Is Steve Jobs Sabotaging DRM with iPod + iTunes?

This idea was mentioned briefly during a panel discussion at CMJ’s Music Marathon 2005.

As we are aware the iPod is by far the leading digital music player in market share, hovering near monopoly. Of the formats that matter, the iPod is able to play any MP3, any non-DRMed (Digital Rights Managed) AAC and Apple’s FairPlay AAC files. Likewise competing digital music players are able to play any MP3, some can play non DRMed AAC and all can play Microsoft’s DRMed WMA files. The iTunes music store sells only Fairplay AAC files, while competing services such as Napster serve DRMed WMA files. Thus if you are to deal in on-line music stores or services you must pick a format and stick to it or else you will find that your music is not compatible with each other. Once you pick a type of player, you are basically stuck with it. Or are you?

There is a format that all players are compatible with, MP3 (and non DRMed AAC). If you want the option of changing your digital music player you are forced to keep as much music as possible in non-DRMed form.

Apple could have allowed the iPod to work with alternative DRMs, but they did not. In July 2004, RealNetworks released their Harmony DRM technology that allowed music downloaded from their music store to be played on an iPod. Apple immediately sought legal methods within the DMCA to stop harmony. Apple also used their technological know-how to block harmony from video iPods as well as previous iPods through firmware updates.

Even as you read this, France is busy working on a law forcing Apple and other companies to open their DRM technologies. Sharing FairPlay technologies with their rivals would open the iPod to alternative DRMs, not just in France, but worldwide. Industry insiders believe that Apple has no such plan, and instead will pull out of the French market altogether.

Is this simply another case of VHS or Beta (or HDTV-DVD or Blu-Ray) or does Steve Jobs and Apple have other motives. As close to a monopoly as the iPod is, they have little hope of creating a monopoly of digital music sale, for that market is far to lucrative and dynamic to keep out competition. Is Apple just trying to harm the consumer by keeping the iPod as Fairplay only?

I believe that answer is No. The key here is that every current digital music player plays MP3s. Those good old, non-DRMed, free to use however you want MP3s. Music stores and services, such as emusic, allofmp3 and are already starting up that offer non-DRMed music for purchase or subscription. The legality of some of these services might be in question (not to mention some other programs that have been developed to remove FairPlay from AAC files). But the window is open, and was left open by Apple. The biggest selling point of these services is that the music you download can be used in any player, including the iPod.

Digital music is still in its economic infancy and Apple has done as much as anyone for showing how the digital music market can function. However, Apple has also done as much as anyone for sabotaging the efforts of DRM from the inside.

This entire idea is pure conjecture and has very little solid proof beyond connecting some dots and seeing where they may lead. I would not be surprised that in the future, iTunes will attempt to offer non-DRMed music. Initially a few songs and albums here and there from non-RIAA artists. When the flood gates are cracked open, more and more music will follow suit.