Worm In The iTune Apple

iTunes Second GenerationBad idea, bad timing, what really is behind the prompting of Apple’s CEO Steve Jobs letter to the Record Industry.  In February, Steve Jobs posted an open letter to the Recording Industry against the continued used of DRM (Digital Rights Management) software for online music downloads.  What will be the ripple affect of the Jobs comments, or is this just the worm in the apple? 

Steve Jobs, co-founder of Apple, wrote an open letter to the music industry right after the Grammy’s asking for open DMR (Digital Management Rights), the software in iTunes and on iPods that limits your ability to transfer music between devices.  iTune accounts for 80% of all online music sales. Jobs’ proposal requested Music label companies to let users download tracks without digital rights management (DRM) antipiracy protection.  Jobs criticized the labels — Warner, EMI, Sony and Universal — for demanding DRM on music sold online at the same time that they sell billions of CDs containing unprotected tracks. if the music companies are selling over 90% of their music DRM-free, what benefits do they get from selling the remaining small percentage of their music encumbered with a DRM system. Warner Music CEO Edgar Bronfman rejected Steve Jobs’ suggestion earlier this week that the major music label companies should abandon digital tunes copy protection.

Reasons for Jobs comments:

  1. No DRM means no lawsuits
  2. If DRM remains Apple owns the standard
  3. Apple’s critical mass makes the anti-DRM argument low risk
  4. The music industry is ready to go without DRM
  5. The Record Industry is already formatting and distributing music in mp3 formats
  6. The Record Industry is trying to do an end run around and out of the iTunes formatted contracts and Apple wants to make sure they are at the table as not to loose Internet download market supremacy

 Is it a matter of the Record Industry can’t keep up with the changing pace of technology?  In the early days of FM radio, the Record Industry complained about music being copied to reel-to-reel tape, people still bought albums.  With the advent of the cassette and 8 track recorders, the Record Industry complained and even got Congress to place a special tax on blank tapes, people still bought albums, and sales volumes hit new highs.  The same things happened with CDs’, DVDs’ and mp3 recorders, the Record Industry complained piracy and copyright infringement, special taxes were applied to blank recording media, but people still bought albums, and sales volumes hit new highs. Lessons Learned:

  • The more people listen to music, the more music will be purchased
  • Individuals will take advantage of technology to have their favorite music readily available, accessible and portable
  • DMR may be the worm in the iTune – Apple, but Steve Jobs is preparing for the next harvest




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