Steve Jobs recently made a headline-grabbing public plea to the entertainment industry to abandon copy protection for multimedia content. He is urging the industry to give up the search for a workable Digital Rights Management (DRM) solution by making a case that:
- DRM doesn't work and is criminalising millions of people who are ripping CDs they bought legitimately, or downloading content from both legit and dubious sources on the Internet.
- DRM retards the growth of the entertainment industry, as proven by the fact that iTunes music sales are the only growth engine of the music business today.
- 90% of music is sold unprotected anyway in the form of CDs, so what's the difference?
Abolishing DRM sounds like a simple (albeit radical) solution, which appeals to our inner hippie and also casts Jobs in his favourite role: taking the side of "the people" vs the big bad corporations. But this is quite disingenuous coming from the man who perfected the art of technology lock-in with a string of innovations over the years (iMac + OS X + Life Apps; iPod + iTunes; iPhone closed to third-party apps). [Disclosure: I have an iMac at home and I love it.]
[open sidebar] Jobs' argument reminds me of the debate regarding pharmaceutical patents. The tempting case is made that developing countries should be allowed to flout existing patents and produce cheap generics for the world's poor. The ultimate objective is non-controversial. But this approach kills the profit motive and ultimately the incentive to develop new drugs. The same objective can be achieved by using direct government (or private -- see the Gates Foundation's efforts) subsidies to buy drugs at market and subsidise them for the poor. And this approach retains -- even increases -- the incentive for pharmaceutical companies to develop the drugs the poor most need. [close sidebar]
Similarly, quality multimedia content costs money to produce. In the case of music, for example, it costs a lot of money, most of which is spent on artists whose records never recoup their investment. That is the risk taken by record companies. Quality content will only be produced if it can make money for its producers. The more efficient the commercialisation, the higher the economic returns, the more producers will enter the market -- all this is good news for consumers, who get more choice and lower prices.
Free content will quickly become garbage content. This is already evident in the 95%+ garbage soaking up gigabytes on Google's YouTube server farms. Achieving interoperability of DRM systems is not a technical problem; it is primarily a political one. The industry has made progress in this regard and it can complete the process.
If the result is an accepted set of DRM standards and a competitive market for DRM technologies, then most of Steve Jobs' stated goals for the benefit of consumers will be met. But not perhaps in the time frame he would like: Jobs is in a hurry to boost the music/video market, maybe because he needs to prop up iPod sales in 2008, when analysts predict slowing sales growth.
Consumers value what they pay for and are usually happy to pay for what they value. $0.99 per song makes a compelling marketing slogan, but it is undoubtedly more efficient (and fair) if I can choose to spend $0.09 to listen to a song once, $0.49 to get it on my iPod, or $1.29 to transfer it to any one of my devices. Especially if in each case the level of quality is assured.
A functioning DRM system can create huge distribution efficiencies and help grow the premium content market by a factor of ten. The best way to reach more consumers is to enable device interoperability, microchunking of content and micro-billing. All these require a set of DRM standards and technologies. Steve Jobs has a great genius for blending technology, design and useability -- as such he can be a positive driver for interoperable DRM.
Steve, why don't you call a summit with Steve Ballmer and Bob Iger and Howard Stringer and Sumner Redstone, et al, and make this happen? This is the way you can free content.