January 22, 2008

Apple Is Failing To Deliver On Its DRM-Free Promises

With all the hoopla surrounding Steve Jobs ability to secure all the major movie studios for iTunes at MacWorld, there was something that has in my mind been very much overlooked – where is all that DRM-free music we were promised?

It’s almost been a year now since Steve Jobs famously wrote his manifesto against DRM-encoded music and posted it on Apple’s website. A couple months later we had EMI being the first label to get on board with Apple to offer DRM-free tracks on iTunes (dubbed “iTunes Plus”). A month after that, at the All Thing Digital conference, Steve Jobs told Walt Mossberg on stage that by the end of the year half of all the tracks on iTunes would be DRM-free; things seemed to be moving fast.

Yet looking around iTunes tonight, I’m not seeing very many DRM-free tracks at all. It’s 2008, did I miss something? This is compounded by the fact that every single album I think about purchasing on iTunes, I hop over to AmazonMP3 and find the same album there – in DRM-free MP3 format of a higher quality – and for a dollar cheaper no less. Ball -> Dropped?

While it was a truly great coup to score all of the major movie studios for the iTunes Movie Rental Store, Apple should not be neglecting its bread-and-butter iTunes Music Store in the process. Apple, Amazon is really starting to take you to school here. They have a ton more DRM-free tracks (from all the major labels in fact), and they are cheaper than your DRM-laced tracks – what more needs to be said?

Industry leadership and market dominance can fall away if not tended to. It’s time to get serious about the iTunes Music Store again. Remember the manifesto.

More thoughts:

Posted at 2:24 am by MG Siegler
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  • Anonymous
    I thought the remaining big record labels were refusing to sell DRM-free music on iTunes right now to deliberately give Amazon a chance to catch up to Apple and even the playing the field a bit.
  • Anonymous
    No kidding, it's not just Apple's decision. I think it's clear from Jobs' statements that he wants to go DRM-free. Now it's up to the actual owners of the content.
  • Anonymous
    "Apple is Failing to Deliver....."? Huh? It's Apple's fault the record labels won't allow them to sell DRM-free music? You must be using some pretty strange logic to come to that conclusion.


    The wiser amongst us see what is really going on. The record companies are putting the screws to Apple by allowing others to sell DRM-free music in hopes Apple will relent on their inflexible pricing.



    Even though Apple, by creating the only successful, legal downloading service, saved their industry, the record companies are looking to punish them.
  • Anonymous
    Apple is just refusing to sell DRM-free despite what Jobs wrote because it wants to allow Amazon to sell it for cheaper, so that everyone can go over there and buy it, so that the iTunes Store can fold up and die. Yup, that's it.


    The labels have no say in this at all - they have to offer their DRM-free music to all sellers. And Apple just absolutely refuses to put it in the Store because they owe it to EMI. Yup, that's it.



    Apple really is this insane!!!
  • sirmarcos
    Indeed, as the others have said - the non-EMI labels appear to be not allowing iTunes to sell DRM-free music out of spite. Or, to prop up Amazon.


    Ironically, Apple does not care - most people don't even know what DRM is - let alone that it's bad, and Amazon mp3s play just fine on the millions of ipods out there. The money is in the hardware, not the songs after all.
  • fog city dave
    Seriously, are you this obtuse, or are you just purposefully spinning this to make Apple look like the bad guys to draw hits? Here's a quote from the New York Times: "A senior executive at another record company, who requested anonymity out of concern about irritating Mr. Jobs, said he was prepared to keep copy restrictions on his label’s songs on iTunes for six months to a year while Amazon establishes itself."
  • star
    Are you dense or something!!?? Or are you just spreading FUD?? Probably the latter, if you are able to set up a site like this. It's obvious that you know better. You're counting on other stupid people to read this and think "you're on to something..." LOL!


    Check with the RIAA on that and see what they say. Then check with Amazon.com and ask them why the "labels" seem intent on getting them all over their first... Then maybe you'll get some real answers...
  • MG Siegler
    @everyone - wow, I've been called an apple fanboy, now i've incurred the wrath of the fanboys. Yes, I OBVIOUSLY know it is the labels who are refusing to sell DRM-free on iTunes, but that doesn't mean Apple should just give up on the cause - that is ridiculous. Newsflash: I don't care who you are, not everything is always going to be handed to you.


    Just because they are in the market leading position doesn't mean that everyone just has to flock to them and bend to their will without any compromise. Apple made that mistake last year with the movie studios and the movie store failed to take off - now as we saw a couple weeks ago they made concessions to the studios, and the studios made concessions to them - and boom, a deal is in place.



    While it's true that Apple could do absolutely nothing for a few years and still likely maintain their lead in the market, when Steve Jobs himself promises that half of all music on iTunes will be DRM-free by the end of 2007 - and fails to deliver, questions will naturally begin to arise as to why Apple didn't meet the promise.



    Again assuming that everyone will bend to your demands because you are in a dominant position is a dangerous position to take. It didn't work for the music industry, it hasn't worked for NBC (against Apple), and it won't work long term for Apple.



    Amazon offers a better product at a cheaper price. Maybe it's because of unfairness on behalf of the labels, but that doesn't mean Apple can just sit back and do nothing about it.
  • Bruno Dexter
    What exactly is Apple supposed to do? If media company "U" says we're not letting you sell DRM free music, then Apple's choice is to sell what they can or not sell anything.
    Maybe what you would like is for Apple to fork over a portion of their hardware revenue to every single media company which decides to pull on Apple's short hairs?

