February 23, 2007

Steve Jobs on iTunes, iPod & DRM

The Bottleneck

Steve Jobs’ open letter
Thoughts on Music advises the record industry to abolish Digital Rights Management (DRM), the copy-protected downloads. In his view, DRM cannot prevent piracy.

The “big four” Universal, Sony BMG, Warner and EMI control 70% of world’s music distribution and fiercely protect their investments against online piracy.

Jobs argument is simple. Record companies sell DRM-free CDs which are easy to copy and redistribute online, but they impose DRM copy-protection on online stores hindering the growth of legal music sales.

Having the ability to put purchased music on several devices that consumers own at home or work is the DRM bottleneck.

Shrewd and Ahead of the Curve

Steve Jobs is a proven moneymaker. He wants to sell music legally, not give it away.

If DRM were to go away today, iTunes stands to attract a massive customer base of potential music shoppers who own other non-iPod devices.

Alternatively, Jobs is promoting systems interoperability and is proposing to license Apple’s FairPlay DRM technology to all other devices to standardize the entire industry. Obviously a major business opportunity, only if it were realistic.

Then, there is iPhone -- wired for everything.

Consumer and Environmentally Friendly Music Industry

Manufacturing-driven music industry is a thing of the past. Experience suggests that just as LPs became extinct CDs are quickly facing similar fate.

Music industry evolved.

We griped endlessly about having to buy the full album when we only liked one song. Now that problem is solved. We buy and download only those music selections we want and organize them into music libraries on our preferred digital devices.

Common Sense: Affordability = Lower Impetus for Stealing

iTunes model is appealing. It is uncomplicated. For anyone who can afford an iPod, low-cost songs are easily affordable.

In a partnership of music artists, producers and sellers, everyone should be fairly compensated.

Innovation is not without pitfalls but guided by visionary leadership and common sense it has proven to improve our lives.

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