Jobs’ DRM Argument Has Hidden Undercurrent

There’s more to this Steve Jobs DRM announcement than meets the eye.

Jobs, the head and public face of Apple Computer, recently called for the music industry to eliminate its Digital Rights Management (DRM) systems. The main reasons Job gave were that the policy has not been effective against piracy and that too many providers using too many different systems left users out in the cold most of all.

The Zune, you’ll remember, has its own DRM system, as does Sony. And yes, Apple does, too, famously called FairPlay. All of these systems have come about because the giants of the recording industry do not want their songs distributed to the wide world without proper payment for said distribution. If Apple lifts its DRM requirement, then that eliminates the sticking point for Europe.

What is implicit but not explicit in Jobs’s call to action is that Apple is about to lose potentially thousands of customers throughout Europe. France, especially, but other countries as well are lining up to force Apple to stop using FairPlay. These countries claim that such DRM practices are proprietary and eliminate competition. (And they do have a point: If the iPod has an 85-percent market share and you have to use iTunes to get tunes for your iPod, then you by using an iPod are reinforcing that proprietary practice whether you realize it or not.)

And as to the argument that Apple itself would lose money if it eliminated its DRM, FairPlay, analysts insist that the company makes far more money on selling hardware than it ever makes on selling tunes.

DRM is still very much a staple in the movie and software industries, despite the advent of downloadable applications and movies and tremendous problems with piracy. The giants of Paramount and 20th Century Fox and Microsoft don’t show any signs of opening up their products to a DRM-free universe. Is it naive for Jobs to think that he can wrest DRM from the lords of the music manor? Perhaps. Whatever the case, his motivations for making the argument are more than they seem at face value.


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