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Music Execs Say Apple's DRM Hurting Industry
Posted by
Zonk
on Thu Mar 01, 2007 01:56 PM
from the reference-the-pot-and-the-kettle's-similar-color-here dept.
from the reference-the-pot-and-the-kettle's-similar-color-here dept.
EMB Numbers writes "C-Net says last year saw a 131 percent jump in digital sales, but overall the industry still saw about a 4 percent decline in revenue. Some executives at this week's Digital Music Forum East conference lashed out at Jobs, blaming Apple and its CEO for their troubles. The impression at the conference was that Jobs' call three weeks ago for DRM-free music was anything but sincere. As the article puts it, 'Apple has maintained a stranglehold on the digital music industry by locking up iTunes music with DRM ... and "it's causing everybody else who is participating in the marketplace — the other service providers, the labels, the users — a lot of pain. If they could simply open it up, everybody would love them.""
Related Stories
[+]
News: Jobs Favors DRM-Free Music Distribution 755 comments
Another anonymous reader tips an essay by Steve Jobs on the Apple site about DRM, iTunes, and the iPod. Perhaps it was prompted by the uncomfortable pressure the EU has been putting on Apple to open up the iPod. Jobs places the blame for the existence and continuing reliance on DRM squarely on the music companies. Quoting: "Much of the concern over DRM systems has arisen in European countries. Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free. For Europeans, two and a half of the big four music companies are located right in their backyard. The largest, Universal, is 100% owned by Vivendi, a French company. EMI is a British company, and Sony BMG is 50% owned by Bertelsmann, a German company. Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly."
[+]
IT: Macrovision Responds to Steve Jobs on DRM 221 comments
An anonymous reader writes "Macrovision Corporation, best known for its long history of DRM implementations, (everything from VCRs to software copy protection), has responded to Steve Jobs open letter regarding DRM. With ample experience and despite the obvious vested interests, it's great to hear their point of view. In the letter they acknowledge the 'difficult challenges' of implementing DRM that is truly 'interoperable and open'. At the same time they also feel that DRM 'will increase electronic distribution', if implemented properly, because 'DRM increases not decreases consumer value', such as by enabling people to rent content at a lower price than ownership, and lowering risks for content producers. While I'm impressed they responded, I can't say I'm impressed by lofty goals that might not be reached for years. The reality is, current DRM implementations often leave users with the bad end of the deal. What do you think? Should people give DRM manufacturers more time to overcome the challenges and get it right?"
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Bullshit (Score:5, Insightful)
Apple has already laid down its cards. "Open" DRM (can there be such a thing?[2]) is just as bad as any other DRM. It does not serve the customer.
The labels are hurting the industry with DRM. Apple is willing to ditch it wholesale (i.e., isn't interested in iTunes/iPod "lock-in").
The ball's in the music industry's court, not Apple's.
[1] Arguments about whether or not there would have been an iTunes store in the first place aside. There is one now, and online music has made a good showing. It's up to the industry to decide how to proceed, not Apple. Simply changing the face of DRM isn't a "step in the right direction."
[2] Yes, I know what they mean by "open" DRM. But who's it open to? Only other competitive music stores? So we can have one universal DRM "standard"? Aside from the massive technical hurdles to coalescing DRM with all the disparate formats and stores, is that really the right step to take?
Re:Bullshit (Score:5, Interesting)
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WHY apple DRM is GOOD for you and BAD for industry (Score:5, Insightful)
Imagine apple opened up it's DRM to other stores. Now Sony goes to store B, C and D, which are rivals, and says we'll let the first one of you agree to our new rules have exclusive access toour top artists. Namely we want you will charge $7.99 and bundle them in sets of 5. No more singles and no more $1 songs.
Well duh, one of them will Kowtow. And it won't be apple which will sputter along trying to enforce the $1-single song rule.
Thus the only thing keeping the status quo which we all like ($1 songs and ability to buy singles) is apple's exclusive control of it's DRM. The moment that vanishes the Music INdustry has us in its claws.
So pray that apple does not open it's DRM to other stores.
Now on the flip side if all music is sold without DRM, well then there's another enformcement mechanism. If the music industry charges too much and forces song bubdling too much then Gnapster like trading services make a comeback, made all the easier by the lack of DRM on a much large song base.
