Thoughts on Music

[Jessterw]

Nice commentary by Steve Jobs on the state of online music and DRM...

http://www.apple.com/hotnews/thoughtsonmusic/

[Jammrock]

Wow he's a spin master. I give him a 9 just for his creative use of skewing the numbers.

[Jessterw]

Care to elaborate?

[Technoid]

"Don't blame poor us (Apple), the evil men (record companys) have a gun to our heads!"

"Since we got that gun at our head we can only trust ourselfs"

"but it's such a small amount, so why get so upset?"

"Go pick on the evil men and not on poor us, it's their fault"

[Jessterw]

That's a rather amusing spin on what was said, all things considered.

There's no crying foul there. It's really a simple statement that Apple brokered the best deal they could and some of what was involved in that deal. Sure Jobs puts some spin on the success of the iTunes Store in relation to the success of the iPod, but even Apple detractors have flaunted those same figures to show that the iTunes Store isn't the success that Apple claims it to be.

Jobs isn't saying DRM is right or wrong, he's saying that there are reasons for why the FairPlay implementation is the way it is, and that so allowed by their contracts with the record companies, Apple would gladly dump the DRM form iTunes Store purchases.

As far as who's to blame for DRM lock-in and the associated iTunes-iPod lock-in, I think Jobs laid out a rather fair explanation for why the latter exists in the manner it does. In the end, the record companies are to blame for DRM even being an issue, as is even more apparent with the Zune and Microsoft's deal with one of those very record companies. I'm sure MS would rather not have to deal with DRM either.


Note: I'm not saying Jobs' motivation for this was purely out of the good of his heart - it's a business decision and an attempt deflect some of the criticism Apple has received for everything from iTunes Store DRM to iTunes-iPod lock-in. DRM sucks, and in many ways Apple showed the record industry they could make money off of DRM restricted music, thus adding to the problem for a period of time. The record companies aren't thrilled with DRM either though (largely due to its shortcomings I would venture).

[az]

I think he posted this because in Norway (IIRC) apple is under heavy pressure for infringing local customer rights laws with iTunes DRM and it being locked to the iPod. Nevertheless, what he said was true, though he really should have left out the number-spinning paragraph.

[Umfriend]

Much ado about nothing. I'm with the Jesster here. I am in the dark what paragraph here is number-spinning? What would be appropriate numbers then?

[TransformX]

Apple is in panic (see example: http://jeremy.zawodny.com/blog/archives/005286.html) because whatever they may claim, others did and do manage to sell music without DRM. This means that if Apple really wanted to, they could do the same thing. If all cases are equal, Apple prefer to maintain their hold on the market through drm+itunes+ipods instead of being more consumer friendly and risking losing a market share.

[Umfriend]

That makes no sense to me. Apple may be bound by contract and Yahoo may have gotten a better deal by now. They risk losing market share just by (possibly) having a deal with the music industry that is worse than whatever it is that Yahoo has. I do not know what the situation is but did find this:

6. Can I burn subscription songs?

Subscription music is not burnable. However, you can always purchase individual songs and albums for an additional per song or album fee (generally 79 cents per track or $9.99 per album). Subscribers save 20% on music purchases and that music is yours to keep, regardless of your subscription status.

8. What happens to subscription songs if I end my subscription?

If your subscription ends, the subscription tracks saved on your PC and on portable devices become non-playable. As long as your subscription is up to date, the songs are yours to use and enjoy.

And there is no DRM?

[Jammrock]

Care to elaborate?

Today’s most popular iPod holds 1000 songs, and research tells us that the average iPod is nearly full. This means that only 22 out of 1000 songs, or under 3% of the music on the average iPod, is purchased from the iTunes store and protected with a DRM. The remaining 97% of the music is unprotected and playable on any player that can play the open formats. Its hard to believe that just 3% of the music on the average iPod is enough to lock users into buying only iPods in the future. And since 97% of the music on the average iPod was not purchased from the iTunes store, iPod users are clearly not locked into the iTunes store to acquire their music.

This is the main reference.

First off, this is over generalizing and a small skew. If the average iPod is "nearly full," and holds "1000 songs," how do you get 22 out of 1000? How nearly is nearly? Granted this may only change it from under 3% to over 3%. The other part that this may or may not take into effect are the people that store non-musical content on their iPod. Pictures, video, files, etc take up what percentage on average? How would this change the numbers? We don't know, because either they can't or won't say.

The next problem is, how many people have owned, or do own, multiple iPods? iPod are nice, but they have been known to die rather easily and don't have the best of warranties. And how many iPod zealots always go out and buy the latest and greatest just to own it. Or how many people own multiple iPods? The big HDD unit for most stuff, and say a nano or shuffle for working out? So maybe Apple has sold 90 million iPods, but how much duplication is there? My brother alone has owned 5 iPods (he has a nack for winning them and not giving any to me).

