12 Feb. 2007
SETI League
PriUPS Project

Steve Jobs & The Mystery of the Missing Point

Nobody has accused me of excessive alacrity, and the timing of this blogitem won't promote such a notion.  Steve Jobs dropped his three-point DRM (Digital Rights Management) bombshell almost a week ago, and it has garnered headlines and commentary from all quarters.  I'm weighing in a bit late.  And a bit, as Apple would put it, "different."

The fundamental issue of DRM is "piracy" or what in a less emotionally charged atmosphere might be called "theft" or "copyright violation."  (I don't wear an eye patch when I download music, although with the current freezing weather I definitely have shivering timbers.)  Record companies want to sell you their music.  Many people want it for free.  DRM is a way to help keep honest people from getting it for free, which in turn means the record companies can derive incremental income from un-stolen music.  Steve Jobs wrote an essay, perhaps in rebuttal to the growing complaints that songs sold by iTunes won't play on competitors equipment, or perhaps just ex cathedra, since he is Steve Jobs.  He discussed three points in his essay.

Rather than re-over-analyze Jobs thoughts on this before getting to my own take on it, I'll simply copy an email exchange I had last week with a friend:

The arguments for lack of interoperability are disingenuous crap.
The arguments against DRM are also disingenuous, but inevitable.
> what chu think?

That was fast!  Of course Apple can license their system or allow interoperability if they want to.  They don't.  And, of course DRM will resolve itself eventually; the current "system" is just stupid.  So I thought I would pontificate about a point that Jobs doesn't cover, and why it's important.

The DRM Conundrum

Consider the record companies for a moment.  They, as do the airlines, have a terrible "business model."  Ever since the demise of the vinyl LP record with its occasionally stunning cover art, they have been selling a product, the CD, that nobody wants, and worse, now nobody needs.  I don't know anyone who is interested in the physical manifestation of the music they listen to.  All my CDs have been transferred to computer disks, and the things the record company thinks they're selling are in boxes and crates, hopefully never to be seen again.  There are any number of "solutions" sold to reduce the space taken up by CD jewel boxes by putting their contents in thin envelopes or whatever.  The record companies should, and perhaps finally do, realize that they are not in the "record" business, but are rather in the "enjoyment of music" business.  They perform the entirely valid process of discovering good musicians, helping them create music that they believe would be enjoyed by a large audience, and alerting the audience to the existence of this music.  All of value to the audience and the musicians alike.  But then they idiotically try to get recompense by forcing people to put little plastic disks in larger plastic cases in their homes.  What are they thinking?

Consider the music fan for a moment.  Our desired "consumption model" is a very simple one.  We want to listen to what we want, when we want, as often as we want, wherever we want.  It would also be nice if we didn't have to pay anyone or anything, but I think that we are realistic enough to understand that, if nobody paid anything, the musicians would starve or embark on a life of crime, perhaps by working for a credit card company.

The Subscription Model

What then, is a "business model" that will provide money for record companies and musicians while giving the music consumer what he wants?  Oddly enough, it's one that already exists and seems to be at least modestly successful:  Subscription music streaming.  The consumer gives a relatively modest amount to one of the services, e.g., Yahoo (which I use) or a competitor such as Napster or Rhapsody (RealNetworks) which gives him the right to listen to any song in the catalog at any time and as often as desired, as long as the subscription is current.  You can look at it as a "music tax" and not be too wrong.  There are two flaws, though.  The critical one is that "the catalog" isn't complete, or even nearly so.  I want "every song ever recorded" and so would anyone else.  The second is that a lot of people don't like not "owning" music.  I've given up arguing this point; people feel emotional about it and I would, too, if I hadn't gotten over it shortly after starting a subscription.  The economic fact is that the cost of subscribing is akin to buying a small handful of CDs per year.  And you "own" the music as long as you pay.  If you don't like music at least that much, you're not interested in this argument at all. 

What about the musicians and the record companies?  Right now you pay about the same for a CD you love and listen to frequently (Hello, "Jupiter's Darling") and for one you buy because you heard a song on the radio but end up hating every song except for the one on the radio that you've simply become tired of.  Who deserves more of your limited time and custom?  The companies running subscription services can (and perhaps do, and probably should) report how often each selection is played.  They can aggregate, and distribute royalty revenue based on actual plays rather than "purchases" or downloads.  Looks like the "jukebox model" may be the best after all this time!

The Jobs Lacuna

Back to Steve Jobs' points:  What does he say about DRM and the subscription model?  Why, nothing at all!  Not a word!  And Apple's iTunes doesn't offer a subscription, only "ownership."  Jobs suggests that the record companies dump DRM entirely, which makes perfect sense if everybody buys individual tracks, but may not make a lot of sense for subscriptions since then one could get an unlimited collection of music without continuing to pay for the subscription.  Is it possible that Jobs didn't think about this?  Or think of offering a subscription?  Well, I suppose it's possible, but I do believe he's a clever lad.  Not necessarily forthcoming, but definitely clever. 

All this would be moot if, in fact, there were a "music tax."  But there are good objections to that and in fact there are people who don't like music who could legitimately argue that they shouldn't have to pay it.  How about a "deaf deduction" on your IRS form?  However there is a good technological solution and I think it will be with us surprisingly soon.  If you accept the "anything / anytime / anywhere" premise for consumers, along with the "musicians and record companies should get paid for 'enjoyment of music'" premise, then the whole solution to the problem is this:

  • The large record companies should set up their own combined internet/wireless network that, together, would have "every record ever made" available for instant streaming or download.  They would keep track of how often each selection is played and pass a portion of the revenue to the musician* and keep some for themselves.

  • Independent record companies and musicians would provide their music to the system as well, and get paid on the same "how often played" as the "signed" artists.  They would even get a larger percentage payment but of course would have to do their own promotion and forfeit the services they would otherwise expect from the big labels.

  • Manufacturers such as Apple could add wireless capabilities to the iPod or other products.  Instead of being a storehouse of downloaded music, they would act as caches for the record companies' wireless servers to reduce network loading.  They could still compete with better displays, user interfaces, and decorator colors as they do now.

  • Consumers could buy the gadget of their choice, and pay a subscription fee to the consolidated music purveyer.  They could hear or play whatever they care to at no incremental cost, and the provider would divvy up the subscription fee based on the consumer play preferences.

  • Theft would be largely eliminated since it would serve no purpose if you get everything you want without it.

See how simple it is?  Why have we been arguing about "piracy" for over a decade?

* Of course, "musician" is a collective term for all involved in creating the song.  Wendy Waldman would get her cut for writing it, too.  I am very eager for Wendy to avoid starvation.  She's really good.

Additional DRM blogitems:  If Music Grew on Trees and DR Madness and the Sacred Waveform.  I don't promise consistency, and I don't promise to stop.

NP:  "Catapult" - Counting Crows

Richard Factor

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