himself and Apple to be prepared when the whole house of cards comes down.

Its ironic as the entire Apple empire is built on proprietary exclusion. Having said that...."the enemy of my enemy is my friend"

I think Jobs wants to be on the right side of history and is positioning himself and Apple to be prepared when the whole house of cards comes down.

Here was the RIAA's reaction:

"Apple's offer to license Fairplay to other technology companies is 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."

Apple sparks battle over copyright

Apple’s demand that record companies do away with copyright protection for songs they sell online has set up a bitter battle between the two camps as they prepare for broad-ranging contract negotiations.

http://www.ft.com/cms/s/90c03168-b6ea-11db-8bc2-0000779e2340.html

"I stopped trusting Apple at OSX, and I won't buy another one of their machines until DRM disappears completely."

I'm with George. I have Mac OS 9.2.2, which is the last version without any capitulation to DRM. . . meaning I don't need anything beyond a G4 computer.

[whistling contented tune]

"Correct me if I'm wrong, but DRM is only applicable to the itunes store and the player. Why groan about that?"

My concern is from the perspective of creating content, not using it.

The RIAA wants one DRM to rule them all. A standard. They didn't even hear the "it won't work" part. They don't care if it works.

They need a method to mark their property in a way that the average musician in the street can't access. That is all they see. They've been obsessed with it for almost a decade. They need a new standard in order to exclude the rest of us.

"I think Jobs wants to be on the right side of history and is positioning himself and Apple to be prepared when the whole house of cards comes down."

Close.

What's happening is that Jobs sees the writing on the wall. DRM is suicide.

(All hail the RIAA's continued insistance on using DRM!)

Hey George. That's a great article you have about all this over at AzOz.com

JOHN DVORAK'S SECOND OPINION
Steve Jobs and the digital rights bugaboo
Commentary: He's right, the music industry is strangling itself

BERKELEY, Calif. (MarketWatch) -- Digital rights management (DRM) is an out-and-out disaster both as a concept and as an always changing technology.
Most technologists have always believed this and apparently now Steve Jobs is saying it publicly. See related story.
He is begging the music industry to give up on all the DRM initiatives while subtly predicting they may spell its doom. He is dead right.

http://www.marketwatch.com/news/story/story.aspx?guid=%7B775E7E37%2D8A51%2D438B%2DAAD8%2DD1B0B7FCADC5%7D&dist=rss

What's worse than biting into an Apple and finding a worm?
Biting into an Apple and finding half a worm.

What's worse than biting into an Apple and finding half a worm?
Biting into an Apple and finding Steve Jobs whining on about a Brave New World.

Until recently, the major media has rarely reported on the public's displeasure and growing opposition to DRM. Too bad it takes a johnny-come-lately big-wig like Steve Jobs to get the issue in the headlines.

Oh well, we'll take what we can get I suppose.

" They need a method to mark their property in a way that the average musician in the street can't access. That is all they see. They've been obsessed with it for almost a decade. They need a new standard in order to exclude the rest of us. "

... insuring that only their own have "stars upon thars"

"They need a new standard in order to exclude the rest of us."
... and I'm reasonably confident they'll manage to contrive one.
(pessimism prevails; down with false hope and starry-eyed optimism; up with stark reality)

90 million iPods were sold at prices between $100 and $300. If the average price is $150, that's $13.5 billion in sales. If it's closer to $250, then you're looking at $22.5 billion.

Apple has sold 2 billion songs at a buck each. Apple's cut from the music sales has been somewhere between $600-800 million.

Steve Jobs does not need to kiss the music industry's ass. He doesn't need to sell music at all.

Though in todays fast paced world this may seem as "time wasted" where as not 10 years ago it was the "normal way of doing things" -- DRM has an unbeatable enemy and its name is Analog. It is not very hard to do the following:

Step 1) Music listener, whether legally or illegally, wishing to "copy" a song protected in DRM, first takes the iPod (or other authorized means of playback) and connects it to the mic in or line in of their computer.

Step 2) Real-Time playback of the song begins as some program or another (Adobe Audition, Cool Edit Pro or some other means of recording on whatever operating system the person is using) records the analog wave information being output from the sound hardware of the device that speakers or headphones regularly plug into.

Step 3) Recorded song is saved as songname.mp3 or songname.ogg

In the event that digital hardware would prohibit this (such as with alot of DVDs, your not going to be able to record from the DVD Player to your VHS Recorder, just as similar measures are / were taken for VHS Rental Tapes) I'm sure that Analog Cassette Tape Recorders are going to stop selling anytime soon and one can go from tape to pc very easily.

I am not suggesting piracy but if a person has PAID for their music then it is reasonable to think they can keep backup copies in the event that the initial copy is damaged and / or destroyed somehow. I doubt anyone can call the RIAA and say "yeah i paid for this and my original copy got destroyed, can you send me a new one for free?" seeing as the RIAA would either laugh in your face and hang up on you. Either that or utilize some polite means of telling you to goto hell.

Since you bought your ipod... you wanna copy songs onto it that are already on your computer? Well, here you go: Now your ipod can play anything you want...

http://www.sturm.net.nz/website.php?Section=iPod+Programs&Page=SharePod

Problem solved, interoperability achieved via software.
Knowledge is power.

[the above information courtesy of RaidHHI; what follows below is courtesy of yours truly]

That website furnished above, along with the one for jhymn (below) will take care of things quite nicely.
JHymn frees your iTunes music from the limitations of DRM, without loss of sound quality, allowing you to use the music you paid for with non-Apple hardware.
http://hymn-project.org/jhymndoc/

Disclaimer:
None of the good information provided by Twarrior, Grumpy, or other Boycott members should be construed as tantamount to recommending the purchase and/or use of RIAA musical content.
Please enjoy and promote genuine independent music!
Thank you.
—management