REVOLUTION! STEVE JOBS CALLED ON RECORD LABELS TO CANCEL DRM (digital rights management)
Steve Jobs
February 6, 2007
Along with the overwhelming global success of the Apple iPod music player and iTunes online music store, some people began to urge Apple to “open up” the digital rights management (DRM) system that Apple uses to protect music from theft so that music purchased from iTunes can be played on other digital devices of other companies, and also that protected music purchased at other online music stores can be played on iPod. Let's examine the current situation and how we got to it, and then take a look at three possible alternatives in the future.
To begin with, it’s useful to remember that all iPods can play music that is free of any DRM and encoded in “open” licensed formats such as MP3 and AAC. IPod users can (and do) get music from a variety of sources, including the CDs they own. Music CDs can be imported using the free downloadable iTunes program, which exists for both Mac and Windows PC, and music is automatically encoded in open AAC or MP3 formats without any DRM. This music can be played on an iPod or any other music player that supports these open formats.
Friction is due to the music that Apple sells in its online iTunes Store. Since Apple does not own or control music, the company has to license the rights to distribute music from others, primarily from the Big Four music companies: Universal, Sony BMG, Warner, and EMI. These four companies control the distribution of more than 70% of the world's music. When Apple suggested that these companies license their music to sell it legally over the Internet, these companies were extremely cautious and demanded that Apple protect their music from illegal copying. The solution was to create a DRM system that implements special and secret software in every song sold on the iTunes Store so that this music cannot be played on an unauthorized device.
Apple was able to bargain for music rights during that period, which included the ability for the user to play their DRM-protected music on 5 computers and an unlimited number of iPods. Obtaining permission for such opportunities from music companies had no precedents at that time, and even today exceeds what is allowed in other online music services. However, the key point of our agreement with music companies is that if our DRM system is hacked and their music becomes available for playing on unauthorized devices, we have just a few weeks to fix the problem, otherwise they can withdraw their entire music from our iTunes store.
To prevent illegal copies, DRM systems should only allow authorized devices to play protected music. If a copy of a DRM-protected song appears on the Internet, it should not be played on the computer where it was downloaded or on a portable music device. To achieve this, the DRM system contains secrets. There is no conspiracy to protect content other than keeping secrets. In other words, even if someone uses the most sophisticated cryptographic system to protect music, he still has to “hide” the keys that open the music on the user's computer or on a portable music player. No one has come up with a DRM system that does not depend on such secrets for its functioning.
The problem, of course, is that there are so many very smart people in the world, some of whom have too much free time, who like to find such secrets and publish a way for everyone to get free (and stolen) music. They are often successful exclusively in this, so any company that tries to protect content using the DRM system should often update it, adding new secrets that are difficult to detect. This is a cat and mouse game. The DRM system Apple uses is called FairPlay (fair play). And although we had a few FairPlay hacks, we were able to successfully restore them by updating the software of the iTunes store, iTunes to play music and software on the iPod. So far, we have kept our promises to music companies,
With this introduction, let's explore three different options for the future.
The first option is to continue the current direction, when each manufacturer competes with its own “top to bottom” system for selling, playing and protecting music. This is a very competitive market in which large companies invest heavily to develop new music players and online music stores. Apple, Microsoft and Sony all compete with their systems. Music purchased from Microsoft’s Zune store is only played on Zune players; music purchased from the Sony Connect store is only played on Sony players; and music purchased from the Apple iTunes Store only plays on iPods. This is the current state of the industry, and the users are well served, with a steady stream of innovative products and plenty of choice.
Someone may argue that once having bought music in one of the closed music stores, the buyer is forever attached to the use of music players of only one company. Or, if they buy a certain player, they are attached to buying music only in the music store of this company. Is it true? Let's take a look at the data on the iPod and iTunes Store - these are the most popular products in this area and we have accurate data on them. Until the end of 2006, customers purchased a total of 90 million iPods and 2 billion songs from the iTunes Store. On average, these are 22 purchased songs from the iTunes Store for every iPod sold.
