Has Steve Jobs killed DRM?

Well, well, well. Less than two months after his "Thoughts on Music" open letter to the music industry, the cracks in the record companies' DRM obsession have started to appear. If anyone doubted that Apple were one of the biggest players in the music biz, they should soon be changing their tune.

A quote from Jobs:

"Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat. If the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM-free music on our iTunes store. Every iPod ever made will play this DRM-free music." (Emphasis added)

DRM has been criticized from many angles, but the meat of it is that DRM confuses and angers honest paying customers. Apple's Fairplay is one of the less noxious schemes out there, but even that places restrictions on where and how you can listen to music you have paid for.

DRM is supposed to foil pirates, but the pirates are huge organizations operating in other countries (China's estimated market for illegal music was US$400 million last year). They have no trouble cracking DRM. In fact, the easiest way is to go buy a CD, which remain protection-free and offers the highest quality sound.

EMI made noises earlier this year about selling music unencumbered by Rights Management but then went quiet (although going quiet seems to be compulsory when dealing with Apple). They made test releases of vanilla MP3s, including Norah Jones' "Thinking About You". This is a big step for the very conservative music companies, and the anouncement has already drawn anonymous fire from rivals:

"It's problematic," said one executive. "EMI haven't tested it enough so they don't know what the market reaction is going to be to open MP3s." [Reuters]

So will DRM be dropped by the other Big Three. Who knows? What is sure is that EMI will sell a lot more digital music now and piracy will not increase (it may even go down as people switch away from P2P sharing). The others will be watching closely. I expect at least one of Sony BMG, Universal or Warner to do the same thing pretty soon.

Press Release [EMI]