Apple Does About Face on Music Copy Protection

Apple CEO Steve Jobs, in a letter posted on the company’s website, has called on the largest music companies to license their music for distribution without digital anti-piracy protection. See the New York Times’ take on Apple’s move below the fold:

Published: February 7, 2007

The chief executive of Apple Inc., Steven P. Jobs, is calling on the four largest music companies to license their music for distribution without digital anti-piracy protection, shifting away from a nearly four-year-old philosophy that helped steer the iPod music player to worldwide success.

Mr. Jobs’s appeal, expressed Tuesday in a letter posted on Apple’s Web site, arrives as the company, whose iPod dominates MP3 player sales, faces a slew of lawsuits in Europe over so-called digital rights management. France, Sweden and Germany are among the countries that have accused Apple of hurting customers by locking rival players out of its iTunes service.

It is a striking move for Mr. Jobs and for Apple, whose resurgence as a dominant technology company was built on the success of the iPod and iTunes. Introduced in 2003 as the iTunes Music Store, the service charges users 99 cents to download songs from the major labels. Its promise of copyright protection, called FairPlay, helped persuade the four major labels — the EMI Group, Universal, Sony BMG and the Warner Music Group — to allow online sales.

Consumers took to the system in droves, letting Apple capture nearly 75 percent of the portable music player market.

For the first quarter, Apple reported $1 billion in profit, stemming largely from sales of 21 million iPods. Customers have downloaded more than two billion songs from the iTunes store.

Since then, several other providers have devised their own proprietary systems. Microsoft first created its PlaysForSure system, used by a variety of music player makers. But as that system failed to dent iPod sales, the company then turned to its own digital-rights management system for its Zune player last year.

Yet the second-largest online music store, eMusic.com, does not use digital rights management. It heralded its 100 millionth download late last year. Though the store features songs from major artists and what the service claims is 13,000 music labels worldwide, it has not signed agreements with the major music labels.

In his letter, Mr. Jobs outlined three avenues for the future of digital music. One is maintaining the status quo, in which he said customers are “well served” by a variety of choices in players and stores.

Another would see Apple licensing its FairPlay system to other manufacturers, allowing other players to play iTunes songs and vice versa. But he said that system would only complicate enforcement of digital rights management, as myriad companies would have to coordinate software and hardware updates.

Finally, labels could shed digital rights management altogether. Mr. Jobs pointed out that the vast majority of music bought today — only 10 percent of all music sold last year was through an online store — has no copyright protections and freely allows consumers to copy music to their computers. Attaching digital rights management to music bought online has only limited the number of online music stores, he wrote.

“This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat,” he wrote.

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