Command, Option, Control

Monday, 12 February 2007

Two asinine criticisms of Steve Jobs’s “Thoughts on Music” are that (a) it’s a shameless attempt to jump on the anti-DRM bandwagon — i.e. that Jobs and Apple are merely attempting to take credit for the already inevitable move toward non-DRM music; and (b) that it’s all just some sort of trick and Jobs didn’t mean what he wrote.

Paul Thurrott starts with the (a) route:

There are times when Apple and its CEO Steve Jobs seem well ahead of the curve, releasing products and services that easily trump anything the competition is doing. And then there are times when Apple is a follower, though the company tries, in such cases, to pretend that it is leading the way. This is an example of the latter case. …

Jobs’ pleas follow years of complaints from analysts, music fans, and an increasing number of industry executives, all of whom have noted that DRM restrictions have stymied online music sales. Of course, when someone with the clout of Steve Jobs makes a stand, it’s interesting, even if we’ve heard these arguments before.

Who exactly, then, is Apple following? Yes, there have long been outspoken critics of DRM. Yes, there have long been some publishers and music stores selling unencumbered DRM-free downloadable audio files. eMusic, for example, sells plain-jane MP3 files, and they are the second-most-popular music download store (although they trail iTunes by more than an order of magnitude — 100 million vs. 2 billion total downloads to date).

But, clearly, what Jobs was writing about wasn’t just music downloads in general, but, rather, music downloads from artists belonging to the four major music companies. (And for better or for worse, this comprises the vast majority of music that most people care or even know about.) There have been stutter steps in this direction from the Big Four — EMI has released a handful of DRM-free tracks through Yahoo’s (Windows-only) music store — but Jobs’s essay is the first time anyone with a vested interest in the status quo has unequivocally stated it would be better for everyone if we just got rid of DRM.

It’s one thing when a peace activist calls for an end to nuclear weapon testing; it’s something else when the leader of a country that has nuclear weapons does so.

Thurrott stretches reason to its limits in his conclusion:

Regardless of the timing, Apple will always claim that it led the way to unfettered music downloads, of course. And though the company knows that record companies will never bow to this kind of pressure, Apple can also claim it’s been looking out for the interests of consumers all along. If that’s really true, I’ll just reiterate a request I’ve been making for a long time now. Mr. Jobs, tear down that DRM wall: License FairPlay, seek a license to Microsoft’s Windows Media technologies, and make all of these products interoperate in the world as it is, even if it’s not as perfect as the one you allegedly prefer.

Remember the RIAA’s response to Jobs’s essay, where they misread Jobs’s clear statement that Apple has rejected the idea of licensing FairPlay as an offer to license FairPlay? Thurrott takes it even further, suggesting not only that Apple license FairPlay to other companies, but that Apple “seek” (read: “pay for”) a license to Microsoft’s Windows Media DRM.

This is, yes, a remarkably laughable suggestion. But it raises a genuinely intriguing question: How could Thurrott be so wrong?

My guess is that a very simple explanation suffices, which is that Thurrott is starting with a significant but utterly broken assumption: That Microsoft matters in this debate.

It’s easy to see how Thurrott might start with this assumption. He’s a Windows expert; covering and analyzing Microsoft technologies is what he does. And, for most of the last two decades, Microsoft’s opinion and technology has seemingly been important just because they’re Microsoft. If that’s the assumption you start with regarding DRM, then Thurrott’s suggestion actually makes some sort of sense.

But Microsoft is a paper tiger in this realm. Their music DRM is only relevant to anyone who has bought one of their music players — which is to say a decided minority of the market. Their Windows monopoly has not allowed them to establish a de facto industry standard here, like it has so many times in the past. The most popular DRM-encoded music format for Windows users is FairPlay; the most popular music player for Windows users is the iPod.

Microsoft’s response to Jobs’s essay conveys this frustration at their lack of relevance. Zune marketing director Jason Reindorp told The New York Times that Jobs’s call for the elimination of music DRM was “irresponsible, or at the very least naïve”, and then added, “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.” Thurrott quotes Reindorp approvingly, writing, “Microsoft responded to Jobs’ pronouncement in a fashion that I feel is long overdue.”

But what exactly is “naïve” about Jobs’s essay?¹ I posit that what Reindorp considers naïve is that Jobs didn’t even bother mentioning Windows Media DRM except in passing. We’re Microsoft, damn it! Why isn’t Apple scared of us?

Too much Microsoft on the brain can lead you to view Apple — or any other company — through Redmond-tinted glasses. Microsoft’s history is rife with instances of lock-in as an important technical goal and core business strategy, often to their legal detriment. Or in Microsoft’s own parlance: embrace, extend, extinguish.

