[Ecommerce] [Fwd: Re: [ipr] Jobs Calls for End to Music Copy Protection]

Wed Feb 7 07:56:07 2007



Job's essay 'Thoughts on Music' mentioned in the below NYT article can
be found here: http://www.apple.com/hotnews/thoughtsonmusic/

Jerzy Celichowski wrote:
> Jobs Calls for End to Music Copy Protection
>
> http://www.nytimes.com/2007/02/07/technology/07music.html?_r=3D1&th&emc=
=3Dth&oref=3Dslogin
>
> Article Tools Sponsored By
> By JOHN MARKOFF
> Published: February 7, 2007
>
> SAN FRANCISCO, Feb. 6 =E2=80=94 Steven P. Jobs, Apple=E2=80=99s chief exe=
cutive,
jolted the record industry on Tuesday by calling on its largest
companies to allow online music sales unfettered by antipiracy software.
>
> Should record labels shed digital rights management?
>
> The move is a gamble for Apple. Its iPod players and iTunes Store have
defined the online music market, and they have much at stake in the
current copy-protection system.
>
> Under terms reached with the major record labels, online music stores
embed software code into the digital song files they sell to restrict
the ability to copy them. Because Apple uses its own system, the songs
it sells can be played only on the iPod. That limitation has drawn
increasing scrutiny from European governments, pressure that Apple has
recently begun to acknowledge.
>
> Mr. Jobs=E2=80=99s appeal, posted on the company=E2=80=99s Web site Tuesd=
ay, came in
the form of an essay titled =E2=80=9CThoughts on Music,=E2=80=9D but in ess=
ence it
was a letter to the =E2=80=9CBig 4=E2=80=9D music companies: Universal, Son=
y BMG,
Warner and EMI.
>
> While he said that =E2=80=9Ccustomers are being well served=E2=80=9D by t=
he current
approach to digital rights management =E2=80=94 with online music retailers
using incompatible antipiracy systems but nonetheless offering =E2=80=9Ca w=
ide
variety of choices=E2=80=9D =E2=80=94 the subtext clearly pointed to the pr=
ospect of
change.
>
> He dismissed one possible alternative, in which Apple would license its
own system, FairPlay, allowing competing digital players to play iTunes
songs and letting other stores sell copy-protected music for the iPod.
Mr. Jobs said that approach would only complicate enforcement of digital
rights management, as myriad companies would have to coordinate software
and hardware updates.
>
> Instead, he proposed that labels could shed digital rights management
altogether. Mr. Jobs pointed out that only 10 percent of all music sold
last year was through an online store and that music is already easily
loaded onto digital players from CDs, with no antipiracy features.
Attaching digital rights management to music bought online has only
limited the number of online music stores, he wrote.
>
> =E2=80=9CThis is clearly the best alternative for consumers, and Apple wo=
uld
embrace it in a heartbeat,=E2=80=9D he wrote.
>
> Mr. Jobs=E2=80=99s move comes as the music industry appears to be facing =
a
crisis. Sales of its mainstay product =E2=80=94 the album =E2=80=94 continu=
e to
sink, and sales of digital music, including individual songs, have not
increased fast enough to offset the decline.
>
> With a paucity of hit releases to start the year, industrywide album
sales are already down more than 15 percent from last year, the worst
January performance since computerized sales tracking began in 1991.
>
> At a forum in France last month, Rob Glaser, chief executive of
RealNetworks, which operates the Rhapsody digital music service,
predicted the widespread availability of unrestricted digital music
within a few years. He said it was =E2=80=9Can idea in ascendance and whose
time has come.=E2=80=9D
>
> But Mr. Jobs is clearly the most powerful voice raised so far in support
of a change. With the clout built on his company=E2=80=99s market share for
both players and music, he has already prevailed against the labels in
disputes over pricing.
>
> Facing pressure to bolster digital sales, the four major music companies
have only toyed with the idea of selling unprotected files =E2=80=94 most
notably with a personalized version of a Jessica Simpson song and the
first single from the new album of Norah Jones. MySpace, the
social-networking giant that is host to pages for countless independent
and major-label acts, has embraced the unrestricted MP3 format for
artists who choose to sell music there.
>
> More recently, the industry has been abuzz with rumors that one or more
of the major companies is preparing to lift restrictions on some
portions of their digital catalog.
>
> Jeanne Meyer, a spokeswoman for EMI, said, =E2=80=9CThe lack of
interoperability between a proliferating range of digital platforms and
devices is increasingly becoming a real issue for music consumers.=E2=80=9D