So Jobs I think was right, but for different reasons than he stated. The most consumer freindly situation is that DRM be apple only or not at all. Apple is a good watch dog in this case because they profit from keeping song prices and tersm consumer freindly since that favors iPod sales as long as there is DRM. Second, they make a good watchdog because they are not threatened if DRM entirely vanishes. THe only thing threatening them is if the Music industry starts dictating higher prices and bundling songs because that will move sales off to crappy user unfreindly sites and diminsh the appeal of the ipod.
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Re:WHY apple DRM is GOOD for you and BAD for indus (Score:4, Insightful)
It's better now to have the power not rest with the RIAA and try to force the end of DRM rather than give them back everything they need to retain full control over the market.
Does Apple have a monopoly on music? Maybe online music, and while I'd argue they don't, it's not straightforward.
Does the RIAA have a monopoly on music? Absolutely. They control almost all music in every sphere of commerce except online sales, where Apple has the upper hand.
Should we give them more power over online sales? Well, given their history of trying to force price increases (variable pricing on iTunes) and extorting money for players sold ($1 per Zune) it's hard to see that giving them even more power is a good thing.
I agree with the other poster - having Apple control FairPlay completely gives them a bigger wedge to open the RIAA up for dropping DRM. Once DRM is gone, the power shifts away from Apple, but not to the RIAA. It goes to all the music stores, who can now compete fairly against the iTunes Music Store and sell songs for the iPod. This would seem against Apple's interests, until you think about the cost of adding DRM to each track, maintaining DRM systems and all that.
Steve Jobs is right in my opinion - the options are no DRM, or all DRM and we've seen that all DRM isn't working. Licencing destroys the ability to bargain.
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Re: (Score:3, Interesting)
Re:Bullshit (Score:4, Insightful)
Actually Apple is 100% interested in the iTunes/iPod lock in. Jobs is saying, "hey if the music industry does something they'd never do in a million years, so will I!"
It's great PR to say it and it's unlikely to come to fruition, so why not say it? Jobs and Apple are not nearly that benevolent.
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Re:Bullshit (Score:5, Insightful)
Sure.
Jobs said it would get rid of DRM in a heartbeat on all media on the iTunes Music Store. I believe that to be true.
Further, I think Apple believes that it would actually be in a better position without DRM than with in terms of sales volume and customer satisfaction.
Long before the iTunes Store existed, the iPod was already the best selling music player. That's because it didn't suck, not because people were "locked in" to iTunes. In another way, you could argue that even before the store, you still got the most benefit from iPod by using it in conjunction with iTunes.
So in some respects I agree that Apple definitely encourages people to use its products and the "ecosystems" that go along with them (iLife, iTunes Store, and so on), but Jobs doesn't feel that DRM is good for the industry as a whole, and indeed only hurts and confuses honest consumers, in addition to never stopping piracy, since it will always be able to be defeated.
So, to expand on this a bit, would Apple be happy if it lost customers? No. But I believe Apple thinks the iTunes/iPod combo is so compelling to most ordinary consumers that they'd get even more customers without DRM. Apple doesn't need DRM to keep people on iTunes and iPod.
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Re:Bullshit (Score:5, Insightful)
in other words...
with DRM: apple gets a big share of the pie
without DRM: apple gets a slightly smaller share (debatable) of a much bigger pie
apple has huge market share because their products are better than everyone else's, not because consumers are locked into itunes. i don't think ditching DRM would hurt apple at all.
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Re:Bullshit (Score:4, Insightful)
without DRM: apple gets a slightly smaller share (debatable) of a much bigger pie
Just to add to that...
With "open" DRM (multiple music stores using Apple's DRM):
apple gets a slightly smaller share (debatable) of the same pie.
Having apple open their DRM to other music stores does nothing to benefit apple, and very little to benefit customers. Choice is good, but unless another store is going to be able to signficantly beat apple's price or selection (and it's the music industry that ultimately sets this, not the store), what's the point? Some people might decide to buy from a different store when Microsoft bundles their next browser with it, but it'll do little to actually grow things. All it will do is hurt apple.
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Re:Bullshit (Score:5, Insightful)
I think you've nailed it.
I try not to take anything Steve Jobs says at face value. That whole RDF thing. I am impressed by his business acumen, but I don't see him as a straight-talker.