Today, the most popular iPod can store 1,000 songs, and studies show that, on average, an iPod is full. This means that only 22 out of 1000 songs, or less than 3% of the music on the average iPod, are purchased from the iTunes Store and protected using DRM. The remaining 97% of the music is unprotected and can be played on any player that can play open formats. It’s hard to believe that only 3% of the music on the average iPod is enough to rivet the user to buy only iPods in the future. And since 97% of the music on the average iPod wasn’t purchased from the iTunes Store, iPod users are definitely not tied to the iTunes Store to get music.
The second alternative for Apple is to license its FairPlay DRM technology to existing and future competitors in order to achieve interaction between players and online stores of different companies. On the surface, it looks like a good idea, because it can provide users with more choices now and in the future. And Apple could also benefit from this by getting royalties for its FairPlay DRM. However, when we take a deeper look, problems begin to arise. The most serious problem is that DRM licensing requires the disclosure of certain secrets to many people in many companies, and history teaches us that this will inevitably lead to a leak of secrets. Thanks to the Internet, the harm from such leaks is amplified, since a single leak can be spread around the world in less than a minute.
An equally serious problem is how to quickly repair the damage caused by such a leak. Successful recovery may require improving the store’s software, playback software, and player software with new secrets, and then transferring this updated software to tens (or hundreds) of millions of Macs, Windows PCs and players that are already in use. And all this must be done quickly and in a coordinated manner. It is very difficult to crank out when only one company controls all the sites. This is practically impossible when many companies control individual sites, and all of them must quickly act in concert to repair the damage caused by the leak.
Apple concluded that if it licensed FairPlay to others, it could no longer guarantee the protection of the music that it licensed to the Big Four music companies. Probably the same conclusion was made at Microsoft, since they also decided to switch their efforts from the “open” licensing model of their DRM to another “closed” model of their own music store, their own music collection organizer and their own player.
The third option is to completely get rid of DRM. Imagine a world where every music store sells DRM-free music encoded in an open, licensed format. In such a world, any player can play music purchased in any store, and any store sells music that can be played on any player. This is definitely the best alternative for users, and Apple would have accepted it at one point. If the Big Four agreed to license Apple their music without requiring DRM protection, we would switch to selling only DRM-free music on our iTunes Store. And every iPod that has ever been released can play this music without DRM.
Why can the Big Four music companies agree to allow Apple and others to sell their music without using DRM systems to protect it? The simplest answer is because DRM systems did not help, and it is possible that they will never help stop music piracy. Although these 4 companies require that all their music sold online be protected by DRM systems, the same music companies continue to sell billions of CDs every year that contain completely unprotected music. Yes exactly! The DRM system was never designed for CDs, so all music sold on a CD can be easily downloaded to the Internet, and then (illegally) downloaded and played on any computer or player.
In 2006, less than 2 billion songs protected by DRM were sold online by stores, while more than 20 billion songs were sold completely without DRM and unprotected on CDs by the same music companies. Music companies sell most of their music without DRM, and it doesn't seem like they are going to change this behavior, since the majority of their income depends on selling CDs that must be played on CD players that do not support any DRM system.
So if music companies sell more than 90% of their music without DRM, what benefits do they get from selling the remaining few percent of their music burdened with a DRM system? It seems that none. The technical skills and additional resources required to create, operate, and update a DRM system limit the number of participants in the DRM-protected music market. If these requirements were removed, the music industry could experience an influx of new companies willing to invest in innovative new stores and players. This can only be rated as positive by music companies.
In general, doubts about DRM systems have arisen in European countries. Perhaps those who are not happy with the current situation should redirect their efforts towards persuading music companies to sell music without DRM protection. Europeans, two and a half of these four large companies are located right in your yard. 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. If you convince them to license their music to Apple and others without DRM protection, this will create a truly interoperable music market. And Apple will welcome such changes with all my heart.