>
> The Universal Music Group, the Warner Music Group and Sony BMG Music
Entertainment declined to comment. But several industry executives said
they viewed Mr. Jobs=E2=80=99s comments as an effort to deflect blame from
Apple and onto the record companies for the incompatibility of various
digital music devices and services.
>
> There is a general sense that the industry is still unwilling to do away
completely with copy protection, and no contracts have been signed yet
to change the systems of distribution by any of the players.
>
> A senior executive at one company, who requested anonymity to avoid
straining relations with Apple, said that while labels might experiment
with other forms of copy-protection software, =E2=80=9Cwe=E2=80=99re not go=
ing to
broadly license our content for unprotected digital distribution.=E2=80=9D
>
> Another digital music industry executive said that the record companies
=E2=80=94 many of them part of larger media companies involved in movie and
television production =E2=80=94 were concerned that lifting restrictions on
digital music might have perilous effects on the parallel market for
copy-protected video content.
>
> Several consumer electronics and music industry executives said that if
the music industry moved away from copy protection, it could potentially
make it easier for competing music players. Mr. Jobs seems to be betting
that anything that stimulates the sale of digital music can only help
his company.
>
> =E2=80=9CIt=E2=80=99s a bold move on his part,=E2=80=9D said Ted Cohen, m=
anaging partner
of TAG Strategic, an industry consultancy; he is also former senior vice
president for digital development and distribution for EMI Music. =E2=80=9C=
If
anything can play on anything, it=E2=80=99s a clear win for the consumer
electronics device world, but a potential disaster for the content
companies.=E2=80=9D
>
> The global music trade group, the International Federation for the
Phonographic Industry, based in London, has long pushed for
=E2=80=9Cinteroperability,=E2=80=9D saying Apple should license its digital
management system so that iTunes music plays on devices other than the
iPod. But the industry has also stuck with the idea of some kind of
digital control to prevent wholesale copying of musical tracks.
>
> Officially, the industry chose to respond Tuesday by seizing on one idea
that Mr. Jobs raised =E2=80=94 licensing Apple=E2=80=99s own copy-protectio=
n system
=E2=80=94 even though he went on to reject it. =E2=80=9CApple=E2=80=99s off=
er to license
FairPlay to other technology companies is a welcome breakthrough and
would be a real victory for fans, artists and labels,=E2=80=9D the Recordin=
g
Industry Association of America said.
>
> Mr. Jobs=E2=80=99s statement drew criticism from some competitors, who ar=
gued
that he was simply trying to get in front of a shift in industry
strategy and claim credit for it.
>
> Jason Reindorp, marketing director for Zune at Microsoft, said Mr.
Jobs=E2=80=99s call for unrestricted music sales was =E2=80=9Cirresponsible=
, or at
the very least na=C3=AFve,=E2=80=9D adding, =E2=80=9CIt=E2=80=99s like he=
=E2=80=99s on top of the
mountain making pronouncements, while we=E2=80=99re here on the ground work=
ing
with the industry to make it happen.=E2=80=9D
>
> =E2=80=9CHe=E2=80=99s certainly a master of the obvious,=E2=80=9D Mr. Rei=
ndorp said,
adding that =E2=80=9Cthe stars were already aligning=E2=80=9D to loosen the
restrictions.
>
> In Norway last month, after a yearlong investigation, the government=E2=
=80=99s
consumer ombudsman ruled that iTunes violates national law by
restricting playback to iPods. The government gave Apple until Oct. 1 to
make changes.
>
> Consumer agencies in six other European countries are looking into the
legality of limiting how legally purchased songs can be played.
>
> Late last month, as consumer groups across the region began banding
together, Apple issued a statement that said, =E2=80=9CApple hopes that
European governments will encourage a competitive environment that
allows innovation to thrive, protects intellectual property and allows
consumers to decide which products are successful.=E2=80=9D
>
> In 2005, France lobbed the first legislative volley in the European
effort to fight digital restrictions, but by the time the law was
adopted last summer, most of the teeth were gone from the proposal. Now,
the French are putting together a government commission that will rule
on the legality of digital rights restrictions case by case.
>
> Jeff Leeds contributed reporting from Los Angeles, Victoria Shannon from
Paris and Michael J. de la Merced from New York.
>
>
>
>

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