Richard Staeuber on iTMS’ compliance problems in Europe
February 9th, 2007My friend and colleague Richard Staeuber has been interviewed by TheStreet.com about the headwind Apple is facing in many European countries because of its non-interoperable DRM system (FairPlay).
The article also mentions that Steve Jobs has recently blamed the major labels for obliging Apple to impose DRM protection on iTunes, and that he would be happy to sell non-DRM’ed music. EFF’s Jason Shultz doubts that this statement could be taken at face value.
At the current state of play it doesn’t seem to make much business sense to try to bind consumers to iPods through iTunes: First, the vast majority of songs played on iPods is not DRMed, and–as anti-DRM activists rightly claim–it is logically impossible to prevent the use of non-DRMed music by selling DRMed music. Second, iPods somehow appear to be cooler than a) iTunes files and b) MP3 players of Apple’s competitors, and they’re expensive: If a consumer wants to replace her iPod, I surmise that it would be cheaper in most cases to replace it by a no-name player and either burn-and-rip her iTunes or buy the respective songs at another online music store, than buying a new iPod.
My take on the story is that Steve Jobs’ statement is compatible with Apple’s business interests–at least in the short or mid-term. The situation would only be different if a) the next generation of iPods is a flop or if b) non-DRMed music were not available anymore.
February 9th, 2007 at 10:39 am
Binding consumers to iPods through iTunes obviously prevents potential customers from buying songs from Apple’s store. Furthermore, Apple sells the music in a low quality format at 128 kbps. This may be appropriate for heavy metal music, but listening to more serious music is much a better experience with higher bit rates. Sure, most of the sold music is kind of the sound you listen to while head shaking or so and the listening-experience has also to do with the quality of the speakers. But why should customers buy lower quality music with digital protection as long as they can buy the same with higher bit rates and in an unprotected format at the same or even lower price?
Sites like allofmp3.com, mp3stor.com and mp3search.ru offered a huge variety of unprotected music at variable bit rates and variable formats for just some cents. Sure, offerings like these have been claimed as illegal due to the misuse (or lack) of the national law (e.g. Russian law on copyright and neighboring rights until October 2006). The national property law had not covered the exchange and selling of digital information. Since then, it does. But as it’s a violation of Russian law, being involved in an Russian court trial is still unlikely to happen. Sueing national companies doesn’t have to be in the interest of Russia too (it might be, as Russia wants to become a member of the WTO and has actually signed the protocol covering conclusion of bilateral talks on it’s bid for WTO).
Whether customers of digital music of the mentioned stores offend against the national law (which I don’t consider like this, but the supplier of the material certainly do) is not the point of this issue. The point is the following: Providing digital music with DRM-protection or even binding customers at some sort of playing device doesn’t lift the selling rates of digital music at all as it’s not in the interest of the customer. The customer wants to buy digital music that can be handled as the music he’s buying on a physical data carrier (e.g. compact discs). The music has to be playable on different devices (computer with different operating systems and playing software, portable and stationary music players) and as often as the customer wants (no limitation). A customer-satisfying DRM-system has to fulfil these standards.
The problem is though, there is currently no DRM-system able to distinguish legal digital music exchange (e.g. exchange of bought music between family members and friends, use as teaching material in schools) from illegal exchange. That’s why the big music labels insist on selling digital music DRMed which is actually the wrong way to solve the problem. It’s due to national law systems to protect the intellectual property. In the long term, DRMed music won’t become as accepted as the music labels wish. The customer still decides (he’s the king). As long as there is no functional DRM-system, there shouldn’t be any. Why not selling digital music without DRM-protection? Wouldn’t customers approve this with an increase in digital music sales? The border to buy music is easylier crossed, when the music format is exchangeable and unprotected because that’s what the customer wants. Another point of course is the price of digital music. That’s going to be settled (or actually being settled) by the market.
Moreover Apple’s (and others) store could learn from the as illegal considered stores settled in Russia and offer the music in different bit rates (up to CD-quality) and different formats (e.g. mp3, wav). The system of those stores bases on a certain price per MB you download and is therefore the same for all kind of music. The longer the piece and the higher the quality, the more the customer pays.