    Or maybe you'd like Apple to break contractual agreements and sell unprotected media without the permission of the coywright holder?

    As long as you are pleased then to hell with business convention or realities.

    I'm surprised you haven't blamed the writer';s strike on Apple. After all, to dump on Apple brings on the page hits.
  • MG Siegler
    @bruno - see comment above and any of my hundreds of others pieces on Apple. I'm not dumping on Apple just to dump on them, and no, the pageviews are not really all that great except from you guys getting all worked up. You'd think I wrote about Ron Paul or something.


    I appreciate all the comments, but lets all take a deep breath. The point of the article is that Jobs promised massive amounts of DRM-free music and failed to deliver. That is simply a fact. I don't think it's unreasonable to question Apple's role in failing to fulfill their promise.
  • Anonymous
    I'm sorry when you're wrong just admit it. Don't try to spin it & start using the weak cop out; wrath of the fanboys nonsense. You're analysis is wrong. just admit it. Steve Jobs talked about why DRM makes no sense...he didn't promise to deliver it. That's up to the record companies.
  • Anonymous
    So, as bruno said, can you tell us what exactly should Apple do to compromise with the music labels?


    The labels claimed they wanted flexibility in pricing, which everyone knows meant they wanted to sell their top hits for more. However, they're selling their top hits DRM-free for less over at Amazon. So that must not be it.



    The labels claimed that in some instances they wanted to sell complete albums intact - no singles. Okay, so Apple just won't carry those albums, as has happened from the beginning. What's the big deal.



    What else are the labels asking for? How else should Apple compromise? Jobs expected the EMI results to show the labels that DRM-free would sell more. This has probably happened, but the holdout labels are fulfilling their own agenda to build up a competitor, namely Amazon. When Amazon is sufficiently strong, they can play Amazon off against Apple, and get back in the driver's seat for pricing and such. The days of 89 cents songs will not be around long after that. What should Apple do? Complain to the Attorney General?



    Tell us.
  • I'm blackout
    Look at it from an economic perspective. There is little incentive for Apple to push the boundaries on DRM.


    The average consumer doesn't really know that they can't play their music on other devices--because they don't have other devices! They don't know that they can only burn it to 7 CDs--because they don't burn that many CDs!



    They won't know the limitation until they consider switching to a non-Apple product.



    So long as the consumers blame the music companies for Apple's lack of DRM, Apple will continue to benefit. More people will buy DRMed music and get more and more locked into Apple products.



    If consumer sentiment changes to blaming Apple, you'd better believe Apple will respond with more DRM-free music.



    From an execution point of view, Jobs failed on his promise. From a strategic point of view, this is a great success. Jobs has shifted blame from Apple to the Music companies.



    Amazon has a better end product (higher quality, cheaper, DRM-free MP3s)... but they don't have the end-to-end experience as simple as iTunes. Until this changes, Apple can keep DRM-less music on a back burner... and overlook Jobs' memo... which essentially says, "hey, it's not our fault"... when, if you think about it, it probably is.



    ... but what do I know... I'm blackout.
  • MG Siegler
    @anon - "Half of all the songs on iTunes will be available on iTunes Plus by the end of the year" that is a quote directly from Steve Jobs, you can watch the video of it if you'd like. That is the basis of the post and the stated fact that has not been met.


    @anon2 - there are almost limitless ideas for what Apple could do to negotiate - the point is that they should not be above negotiating, which appears to be the stance Apple all too often takes.



    You mention the selling of complete albums - that was actually exactly what Radiohead demanded at one point with iTunes and the reason none of their albums were there. You may notice that Radiohead came to iTunes a few weeks ago, clearly both sides were able to negotiate some arrangement - exactly as I said they should at the time.



    I don't like the record labels just as much as many of you, but that doesn't mean Apple should not negotiate with them to get deals done - again, just as they did with the movie studios.



    @blackout - good to hear a different perspective. some very good points.
  • Ruhayat
    I agree with Mr Blackout. It's all been just a yet another sensationalist marketing ploy from the master of marketing. When Jobs made his speech/letter, he was simply shifting the blame away from Apple to the music companies, probably thinking that the companies wouldn't be bold enough to call his bluff.


    But they did.



    Unfortunately, before everyone can see the Emperor's underwear, he shifts the blame again. And as you can see from the first few responses here, the masses have swallowed the bait hook, line and sinker.



    People have made the argument that iTunes is not a money-spinner for Apple so whether or not they sell DRM-free music doesn't hurt Apple's bottomline. Actually, it does, only not directly. The iTunes Store forms a symbiotic link with the iPod and is the secret recipe that keeps iPod sales high. If you remove that vital ingredient, then the iPod becomes just another music device, and it becomes easier for people to walk away.
  • Anonymous
    As an attorney for a record label I can tell you with absolute certainty, Steve Jobs has no leverage to use against the labels. It is our content and if we choose to protect our IP with DRM that is the way to go.
    For the life of me, I cannot understand why people don't just get a subscription to a music service. It's a few bucks a month and you have access to pretty much everything.

    Don't listen to Apple, the smart deal is to go anywhere else.
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