Apple's Jobs calls for DRM-free music

Record companies are the ones who demand digital rights management technology, not Apple, CEO says in rare open letter.

By Tom Krazit
Staff Writer, CNET News.com

Published: February 6, 2007, 12:10 PM PST

Last modified: February 6, 2007, 5:32 PM PST

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update In a rare open letter from CEO Steve Jobs on Tuesday, Apple urged record companies to abandon digital rights management technologies.

The letter, posted on Apple's Web site and titled "Thoughts on Music," is a long examination of Apple's iTunes and what the future may hold for the online distribution of copy-protected music. In the letter, Jobs says Apple was forced to create a DRM system to get the world's four largest record companies on board with the iTunes Store.

But there are alternatives, Jobs wrote. Apple and the rest of the online music distributors could continue down a DRM path; Apple could license the FairPlay technology to others; or record companies could be persuaded to license music without DRM technology. The company clearly favors the third option.

"Imagine a world where every online store sells DRM-free music encoded in open licensable formats," Jobs wrote. "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."

Jobs' letter is a bit surprising in that Apple, with the most successful online music store on the planet, has profited by including DRM technology in its products, said Mike McGuire, an analyst with Gartner. "I think it's really interesting that the company that's the greatest beneficiary of DRM systems is basically telling the industry, 'This is a problem, you need to fix this,'" he said.

RealNetworks saw Jobs' letter as a vindication of its efforts to encourage interoperability between music services, which led as far as the Harmony software that allowed songs bought from other online stores to play on the iPod.

"We've been talking about the need for open formats for a very long time," said Dan Sheeran, senior vice president for digital music at RealNetworks.

The letter appears to address critics of the iTunes Store in Europe, most recently evidenced by a decision in Norway, where regulators deemed the iTunes Store illegal. An Apple representative said the letter was not written in response to those recent legal decisions.

"Much of the concern over DRM systems has arisen in European countries," Jobs wrote. "Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free."

"You've got to hand it to Steve Jobs; he knows how to attract attention and how to deflect attention," said James McQuivey, an analyst with Forrester Research. "He turned the whole European DRM question on its ear. 'You want me to open up FairPlay? Well, I don't even want FairPlay.'"

The Recording Industry Association of America, however, issued a statement interpreting Jobs' letter as an offer to license the FairPlay technology.

"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," it said in an e-mailed statement.

Opening the FairPlay DRM technology wouldn't be a wise strategy because Apple would have to give up the secrets of how that technology works, and it's likely that a hack for the technology would appear very quickly, Jobs wrote. Under its agreement with the record companies, Apple has just a few weeks to fix FairPlay if a breach is detected--otherwise the record company can pull all of its songs from the iTunes Store, he wrote.

"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," Jobs wrote in his letter.

An Apple representative declined to comment on the RIAA's interpretation of the letter.