Translation from alexmak.livejournal.com
February 6, 2007
Along with the overwhelming global success of the Apple iPod music player and iTunes online music store, some people began to urge Apple to “open up” the digital rights management (DRM) system that Apple uses to protect music from theft so that music purchased from iTunes can be played on other digital devices of other companies, and also that protected music purchased at other online music stores can be played on iPod. Let's examine the current situation and how we got to it, and then take a look at three possible alternatives in the future.
To begin with, it’s useful to remember that all iPods can play music that is free of any DRM and encoded in “open” licensed formats such as MP3 and AAC. IPod users can (and do) get music from a variety of sources, including the CDs they own. Music CDs can be imported using the free downloadable iTunes program, which exists for both Mac and Windows PC, and music is automatically encoded in open AAC or MP3 formats without any DRM. This music can be played on an iPod or any other music player that supports these open formats.
Friction is due to the music that Apple sells in its online iTunes Store. Since Apple does not own or control music, the company has to license the rights to distribute music from others, primarily from the Big Four music companies: Universal, Sony BMG, Warner, and EMI. These four companies control the distribution of more than 70% of the world's music. When Apple suggested that these companies license their music to sell it legally over the Internet, these companies were extremely cautious and demanded that Apple protect their music from illegal copying. The solution was to create a DRM system that implements special and secret software in every song sold on the iTunes Store so that this music cannot be played on an unauthorized device.
Apple was able to bargain for music rights during that period, which included the ability for the user to play their DRM-protected music on 5 computers and an unlimited number of iPods. Obtaining permission for such opportunities from music companies had no precedents at that time, and even today exceeds what is allowed in other online music services. However, the key point of our agreement with music companies is that if our DRM system is hacked and their music becomes available for playing on unauthorized devices, we have just a few weeks to fix the problem, otherwise they can withdraw their entire music from our iTunes store.
To prevent illegal copies, DRM systems should only allow authorized devices to play protected music. If a copy of a DRM-protected song appears on the Internet, it should not be played on the computer where it was downloaded or on a portable music device. To achieve this, the DRM system contains secrets. There is no conspiracy to protect content other than keeping secrets. In other words, even if someone uses the most sophisticated cryptographic system to protect music, he still has to “hide” the keys that open the music on the user's computer or on a portable music player. No one has come up with a DRM system that does not depend on such secrets for its functioning.
The problem, of course, is that there are so many very smart people in the world, some of whom have too much free time, who like to find such secrets and publish a way for everyone to get free (and stolen) music. They are often successful exclusively in this, so any company that tries to protect content using the DRM system should often update it, adding new secrets that are difficult to detect. This is a cat and mouse game. The DRM system Apple uses is called FairPlay (fair play). And although we had a few FairPlay hacks, we were able to successfully restore them by updating the software of the iTunes store, iTunes to play music and software on the iPod. So far, we have kept our promises to music companies,
With this introduction, let's explore three different options for the future.
The first option is to continue the current direction, when each manufacturer competes with its own “top to bottom” system for selling, playing and protecting music. This is a very competitive market in which large companies invest heavily to develop new music players and online music stores. Apple, Microsoft and Sony all compete with their systems. Music purchased from Microsoft’s Zune store is only played on Zune players; music purchased from the Sony Connect store is only played on Sony players; and music purchased from the Apple iTunes Store only plays on iPods. This is the current state of the industry, and the users are well served, with a steady stream of innovative products and plenty of choice.
Someone may argue that once having bought music in one of the closed music stores, the buyer is forever attached to the use of music players of only one company. Or, if they buy a certain player, they are attached to buying music only in the music store of this company. Is it true? Let's take a look at the data on the iPod and iTunes Store - these are the most popular products in this area and we have accurate data on them. Until the end of 2006, customers purchased a total of 90 million iPods and 2 billion songs from the iTunes Store. On average, these are 22 purchased songs from the iTunes Store for every iPod sold.
