Why iTunes Isn't DRM Free -- Simple Licenses, or Maybe the iPhone

In response to the question why El Jobso doesn't already sell unprotected songs through iTunes, Jon Lech Johansen, the DVD hacker who is trying to license a crack of Apple's FairPlay copy protection system to other companies, says it's not a technical issue. A simple software patch to iTunes would allow Apple to sell unprotected songs in a couple of days.

Apple itself isn't talking. Randall Stross, reporting for the New York Times, asked this same question last month, but got nowhere. "I asked the company last week whether it would offer tracks without copy protection if the publisher did not insist on it: the Apple spokesman took my query and never got back to me."

Some interesting speculation comes from a reader called Jet Tredmont, who in the comments to yesterday's post, says it's a licensing issue:

"This is all very simple. Steve Jobs got a great deal worked out amongst the thousands of record companies worldwide with a very straightforward tactic: one contract, one set of terms, take it or leave it.

Apple didn't negotiate terms on a company-by-company, artist-by-artist, or even song-by-song basis. There is one contract, and if you want into the largest music store in the world, you sign. Period.

"One contract" is a much more powerful dictum than "two contracts", or "three contracts" or "eleventy-seven contracts". If there was one DRM contract and one non-DRM contract, the approach would not have worked.

At the same time, keeping the single contract simplicity helps Jobs push for industry-wide reform. I suspect that twelve to twenty-four months down the road the vast majority of record companies will have agreed to drop DRM. Now, what of the stragglers? Again: one contract. If you require DRM at that point still, then you can not play in the largest store in the world.

Period.

Simplicity is a great thing in business negotiations, as much or moreso than in the consumer market."

Edvarcl Heng, CNet Asia's "Audio Arsonist" columnist, says it's about selling tunes via Wi-Fi to the iPhone:

"One possible upshot (of removing DRM from online music) could be that it will throw a wrench into the carefully crafted over-the-air (OTA) DRM environment favored by cellular operators and music labels. Without encumbering DRM, cellular users may come to favor Apple's solution rather than the cellular operators' which typically locks music tracks into the phone itself. That could be a reason the iPhone has a Wi-Fi connection instead of 3G.

If the iPhone takes off, and there is a strong likelihood it will, this could allow Apple to continue its stranglehold on the online music space without paying toll charges to network operators. Indeed, as Sakeem Mobhani, COO for Bollywood content aggregator Hangama Mobile India, noted at the Music Matters Asia Pacific music forum last year, revenue sharing will become an issue between the content provider and the network operator. Who deserves a larger slice of the pie and how large would it be? By bypassing the networks, iTMS can retain a bigger share of the profits."

Maybe it's a business tactic to kill subscription models. As John Gruber at Daring Fireball notes, no DRM means no subscription music services:

"The whole point of a subscription service is that while you’re paying, you can download all the music you want, but when you stop paying, all the music you’ve already downloaded stops working. That requires DRM."