I think the reason Jobs is willing to be very openly anti-DRM now is that he does not see Apple's DRM lock-in business model lasting much longer due to intense legal pressure in various regions (France, etc.). It looks like rather than fight an MS-style battle to the end to protect its lock-in model, Apple plans to suck it up and nimbly move to the next stage in the digital music business cycle, which involves smaller share of a bigger market. It should be clear to observers now that Apple isn't all that interested in market share- they are interested in profit (and superior design).
So, Apple sees that it's locked-in days are numbered, and that non-proprietary DRM doesn't help it's bottom line. The only remaining option is removing DRM and pushing to expand the total market. This option also just happens to provide Jobs with the opportunity to be a hero to the masses for publicly panning DRM, which has a not-insignificant impact on Apple's brand- Apple is just that much more cooler now.
So, kudos to Mr. Jobs. I think he's taken his current stance with Apple's bottom line in mind, but in this case it just happens to coincide with the best interest of Apple's customers. Nicely done.
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Re:the lord of lockin (Score:4, Insightful)
1) before iTMS Apple had that iTunes Rip-Mix-Burn ad campaign that got the RIAA in such a tizzy. they are never happy. that ad was about making mix CDs with your own content. it wasn't download-mix-burn.
2) the iPod was huge BEFORE iTMS existed, so don't blame the store for people buying iPods
3) the iPod can play most any DRM-free music, as can the other popular music players. they can sell non-DRM music and everyone can play!
4) supposedly *most* iPod owners still do not acquire content from iTMS, and the heavy buyers are really heavy buyers. the bulk of users (in terms of a head count) buy some singles here and there. therefore most are not locked into the iPod platform. i have personally spent maybe $5 at iTMS, the rest i rip from my CDs. i could take that $5 loss in stride if i changed teams.
what about people that were previously "locked in" to 8-tracks? they got no compensation from the industry for buying a format that died off....
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Re:the lord of lockin (Score:5, Insightful)
It's like they are insisting on having at least three deadbolt locks on their back door of their house, while they have no plans to even install a lock on the front door.
People who want to scatter their content to the four winds can already do so by getting a CD and ripping it.
Therefore, DRM on the iTMS files protects absolutely nothing.
The only effect it is having is that it hurts on-line sales, because DRM-encrypted files have less value than those on CD.
If I were a cynical person, I would suspect that this was their agenda all along. But since I'm not *cough*, I have no explanation for their position.
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Re: (Score:3, Interesting)
If iTunes opens up to non-DRM (AAC) stuff, iPods w
Re:Bullshit (Score:5, Insightful)
They do make some money from downloads from iTunes, but not a whole lot. Best estimates are consistently coming in at about $.04 a track.
Yippee.
What the labels are REALLY pissed about here is there's a medium that's successful and popular and growing over which they have little control. They subverted the radio long ago by Payola and it's more sophisticated successors, and MTV became irrelevant the minute they stopped showing videos.
What they just can't seem to grasp is the iTunes is the least of their worries. Once more and more bands become popular via MySpace and the like and home recording gets better and better, the label's usefulness to a band will get smaller and smaller. They should be more worried about acts like Bare Naked Ladies taking their music to the web: That will hurt them more than Apple ever did.
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Re:Bullshit (Score:5, Insightful)
http://slashdot.org/comments.pl?sid=222358&cid=18
In short, I think the conspiracy theories that Jobs only said he was against DRM for PR reasons and to look good are utter bullshit. Jobs' statement on DRM is the single biggest shot across the bow of DRM that anyone anywhere near this industry has taken, ever. From the CEO of the company with the largest online music store, no less. From a board member of a major motion picture house, no less.
This isn't just lip service. This is huge, and that's why all the DRM and music industry types have been reacting to it so vocally and aversely since it was made. Apple doesn't need DRM to keep people on iTunes and iPod. People get iPods because they don't utterly suck. Jobs also (likely correctly) feels that the entire online music industry - of which iTunes is a huge part - would be MUCH better off without DRM.