Today, the most popular iPod can store 1,000 songs, and studies show that, on average, an iPod is full. This means that only 22 out of 1000 songs, or less than 3% of the music on the average iPod, are purchased from the iTunes Store and protected using DRM. The remaining 97% of the music is unprotected and can be played on any player that can play open formats. It’s hard to believe that only 3% of the music on the average iPod is enough to rivet the user to buy only iPods in the future. And since 97% of the music on the average iPod wasn’t purchased from the iTunes Store, iPod users are definitely not tied to the iTunes Store to get music.
The second alternative for Apple is to license its FairPlay DRM technology to existing and future competitors in order to achieve interaction between players and online stores of different companies. On the surface, it looks like a good idea, because it can provide users with more choices now and in the future. And Apple could also benefit from this by getting royalties for its FairPlay DRM. However, when we take a deeper look, problems begin to arise. The most serious problem is that DRM licensing requires the disclosure of certain secrets to many people in many companies, and history teaches us that this will inevitably lead to a leak of secrets. Thanks to the Internet, the harm from such leaks is amplified, since a single leak can be spread around the world in less than a minute.
An equally serious problem is how to quickly repair the damage caused by such a leak. Successful recovery may require improving the store’s software, playback software, and player software with new secrets, and then transferring this updated software to tens (or hundreds) of millions of Macs, Windows PCs and players that are already in use. And all this must be done quickly and in a coordinated manner. It is very difficult to crank out when only one company controls all the sites. This is practically impossible when many companies control individual sites, and all of them must quickly act in concert to repair the damage caused by the leak.
Apple concluded that if it licensed FairPlay to others, it could no longer guarantee the protection of the music that it licensed to the Big Four music companies. Probably the same conclusion was made at Microsoft, since they also decided to switch their efforts from the “open” licensing model of their DRM to another “closed” model of their own music store, their own music collection organizer and their own player.
The third option is to completely get rid of DRM. Imagine a world where every music store sells DRM-free music encoded in an open, licensed format. In such a world, any player can play music purchased in any store, and any store sells music that can be played on any player. This is definitely the best alternative for users, and Apple would have accepted it at one point. If the Big Four agreed to license Apple their music without requiring DRM protection, we would switch to selling only DRM-free music on our iTunes Store. And every iPod that has ever been released can play this music without DRM.
Why can the Big Four music companies agree to allow Apple and others to sell their music without using DRM systems to protect it? The simplest answer is because DRM systems did not help, and it is possible that they will never help stop music piracy. Although these 4 companies require that all their music sold online be protected by DRM systems, the same music companies continue to sell billions of CDs every year that contain completely unprotected music. Yes exactly! The DRM system was never designed for CDs, so all music sold on a CD can be easily downloaded to the Internet, and then (illegally) downloaded and played on any computer or player.
In 2006, less than 2 billion songs protected by DRM were sold online by stores, while more than 20 billion songs were sold completely without DRM and unprotected on CDs by the same music companies. Music companies sell most of their music without DRM, and it doesn't seem like they are going to change this behavior, since the majority of their income depends on selling CDs that must be played on CD players that do not support any DRM system.
So if music companies sell more than 90% of their music without DRM, what benefits do they get from selling the remaining few percent of their music burdened with a DRM system? It seems that none. The technical skills and additional resources required to create, operate, and update a DRM system limit the number of participants in the DRM-protected music market. If these requirements were removed, the music industry could experience an influx of new companies willing to invest in innovative new stores and players. This can only be rated as positive by music companies.
In general, doubts about DRM systems have arisen in European countries. Perhaps those who are not happy with the current situation should redirect their efforts towards persuading music companies to sell music without DRM protection. Europeans, two and a half of these four large companies are located right in your yard. 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. If you convince them to license their music to Apple and others without DRM protection, this will create a truly interoperable music market. And Apple will welcome such changes with all my heart.
Translation from alexmak.livejournal.com