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Steve Jobs takes first step to free-DRM music

February 7, 2007

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Apple Inc. hits the news once again this week when Chief Executive Steve Jobs called, just yesterday, the four major record companies to start selling songs online without copy protection software known as digital rights management (DRM).

Jobs said there appeared to be no benefit for the record companies in continuing to sell more than 90 percent of their music without DRM on CDs, while selling the remaining small percentage of their music encumbered with a DRM system.

“If such requirements were removed, the music industry might experience an influx of new companies willing to invest in innovative new stores and players. This can only be seen as a positive by the music companies,” he said in a statement posted to his company’s Web site.

As you have read before, Apple has been under pressure in Europe to make iTunes music compatible with players other than the iPod. On January 25 Norway’s consumer ombudsman said Apple must open access to iTunes by October 1 or face legal action. The company has also faced some criticism because songs bought on the iTunes music store play on the iPod and not other digital music players.

“Perhaps those unhappy with the current situation should redirect their energies toward persuading the music companies to sell their music DRM-free,” said Jobs about the European action.

Apple also is due to reopen talks with the four majors in early March to discuss terms of their relationships with the iTunes Music Store, according to a source familiar with the discussions.

The four majors — Vivendi’s Universal Music Group; Sony BMG Music Entertainment, which is owned by Sony Corp. and Bertelsmann; EMI Group; and Warner Music Group — all negotiated one-year extensions with Apple last year, according to the source.

Analysts have suggested that Jobs might be trying to deflect pressure from the European Union regarding the interoperability question to the record labels. But Jobs said Apple had concluded that if it licenses FairPlay to other companies it could no longer guarantee to protect the music it licenses from the major record companies.

“Why would the big four music companies agree to let Apple and others distribute their music without using DRM systems to protect it?” Jobs wrote on the Apple Web site (www.apple.com/hotnews/thoughtsonmusic/). “The simplest answer is because DRMs haven’t worked, and may never work, to halt music piracy.”

But senior record company executives disagreed with Jobs’ assertions, saying they doubted they would start selling music without protection any time soon.

“How can you be in the digital business of content and say you’re not going to protect it?” said one executive who spoke to Reuters on condition of anonymity. “So is the film and TV industry looking at doing this? I can guarantee you they’re not.”

Jobs estimated that only about 3 percent of the music on the average iPod is purchased from the iTunes store and therefore protected with a DRM licence. Because of that, “iPod users are clearly not locked into the iTunes store to acquire their music,” Jobs wrote.

Jobs also said that more than 20 billion songs were sold DRM-free on CDs in 2006.

Music industry watchers, particularly at independent music companies, have intensified calls in recent months for the majors to sell their music without copy protection.

Apple’s alternative is the only way we’re going to get complete interoperability,” said Tim Bajarin, president of Creative Technologies, a Silicon Valley consulting firm.

in: Reuters

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