Sunday, May 13, 2007

Apple and DRM, Corporate Trust

Quite a while ago now Apple began to offer some tracks from EMI at the iTunes Music Store sans-DRM, and since then there has been quite a range of responses from anti-DRM folk around the Internet. Steve Jobs has also taken a few jabs at DRM in public. What's going on? A company that once clung to DRM as part of the magic glue holding together its vertical stack of the iTunes music store, iTunes and the iPod, now wishing it dead? Is Steve Jobs now some kind of consumer hero? Not really, but it doesn't change the fact that in the end the smart thing for people to do is to buy Apple's digital music wares (or at least not to buy Microsoft's).

There are a few things that some people get really worked up about regarding this deal. One of them is pricing. The DRM-free tracks cost more, and this means that suddenly not every song in the iTunes music store costs 99¢ anymore. Count me among those that don't give a shit. Apple is offering people something better with these songs; not only do they come without DRM, aiding interoperability, allowing people to avoid iPod lock-in, allowing trading among friends. This last one is important to me, even if it's illegal by the books. When my friends live in another state we can't listen to CDs together to share music we enjoy. With DRM we're being trusted to respect the spirit of copyright law, and hopefully we do. Also the DRM-free tracks have higher sound quality, not as a result of their not having DRM, but just as an additional distinguishing feature. Some people get really passionate about the idea of all songs costing the same in the iTunes Music Store, particularly because Steve Jobs himself has fought the record companies to keep it that way. But those people shouldn't be angry about this; Apple still isn't letting the companies charge differently for different songs. Furthermore, Steve Jobs doesn't care about keeping all songs the same price because he thinks it's good for consumers, he's doing it because he thinks it's good for his business. In online music right now what's good for his business and what's good for consumers overlaps (in general, regardless of whether one-price-fits-all is actually good for consumers). Even though Apple has a strong position already, there are many more people that don't use an online music service than there are that use one, and Apple has to continually win those new users in order to maintain their strong position. I actually think that the pricing of online music tracks is often silly. Buying all the tracks on an album is less expensive than the CD for bands that have albums with fewer and longer songs, and more expensive for bands with albums with more and shorter songs. The Minutemen's Double Nickels on the Dime and Radiohead's Kid A both cost me around $13 on CD (Kid A may have been a bit more); if all those tracks were available on iTunes for 99¢ a pop I would have paid $9.90 for Kid A ($10.89 if you count the "hidden" stuff at the end as a track) and $42.57 for Double Nickels. Would I really pay 99¢ for Take 5, D.? Probably not, but it brings a smile to my face when I hear it. There is currently no better deal on the consumer side of music than the compact disc, and even with Apple's new online offerings I still buy CDs if they want an album and recommend that others do the same. But if the market will sustain Apple's wacky pricing model, and they think it's good for them overall (surely most of their customers aren't buying full hardcore albums from the iTMS) then I say they can do whatever the hell they want.

There's also the issue with European governments trying to force Apple to license their DRM to other companies at a reasonable rate. People think that this move will convince those governments not to do that. I don't see how it should have any effect, since they'll still overwhelmingly sell tracks with DRM, but Laws Are Weird. Apple's DRM, as I understand it, isn't really built to be licensed to other companies the way Microsoft's is, and actually would stand a better chance of being broken if they licensed it. If Apple can refuse to license their DRM they can keep the people that already have lots of DRM-laden iTMS songs locked to the iPod, even as they sell them new songs that don't themselves lock their users in. I haven't been paying attention to Apple's legal negotiations in Europe, but if they manage to get the governments off their back, good for them. I don't really care if other companies have the FairPlay spec, I'd rather consumers get a hold of it ;-).

I don't think that this whole thing is about the European courts, though. Why would Jobs take jabs at DRM if that was the case? Why would Apple invite other record labels to offer their songs DRM-free? I think there's more at stake. Apple makes its money on the iPod. The iTMS is a lock-in vehicle for the iPod, and also a way to prevent them from getting sued by record companies for supporting piracy. Apple's Goal #1 is to protect and grow iPod sales. The problem is that to keep up their vertical market they need to sell two things: the iPod and FairPlay DRM. Specifically they're selling the iPod to consumers and FairPlay to record labels. If consumers reject the iPod, or if the labels reject FairPlay, they're in trouble. Apple is one of the best companies in the world these days at selling to consumers. But Microsoft is probably the best company in the world at selling to corporations. Microsoft is Apple's top competitor in the DRM business, and Microsoft has shown a willingness over the last few years to do lots of work to support the DRM that media companies want. Even as Apple is putting lots of computers and iPods in our hands, they're scrambling to match Microsoft's Protected Video Path to satisfy corporate content holders. The battle to get content on the platform by having the strongest DRM system is being won by Microsoft. Apple's best chance is to play to consumers. If consumers reject DRM then Apple doesn't have to fight that battle. And consumers should reject DRM, because our digital rights don't need any management! So Microsoft happens to be pushing against consumers right now and Apple happens to be pushing for them.

EDIT: Apparently I'm way behind the times and Apple does sell albums on iTunes now. Which renders the last half of the paragraph on pricing irrelevant. It doesn't really change the main point of this post... actually, that stuff had nothing to do with my main point, so I shouldn't have even put it in here. Now I still wouldn't buy stuff from the iTMS with DRM (which includes most of the iTMS' offerings), and I can't really buy anything from the iTMS unless they support Linux. That last problem is pretty much specific to me, so for most people, especially people wanting to buy single songs, the iTMS non-DRM stuff might be worth a look.

1 comment:

Danielle in Iowa said...

I stopped reading Boing Boing a few months ago - I am glad I can still get my anti-DRM fix somewhere still :-)