DRM's lingering hold at iTunes
Apple usually saves its holiday cheer for early January, when it unveils its latest impeccably designed thinking machines. But here's something the company could do this month to make the season brighter for millions: It could stop selling DRM-wrapped songs at the iTunes store. If it acts now, the electronic locks could be gone in time for the year-end flurry of holiday iTunes Gift Cards redemptions.
I don't think I'm asking too much here. After all, Amazon's been doing it for a year, and Napster and Rhapsody have been all-MP3, all-the-time for months. Even Wal-Mart is DRM-free now! But here we are, almost two years after Steve Jobs posted his anti-DRM manifesto, and half of the tracks on iTunes remain shackled in a DRM that renders them unplayable on non-iPod portables and on many types of home-networking gear. EMI and many independent labels have made the leap to DRM-free at iTunes, but Universal Music Group, Sony BMG and Warner Music Group have not.
As Dan Frommer at Silicon Alley Insider observed today, the public doesn't seem to give a hoot about this. Otherwise, Amazon's MP3-only approach (and lower prices) would have turned it into the dominant online retailer instead of leaving it among the also-rans. Apple continues to rule the market with a potent combination of hardware and software -- a position enhanced by the phenomenal popularity of the iPhone, where iTunes is a built-in application. Yet I think Lucas Gonze is right in arguing that an advantage built on an exclusively held, incompatible DRM is unsustainable. The number of devices that can play music files is growing rapidly, and the vast majority of them don't work with Apple's DRM. My household has four (count 'em, 4) iPods, and yet I won't buy anything with DRM on it because we also have multiple computers, disc players and networked music devices that get all pouty when I ask them to play a locked file. Take it from me, DRM-polluted collections take the fun out of replacing an old PC.
When asked about the lingering DRM, an Apple spokesman suggested that the question was more properly put to the major record companies. The companies, in turn, didn't want to be quoted on the delicate subject of Apple. What seems clear, though, is that the issue is caught up in the long-running negotiations between the labels and Apple over variable pricing. Jobs has stuck with the 99-cents-a-track model because, he says, consumer crave simplicity. But the labels want to extract more money from consumers for hot new titles (or treasured oldies) while also slashing prices to goose demand for slow-selling tracks. Jobs obviously isn't a purist on the topic -- when EMI introduced its DRM-free tracks, they sold for $1.29 each. (Nice concept: charge more for taking away a feature that drains value from your product.) And the notion that people will be confused by an array of prices seems silly, given that they already confront variable prices for albums on iTunes (and at brick-and-mortar music retailers).
The truly strange thing here is that neither side is well served by DRM. The unpredictability of the locks (I mean really, how many people know which bands are on which labels?) is a real source of confusion for iTunes users, and it puts the store at a competitive disadvantage. Meanwhile, from the labels' perspective, the DRM isn't as effective at stopping piracy -- witness how easy it is to download a bootlegged MP3 version of just about any new song -- as it is in binding people to Apple products and the Apple store. And to think the labels gave in to Amazon's demand for DRM-free MP3s in part because they hoped the online retailer could break Cupertino's stranglehold on the Internet music market....
-- Jon Healey