But the thing that bugs me is that I don't know a single iPod user who actively buys music on iTunes that has less than fifty purchased songs. Granted, my case may be the extreme, but still. In a world where >90% of most albums suck, people are buying one-two, maybe three, songs per album off stores like iTunes more and more. As Mr. Jobs "we have sold over 2 billion songs on iTunes" bit suggests. This does not take into account the users who either buy all their music from iTunes (I know many) or buy none of their music through iTunes (which I also know a lot). So while the ripper may not care, the iTunes faithful would if they ever become faithless. If I've spent $250 on iTunes music and want to take it elsewhere, I'm either out $500 (because you have to rebuyit) or have to find an illegal way to circumvent DRM (which there is, and Steve knows it).

Now Apple may have taken a lot of these things into account and Mr. Stevie "Wonder" Jobs didn't talk about them for the sake of time and space, but I don't buy these "averages" and numbers. I know too much about the tech world to believe that there are anywhere near 90 million unique iPod users, all of whom buy music on iTunes.

Okay...enough of that topic.

A lot of what Steve says in the end I agree with. I do NOT, however, buy the BS about "This [DRM-free online stores] is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat." Didn't he open the article about 2 billion iTunes songs sold? Even if the average profit per song is $0.25, that's $500 million in raw profit! Steve may be generous enough to do a DRM-less iTunes, but the Apple board might have something to say about that.

In 2006, under 2 billion DRM-protected songs were sold worldwide by online stores, while over 20 billion songs were sold completely DRM-free and unprotected on CDs by the music companies themselves. The music companies sell the vast majority of their music DRM-free, and show no signs of changing this behavior, since the overwhelming majority of their revenues depend on selling CDs which must play in CD players that support no DRM system.

Good gawd, what world does he live in? The sales number may be right, but no DRM on CDs? Please! CDs have been DRMed for YEARS! Sure you can play it your stand alone CD player, but try putting most major label CDs in your computer (especially PCs) and see what happens. Hasn't he heard a single peep about the rootkit scandal, the crashing PCs, the sharpie fix, or the CDs that won't play except via a bastardized DRMed player? He's seriously out of touch or living in his own little bubble if he thinks the big 4 don't spend hundreds of millions of dollars on DRMing CD technology, or trying to get rid of CD technology so they can better control the DRM.

Anyway, Steve does make some good points. But overall this is a spin job to counter Norway, France, and other European countries who are attacking iTunes.

Jammrock

[Jessterw]

Oh there's no doubt he's countering the flack Apple is receiving in Europe over the iTunes-iPod lock-in, but I'm still not convinced that Jobs wrote this piece to spin the situation; counter, yes.

You're right that he uses the averages to make a point, even though those numbers are quite obviously not indicative of iPod users as a whole. or on a case by case basis. It's all averages after-all.

Let's be honest though, anyone who actively uses the iTunes Store to download music is more than aware of the lock-in. Anyone who claims they've been duped is lying. The lock-in still sucks in the grand scheme of things, but Apple's reasons for it are justified. Obviously they're not unhappy with the lock-in, but again, Jobs' point was that music purchased from the iTunes Store still makes up a relatively small portion of the music being placed on iPods.

As as side note, Jobs has never claimed that there weren't ways to circumvent the DRM in music purchased from the iTunes Store. In fact, a rather large part of what he wrote revolved around that very fact. You can of course, also just burn a CD. Not an optimal method for transferring, but it's there as an option.

In terms of Apple being worried about DRM-less music across the board, I'm sure they would be concerned about some loss of revenue, but Apple has a tendency to believe that the quality of the product or service being offered will be enough to retain users, or increase the number of those as it may be.

Jobs' comment on CDs and DRM was a little odd, but I think he was glossing over details to illustrate that in general you can still take a CD and rip tracks from it all you like. Sure there are a number of CDs out there where this is not the case, but overall it is... at least with the CDs I purchase and rip unto my Mac (and I purchase a lot of music).

So in the end, I'm not saying Jobs made these statements out of the kindness of his heart, but rather because Apple is taking considerable heat for how they're doing things, which is a direct result of the deal they made with the record companies. Apple has also rejected the offer of Nettwerk Music Group (Barenaked Ladies, Avril Lavigne, etc.) to have their music sold without any DRM (as they do on eMusic), so one has to wonder how that plays into this. It could be assumed that Apple won't make a change until one or more of the major record labels makes the same sort of offer. That said, Jobs is now on record for saying Apple would make the iTunes Store DRM-less in a heartbeat.


