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Sunday, February 11, 2007

Steve Jobs & DRM For Online Music

Paul Kedrosky argues that he is not impressed with Mr. Jobs latest views on removing DRM restrictions for online music

As he sees it Mr. Jobs has options - Instead of carrying out Mr.Jobs suggestions, he could license his FairPlay DRM to other music-player companies. That way they could play Apple music on their players, thus breaking down the iTunes wall. He argues, however, that if he did there is a chance that some of the tricky bits that make FairPlay work would become public, thus opening it up to piracy and forcing music companies to pull their entire collections from his iTunes, and everywhere else for that matter. So, no music for you!.... Mr. Jobs knows that there is pretty much zero chance the music industry will eliminate DRM. That move would sound a death ringtone for their struggling business, making online piracy dead simple and destroy the livelihood of an entire generation of artists

I tend to disagree with Paul on this. Lets look at the basics - Steve Jobs wants the major music licensing companies to examine the relevance of DRM technology. He comes from the perspective that online music shouldn’t be unnecessarily protected when music CD’s do not have any DRM restriction. After all Apple makes far more money from iPods than from music sales, so one will have to assume that Jobs shows sincerity in this idea. Ofcourse there are litigations in some European nations on the closed standards of iTunes that need to be resolved very quickly. Jobs would like to see that this has to be seen in the context of the DRM restrictions imposed by the music industry players.

Apple today commands a dominant share of the online music market and with DRM restrictions removed, one can see more action in the areas of tagging, search, personalization etc and this also opens up opportunities for pursuing new business models as well – thus benefiting the consumer and if in the process he can take potshots at Microsoft’s Zune with it splanned proprietary standards – so much better for him and the world at large. It is ironical that wih iPod, Microsoft got the short shrift owing to DRM restrictions and removing DRM restrictions this time around would neutralize Microsoft’s plan for imposing its own standards on online music!! Look carefully – who wins here – Obviously the consumer and the entertainment and more particularly the online music world-at-large.

I agree with Jobs that the best option 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. The cost of DRM enforcement and the distribution chain of online music industry adds to its cost strcuture- it's better that the root cause Viz. DRM is entirely abolished for online sales.

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