Steve Jobs Hates DRM, It’s Official

Steve Jobs speaks and everyone listens right? Well to some degree yes, once again he’s set [stolen] the agenda by writing an open letter claiming Apple want the majors to drop DRM. Unlike my colleague David Card I think Jobs doth protest too much. I’m still of the belief that Apple have deployed DRM in the way in which they have in order to lock in consumers. By way of evidence see Apple’s successful rebuttal of France’s Virgin Mega’s legal challenge to be able to sell in AAC / Fairplay. Behind the scenes many other European retailers and services got similarly short shrift.

I actually think this is more about European politics than anything else. With this open letter Jobs has positioned himself as a champion of DRM-free and placed the blame fairly and squarely with the major record labels. Since France’s parliament first forced the issue last year I have been telling journalists that the irony of the situation is that DRM was forced upon Apple by the major labels, of whom three are EU owned. (An irony which Jobs highlights in the letter).

So now that Jobs has laid out his ideological store Apple will have both a better defence against EU groups and a better positioning among the Apple hard core aficionados, who (as influencers) will ultimately trickle down the message to the masses via blogs etc. (And of course mass media coverage of the letter will help).

Apple can see that the legislative tide is turning in Europe. To US readers it might seem strange to be so concerned about consumer group actions in little markets like Norway which have just 4 million inhabitants. But this is all about precedents and other markets following suit. Come the summer Apple could find itself in the untenable situation of ticking off an increasing number of markets where it could no longer sell digital music. How long would it be before the big European markets and the US would ultimately follow suit? Of course Apple would have some very strong legal counter arguments (e.g. why doesn’t this apply to games consoles?) but the whole process would ultimately hurt iPod sales. Which is what Apple is of course all about in the digital music sphere.

So Jobs et al have taken a strategic decision that now is the time that they can do better without DRM than with. I completely agree with Card that Apple’s priority is selling iPods and that they would happily drop DRM to help that strategy. But Apple have readily utilised DRM as a retention tool to date, it’s just that now events and market conditions have combined to make DRM less key.

Also, Apple’s deal with Apple Corps may mean that the iTMS DRM debate is actually much less important to Apple. If pre-loading iPods becomes their key distribution tool, then iTMS would become a less important part of the equation.

Finally, Jupiter has a report on this issue currently with our editorial department, so Jupiter clients look out for it. The findings show a surprisingly strong level of support for dropping DRM…