@TranformX - First off Zawodny works for Yahoo (though I do highly respect his word, so that's not a knock), secondly Yahoo experiments in DRM-less music, but their primary offerings are just as DRM-encumbered as those from iTunes. In fact, their very subscription service could not exist were it not for DRM. While some other online music stores do sell DRM-less music, those stores do not have the vast catalog of major record label artists that the iTunes Store does. The iTunes Store does because of the deals Apple made with those record companies four years ago. Microsoft, Yahoo, and several others have had to make similar deals (and MS really got shafted with the Zune tax Universal layed on them).


I absolutely love Microsoft's response to all this:

Jason Reindorp, marketing director for Zune at Microsoft, said Mr. Jobs’s call for unrestricted music sales was “irresponsible, or at the very least naïve,” adding, “It’s like he’s on top of the mountain making pronouncements, while we’re here on the ground working with the industry to make it happen.”

“He’s certainly a master of the obvious,” Mr. Reindorp said, adding that “the stars were already aligning” to loosen the restrictions.

There's no doubt that others have been working towards a DRM-free music world for a long while now, but for MS to make that claim while copying the iTunes-iPod model with the Zune is laughable. Granted, Gates has been quoted as saying he would prefer to not be dealing with DRM at all.

[Jammrock]

It would seem that DVD Jon agrees with my assessment of Steve Jobs little DRM letter...well, parts of it:

http://www.dailytech.com/article.aspx?newsid=6012

http://nanocrew.net/

One of Johansen’s immediate criticisms are what he believes to be Jobs’ use of misleading statistics. Jobs said in his letter that customers purchased a total of 90 million iPods and 2 billion songs from the iTunes store, which he equated to 22 songs purchased for each iPod ever sold. Johansen points out that the stats are misleading because not all of those 90 million iPods are in use, and that some of them may not even be operational.

“It’s the number of iTunes Store customers and average sales per customer that’s relevant, and Apple has never disclosed these figures,” Johansen wrote. “Many iPod owners have never bought anything from the iTunes Store. Some have bought hundreds of songs. Some have bought thousands. At the 2004 Macworld Expo, Steve revealed that one customer had bought $29,500 worth of music.”

[Jessterw]

I'm not sure how anyone could disagree. The problem is that Jobs took averaged statistics and used them to generalize, which in relation to the point he was trying to make probably didn't seem like a big deal (to him), but it's now taking focus away from the very point he was attempting illustrate. He knew what he was doing, and so he's rightfully getting called on it.

Regardless, I still feel the overall point is a valid one: there is far more non-DRM music on the average iPod than there is music purchased from the iTunes Store. To further repeat myself, anyone who is spending any large sum of money (and time) building a music or movie collection via the store knows full well the implications of doing so. It's consensual lock-in.

I still find it amusing that detractors of the iTunes Store have used like statistical averages to claim the store is a failure. Which, granted, is neither here nor there in regards to this.

One thing is for sure, it's certainly generating a lot of hype, which is something I'm sure Jobs was expecting.

[Technoid]

Steve Jobs: The Master of The Reality Distortion Field

[Tjalfe]

Interesting reply:

http://www.theinquirer.net/default.aspx?article=37522

DEAR MR JOBS, you are the lowest form of hypocrite. It didn't dawn on me when I was reading your recent piece on DRM, nor when I was writing my response, but it did afterwards.

I was busy answering emails generated by my article, a strangely complimentary set of letters given the topic, when it dawned on me. Your entire business is based on DRM, top to bottom, and without it you would wither and die.

If you consider Apple has three product lines, the Mac, the iPod and the upcoming iPhone, all are DRMed to the gills. The iPod we all know about, that one is obvious. The Mac is a little more subtle, the DRM prevents it from running on anything but your hardware. It will even break on an Intel reference board that is almost totally identical to yours.

DRM has two functions, to prevent copying and to prevent interoperability. You are using the the latter functionality as a shield to fatten your margins and totally lock out competition. Your entire computer business model depends on DRM. Remove the artificial locks and it works fine.

Then there is the iPhone. Those of us privvy to its secrets know it is locked down hard, you have even saidas much. This DRM infection starts with a trusted boot loader and will fail with non-signed firmware. From there, you can lock out any competition with more DRM. This was a management decision, not a technical need.

So, when it comes to DRM being used to pry open your anti-competitive infrastructure, you decry it. When it comes to you using to to exclude and tax others, then it is mandatory. What a joke you are.

While I know this won't happen, here is what you need to do to put your money where your mouth is. First, completely open up or license OSX to anyone who wants it and let it run on whatever hardware they want. Second, do not lock down the iPhone in any way shape or form. Both can be done on a whim, there are no technical impediments, only management decisions.

If you do not do these things, you will expose yourself to be the true hypocrite that everyone thinks you are. DRM is unacceptable when used against you, but the best thing in the world when done by Apple. You can change things though, all it takes is a memo.

Charlie Demerjian µ