Thursday, February 08, 2007

Catching Up II: Tech talk

So for a few weeks now we've been hearing rumours that the major music labels have come around and are considering releasing their songs as DRM-free MP3s. These would still be sold legally and be protected by copyright law, but the technical measures that offend users would be gone. As a bonus, the labels wouldn't have Steve Jobs' boot on their necks over the Fairplay DRM issues.

Freedom to Tinker raises one interesting point: the labels have spent a decade screeching about how necessary DRMed music is to protect copyright. Empirically false, but that didn't stop the labels from screeching it.
The industry will find these views particularly inconvenient when it is ready to sell MP3s. Having long argued that customers can’t be trusted with MP3s, the industry will have to ask the same customers to use MP3s responsibly. Having argued that DRM is necessary to its business — to the point of asking Congress for DRM mandates — it will now have to ask artists and investors to accept DRM-free sales.

All of this will make the industry’s wrong turn toward DRM look even worse than it already does. Had the industry embraced the Internet early and added MP3 sales to its already DRM-free CDA (Compact Disc Audio format) sales, they would not have reached this sad point. Now, they have to overcome history, their own pride, and years of their own rhetoric.
I want to come back to this issue later, but for now it's interesting to see how this is playing out. Perhaps in response to the persistent rumours, Steve Jobs released a letter where he outlined 3 possible futures for the Internet music industry:
  • 1) Status Quo, cont. Each competing firm (Apple, MSFT, etc.) tries to control the market for music and music players, top to bottom. Jobs unsurprisingly claims this system is working just fine, and can continue ad infinitum.

  • 2) Fairplay becomes the standard. Apple licenses it's proprietary DRM to all comers, probably because of legal intervention such as that being contemplated in Norway as we speak. Jobs no likee. He claims -- with a straight face, apparently -- that if Apple is forced to license Fairplay DRM widely, the security will be broken. Apparently, Jobs is a blithering idiot. Fairplay tracks have an average "secure" lifespan of minutes before they're cracked and re-distributed sans DRM.

  • 3) DRM-free music for all! Jobs says he prefers this possible future to all others. It's hard not to read this as Jobs attempting to call the labels' bluff. The labels want Internet music sales -- finally, they've accepted that they can't break the Internet -- but don't want Apple to control them. Jobs is saying fine, but if I can't control them neither can Bill Gates, or Sony, or whoever.
Of course, both Jobs and the labels know the obvious -- the vast majority of digital music ever sold has been sold DRM-free on CDs. The labels have done just fine with Internet and real-world sales despite the ridiculous ease with which CDs can be ripped and shared with friends.

Nevertheless, the labels have responded to Jobs' letter, and you can just guess which one of Jobs' options they prefer:
LOS ANGELES (AP) -- A recording industry group fired back Wednesday at Apple Inc. CEO Steve Jobs, suggesting his company should open up its anti-piracy technology to its rivals instead of urging major record labels to strip copying restrictions from music sold online.

Mitch Bainwol, chairman and chief executive of the Recording Industry Association of America, said the move would eliminate technology hurdles that now prevent fans from playing songs bought at Apple's iTunes Music Store on devices other than the company's iPod.
But it's this part that shows us what business really wants -- where they want the industry to go:
"Eliminating online DRM appears to us to be an overly risky move that eliminates the potential for a future digital-only distribution model free of piracy," Deutsche Bank analyst Doug Mitchelson wrote in a research note.

Jobs could have just as easily lectured the software industry, which includes Apple, for its unwillingness to pursue an industrywide DRM standard or work to make media players recognize and not play pirated songs, Mitchelson wrote.
The only way Mitchelson could get his wish would be to abandon every existing standard of music file, make a new standard that contained some kind of digital watermark from the labels and then have new-model players reject any and all files without that standard. And even then, it simply wouldn't work.

All this in pursuit of a market where piracy doesn't exist -- a fantasy world that never existed and never will.

I think the industry will eventually move towards DRM-free tracks unless they're able to compel Apple to license Fairplay (a fight I don't think they can win.) So what happens when the labels make DRM-free tracks available and Ragnarok stubbornly refuses to arrive?

More specifically: What happens to the movie industry -- which is DRMed top to bottom, far more intrusively than Apple -- when DRM becomes discredited in the marketplace even more than it already is?

Can we convince Hollywood studios to abandon DRM on DVDs and Hi-def DVDs, and allow the market to actually function properly? The iPod, after all, would never, ever have arrived if music were as tightly controlled as digital video is. It's a good thing to allow the market to function, at least so business always tells us.

Color me skeptical.


Hamilton Lovecraft said...

You write [Jobs] claims -- with a straight face, apparently -- that if Apple is forced to license Fairplay DRM widely, the security will be broken. Apparently, Jobs is a blithering idiot. Fairplay tracks have an average "secure" lifespan of minutes before they're cracked and re-distributed sans DRM.

That's not what he's actually saying, though. He was being very precise in saying, not that Apple was successful in maintaining a secure system, but that Apple was successful in meeting the labels' requirements in responding to the inevitable security breaches, a process that requires near-constant "fire drill" responses under time pressure.

If Fairplay was widely licensed, the different implementations would all have to be updated together under the same time pressure, or the whole thing gets shut down, with devastating effect viz. income prediction, stock price, etc. Conducting these fire drills is a big task for Apple as it is, and coordinating it with other companies would make eventual failure of the process all too likely.

john said...

Well, first off I have to question the claim that it couldn't be implemented with other parties -- if Fairplay has to be upgraded/patched/whatever, Apple is still in a position to do so quickly. If another store/manufacturer doesn't upgrade quickly, that doesn't effect Apple so long as Apple tends to it's own store and hardware. Any agreement Apple makes to license Fairplay would obviously reflect that -- unless Apple's legal dept. is asleep at the switch.

And Jobs certainly implies that Fairplay is secure, though you're free to read statements like this more generously:

"While we have had a few [!!!] breaches in FairPlay, we have been able to successfully repair them..."