That’s never been Apple’s strategy. Apple’s defining corporate desires are maximizing their control while minimizing their dependencies. If the tables were turned and Microsoft’s and Apple’s positions were reversed regarding music DRM market share, we certainly wouldn’t have seen a “We’d be better off if we just got rid of music DRM” open letter from Steve Ballmer.

But it does make sense from Apple’s perspective. One of the implicit points in Jobs’s “Thoughts on Music” is that if Apple’s going to support any DRM, it’s going to be their own, and they’re not going to share it with anyone else.

That way the user experience and technology are under Apple’s control, and Apple is not dependent on the cooperation or competence of any other companies to make it work and keep it working. One glaringly obvious problem with Thurrott’s suggestion that Apple license Windows Media DRM from Microsoft is that Microsoft has never offered decent support for Windows Media — and none at all for DRM — on the Mac.

If the iPod and iTunes were to support Windows Media DRM, there would need to be Mac OS X support for Windows Media DRM. And the number of PlaysForSure music stores that support the Mac is zero. Zero. Maybe this makes sense in Paul Thurrott’s world, where he thinks the introduction of the iPhone implies “the beginning of a long farewell to the Mac as a general purpose computing platform”, but in the real world, the idea that Apple would take the iPod/iTunes platform — which is currently completely independent of Microsoft’s control — and make part of it not work on the Mac and put the Windows part under Microsoft’s control, is a joke.

The truth is that the only companies that have a say in this are the Big Four music companies and Apple; the music companies because they control the rights to the music, Apple because they dominate both the legal download and portable music player markets. (That eMusic is the second-most-popular download store means several good things for Apple: (a) both of the top two download stores fully support iTunes and iPod playback on both Mac and Windows; (b) neither of them use Microsoft technology; and (c) because eMusic only sells songs from independent labels, it means Apple’s share of the legal download market for major label music is even higher than its share of the overall legal download market.)

For Apple to heed Thurrott’s suggestion that they license Windows Media DRM from Microsoft would require Apple to forget that if you depend on Microsoft for something, Microsoft won’t hesitate to abuse you with that dependency if it later suits them. Apple’s delayed support for iTunes on Windows Vista is giving Microsoft a sweet taste of their own medicine. (Sweet for the rest of us, at least.)

As it stands now, Apple depends on no one but itself for music and video playback in iTunes, iPods, Mac OS X, and new gadgets like the iPhone. And, by not licensing FairPlay to others, Apple isn’t dependent on any other companies to roll out firmware updates for bug fixes and format changes. This is just the way Apple wants it.

What’s interesting is that Microsoft could have started this months ago. What if the Zune had come out DRM-free — as a music player and online store that made Cory Doctorow happy? And then used the lack of DRM as an advertising point against the iPod? That would have been worth far more than squirting in terms of publicity and grassroots support.

I doubt this was ever even considered. Microsoft is so hell-bent on switching places with Apple — so that they control an overwhelming DRM lock-in advantage — that they’re missing out on the fact that Apple is offering to relinquish its own (actual, existing) DRM lock-in advantage. I.e. Microsoft’s problem with the iTunes Store isn’t that it has created an unfair playing field, but rather that it has prevented Microsoft from creating an unfair playing field tilted in its own favor.

If Apple succeeds in persuading the Big Four to drop DRM, that would seemingly be good news for the Zune, but it would keep Microsoft from what it really wants, which is a long-term self-perpetuating DRM lock-in advantage.

Which brings us to the most deliciously jackassed aspect of Thurrott’s call for Apple to voluntarily bridge the DRM gap, which is that Microsoft is so DRM-happy that they don’t even offer cross-support between their own DRM standards. Zunes don’t work with PlaysForSure DRM and PlaysForSure gadgets don’t work with Zune DRM.

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Next up is Paul Kedrosky, who published an op-ed piece in The Wall Street Journal Saturday, titled “Pardon My Skepticism”. Kedrosky writes:

That Microsoft-style lock-in to iTunes/iPod has been good for Apple and its shareholders — the company sold more than 20 million iPods in the Christmas quarter — but others have been less impressed. First up has been Norway (an admittedly tiny market), which last month gave Apple until March 1 to explain how it would untangle iTunes and iPod and open up the music market. Similar complaints have now come from groups in France, Germany and the Netherlands.

Enter Mr. Jobs with this week’s anti-DRM essay. We’re less than a month from when Mr. Jobs needed to respond to European complaints, so he seemingly had a deathbed conversion. Let’s open it all up, he says, eliminating DRM altogether.

