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Last Updated: Wednesday, 7 February 2007, 18:04 GMT
Will Apple pick music's digital locks?
Jonathan Fildes
Technology reporter, BBC News

Apple iPod music players, Getty
ITunes dominates the music download market
Steve Jobs, the boss of Apple, has set out his stall on the future of the music industry

In an open letter on the Apple website, Mr Jobs argues that the copy protection software used to protect digital music downloads from piracy has not worked.

In the letter he outlines a world where the record industry abandons so called Digital Rights Management (DRM) systems.

"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." he wrote.

Digital locks

Apple uses its own DRM system known as FairPlay, which means music downloaded from the iTunes store can be played on computers running iTunes that have been authorised by the consumer and only one portable device, iPods.

Users can copy downloaded songs to a CD and then copy the disc back on to the computer so that the songs can then be moved to other portable devices - but the quality of the music is affected.

Other technology and media companies, such as Microsoft, have developed their own-brand DRM. This has resulted in a world of multiple systems with no guarantees that any will work with each other.

Groups like the International Federation of the Phonographic Industry (IFPI), which represents the music industry, have called for one interoperable system to be put in place.

But so far, the competing interests of music labels and technology companies have ensured this has not happened.

Mr Jobs says FairPlay was imposed on it by the big four record companies: Universal, Sony BMG, Warner and EMI.

Apple can see that the legislative tide is turning in Europe
Mark Mulligan, Jupiter Research

"When Apple approached these companies to license their music to distribute legally over the internet, they were extremely cautious and required Apple to protect their music from being illegally copied," he wrote.

Using FairPlay has not harmed Apple. Its iTunes store has sold about two billion songs since launching in 2003, and accounts for more than 70% of the US digital music market.

But many argue that any form of DRM harms consumers.

"It locks consumers into specific products. It's anti-competitive and anti-consumer," said Becky Hogge, executive director of the digital advocacy organisation, the Open Rights Group.

The European Commission agrees.

It says the many different DRM systems should work together.

Some member states, such as France, have already approved new laws that could force companies like Apple to share its digital technology with rivals.

'Ticking off'

Writing on his blog, Mark Mulligan, an analyst at Jupiter Research, believes that this is the real reason Mr Jobs has chosen now to speak.

"Apple can see that the legislative tide is turning in Europe," he wrote.

Creative MP3 players, AFP
iPods face competition from firms such as Creative

"Come the summer Apple could find itself in the untenable situation of ticking off an increasing number of markets where it could no longer sell digital music.

"So Jobs et al have taken a strategic decision that now is the time that they can do better without DRM than with."

Others say Apple has nothing to lose from coming out in favour of dumping DRM.

"It is not risking their business model at all," said Paul Jackson, principal analyst at Forrester Research.

Apple makes most of its money from selling hardware like the iPod. It makes very little selling music through iTunes.

"The only slight risk is raising the awareness to people buying music from iTunes that they are so tied in to the system.

"But to be honest most people buying from iTunes don't care."

Others argue that Mr Job's statement is a convenient way of shifting the blame for using DRM onto the record labels.

Alternative music

Writing on his blog, Jon Lech Johansen, a software engineer who has previously distributed tools for circumventing FairPlay, wrote:

"Steve claims Apple wants to sell DRM-free music but the labels won't let them. This of course flies in the face of reality."

I think it will be a long while before a big company like Sony Columbia comes round to thinking about DRM free content
Paul Jackson, Forrester Research

Mr Johansen pointed to a New York Times report that showed that tracks wrapped in DRM from iTunes are also available through other download services without copy protection.

The implication being that not all record labels insist on DRM, but Apple uses it anyway.

One of the services mentioned is eMusic, which has sold more than 100 million downloads in the past three years.

"Consumers prefer a world where the media they purchase is playable on any device, regardless of its manufacturer, and not burdened by arbitrary usage restrictions, said David Pakman, president and CEO of eMusic.

"More than 13,000 independent labels share this view. We are hopeful the remaining four will one day join them."

Digital cracks

An alternative solution to totally abandoning DRM, put forward by representatives of the music industry, is an interoperable system.

Although, Mr Jobs dismisses the idea in his letter, people like John Kennedy, chairman and CEO of the IFPI believes a system could be made to work.

CD on tray
Most digital music is ripped directly from CDs

"We have been talking about the desirability of interoperability for some time," he said.

Such a system would allow subscription services and new models for music consumption, he said.

"In spite of what Steve Jobs says it should be neither impossible nor unreasonably burdensome to implement interoperability whilst maintaining the security of DRM," said Mr Kennedy.

DRM is already successfully used by the film and software industries, he pointed out.

But with Apple now such a big player in the digital music market, will Steve Jobs' call for arms steamroller the industry's plans and pave the way for a DRM-free future?

Mr Jackson doesn't think the main players are ready just yet.

"The fact that we are starting to see crack appearing in this universal DRM motto means that we will start to see labels opting out," he said.

"But I think it will be a long while before a big company like Sony Columbia comes round to thinking about DRM free content."

So far, the record labels contacted by the BBC have remained tight-lipped.


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