But Jobs didn’t argue for music to be opened up only in Norway. He called for it to be opened everywhere. Apple’s hand has not been forced here: If they wanted to tell Norway to stuff it, they could take the Norwegian iTunes Store down and suffer no consequences. The iTunes Store is only meagerly profitable, at best, worldwide. Apple’s iTunes Store profits from Norway are almost certainly negligible.

Why is it so hard to believe Jobs meant what he wrote: that Apple is perfectly happy to make its money selling iPods and by competing based on the quality of their products and user experience?

Kedrosky continues:

First Mr. Jobs notes that it is the record companies that made him impose DRM on iTunes downloadable music. True enough, but that’s hardly the point. Being ordered to do something objectionable is not an excuse — and, further, Mr. Jobs hasn’t exactly had the high rhetorical ground here, not having fought the good fight on this subject publicly in the past.

It is true that Apple, and Jobs personally, have heretofore not sung the praises of DRM-free legal music downloads. But what was Apple’s option? Not to offer legal downloads from the major record companies at all? If Apple had refused to use any DRM whatsoever, that’s what they’d have been left with. What business sense would that have made?

And few serious people in the security community buy the argument that Apple is really just making the music industry safe for all of us by keeping its FairPlay technology to itself.

That’s not what Jobs argued at all. He didn’t say that Apple keeping FairPlay to itself helped protect the music industry. In fact, he explicitly pointed out the opposite, that DRM in general has had no effect on music piracy whatsoever, because 90 percent of music ships on DRM-free CDs. What Jobs argued is that keeping FairPlay to itself protects Apple, because Apple’s contracts with the music companies guarantee that when FairPlay is cracked, Apple must patch the hole within a few weeks.

Further, if the recording industry could copy-protect CD music, it would. But the industry is prevented from doing so by a massive installed base of CD players that don’t support such technology.

That’s true — and in fact the music companies have tried all sorts of various tricks to ship CDs that play in regular CD players but which prevent PCs from ripping the music to digital files. Remember Sony’s root kit fiasco? That the music industry sees DRM-free CDs as a problem is not an indictment of Apple.

Besides, if copy protection in general, and FairPlay in particular, are so fundamental to Mr. Jobs’s lock-in and current music-media hegemony, this raises an obvious question: Why would he argue in favor of eliminating DRM altogether? It starts to seem … well, nuts.

It’s only nuts if you assume that lock-in is fundamental to Apple’s “music-media hegemony”. I say that it isn’t. Imagine for the sake of argument that the iTunes Store were instead just a front-end to Amazon; buying music or movies through iTunes would simply be a convenient way to order CDs and DVDs without leaving iTunes. I posit that in this scenario, Apple would have sold and would continue to sell just as many iPods as it has with the actual iTunes Store.²

It is, of course, a straight-out-of-Clausewitz exercise in diversionary tactics. While many people are uneasy about beating up on the successful and innovative Apple, gang-tackling the nasty old music companies is something everyone can really get behind.

The reason the music companies are unpopular is that their actions and stated policies make people unhappy. The reason Apple is popular is that its actions and stated policies (including Jobs’s “Thoughts on Music”) make people happy. This is not complicated. That Kedrosky is apparently siding with the music companies instead of Apple doesn’t make him an iconoclast; it makes him a jackass.

(Likewise, Microsoft’s deep institutional devotion to DRM is not about making their customers happy; it’s about making the entertainment industry happy even though it makes customers unhappy.)

And Mr. Jobs knows that there is pretty much zero chance the music industry will eliminate DRM. That move would sound a death ringtone for their struggling business, making online piracy dead simple and destroy the livelihood of an entire generation of artists.

Kedrosky has clearly missed — or refuses to believe — the main point of Jobs’s argument. It’s almost impossible to see how allowing Apple to sell DRM-free music through iTunes would make piracy worse. Music piracy is already rampant. There is not a single song on iTunes that can’t be downloaded for free from a P2P network. If iTunes were to switch to DRM-free music, would it stop anyone who is already buying music from iTunes? No.

And, more importantly, are there people who have refused to buy songs from iTunes because the songs are encoded with DRM? Yes!

People who are already buying from iTunes would continue to. People who refused to buy from iTunes because of DRM might start. And people who bootleg would continue to bootleg. This situation would be better for the music industry, not worse. The problem from the music industry’s perspective is their technically ludicrous pipe dream of devising a scheme that forces everyone to pay for every single song they play. They obsess over pirates while taking their honest customers for granted.