In fact, if it's true that online sales would explode if you could actually get lossless, no-DRM versions of music and media online, as so many staunch anti-DRM advocates argue, then it's true that Apple's business would significantly grow, as the existing market leader in this area. I know that people want to think that Jobs was just lying for PR's sake and really secretly wants to hold onto DRM as tightly as it can, but that simply doesn't stand up to logical scrutiny, considering the scope and impact of this statement. Further, iPods - which is where Apple makes its money - were already the market leader by far before the iTunes store even existed.
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Re:Bullshit (Score:4, Informative)
Oh wait, he doesn't.
Oh wait, it's not that simple, and I already answered those concerns in the very post to which you replied:
http://slashdot.org/comments.pl?sid=222358&cid=18
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Re:Bullshit (Score:4, Insightful)
Lets look at the users first: there are those who won't have the capacity to 'get it' (the concept of DRM) and they will be using their iPod so it won't matter if it's DRMed or not. Then there are those who aren't using an iPod, this group of people is smart enough to know what DRM is and what it means about what they are buying. Oh, but wait then there will be songs they can play on their (non-iPod) player from iTunes but others that they want to buy but cannot play because they are DRMed. Now they will start complaining to Apple with the argument "how come I can get this song without DRM but not this one, please make it not have DRM". The who argument about 'confusing users' is utter bull crap. It won't confuse users. Apple just doesn't want to deal with users complaining to them. This has been the case with Apple for a long time.
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Re:Bullshit (Score:5, Informative)
It's not bullshit or a PR stunt. Besides, now that he posted his comments, he can't back down. How is that bullshit?
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Re:Bullshit (Score:5, Insightful)
Microsoft delivers what they want first and foremost. They deliver it how they want it. These products "work" in the most basic sense, and detereorate over time. They are excessively complicated, confusing, and require more than a layman's knowledge to properly repair.
People make fun of Jobs and his Reality Distortion Field quite often. I'd posit that many of the people who do so are, like myself, technical types who are "in the know". We know how to use computers, even build them, and an easy to use interface and end-to-end experience aren't as important to use when installing complicated distrubutions of Linux is second hand to us.
However, for the vast majority of people who use Apple products that simplicity and ease of use is absolutely everything. Computers are hideously complicated compared to type writers and calculators. They are magical black boxes which perplex and baffle non-techies young and old. To have availible something that removes vast amounts of that complexity is valuable.
Jobs not only delivers, but has excellent delivery. His public appearances are masterfully executed, in both speech and presentation. Despite being a techie, he comes off as an artist and a dreamer. These are two things the layman can relate to.
Perhaps he is sneakier than Bill Gates, but I'd argue that this isn't hard to achieve. If even Microsoft's "fanbois" admit Bill is full of it, how sneaky can he really be?
For all intents and purposes, Steve Jobs has put his very reputation on the line with his statement. He's even put Apple on the line. To retract his statement would be a crushing blow to the Apple/Jobs mystique. It would be, in effect, to affirm what you claim. Apple would no longer be above other companies, they would simply be another giant spinning words at every turn in vain damage control attempts. Jobs has fully committed Apple by his statement, either to a DRMless future or to irrelevance.
If the "fanbois" are blind, it is because Apple has built up trust over the years. This doesn't mean Apple is flawless or perfect, but is instead genuine.
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Re:Bullshit (Score:5, Insightful)
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It's like a Far Side Cartoon (Score:5, Funny)
Correction (Score:5, Funny)
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Re:Correction (Score:5, Insightful)
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Re:It's like an episode of 24 (Score:5, Funny)
Cohen then proceeded to shackle his brother to a chair and ordered a subordinate to inject 8 units of pain serum, all the while screaming "WE DON'T WANT TO DO THIS. JUST TELL US WHERE THE MONEY IS."
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Math... duh...? (Score:5, Insightful)
CD sales fell 23 percent worldwide between 2000 and 2006.
Last year saw a 131 percent jump in digital sales
overall the industry still saw about a 4 percent decline in revenue.
So CD sales... down... (a lot)
Digital music sales
Overall down... ( a little)
Blame Jobs!
Brilliant!
What color is the sky in their world?
Re:Math... duh...? (Score:5, Interesting)
Fewer albums released -> lower sales -> less income
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Moo (Score:5, Insightful)
Apple not at fault (Score:5, Insightful)
As I understand it, Apple is the technological source of this DRM in question, but not the muscle that pushes for its incorporation into the files. If Disney wants DRM on its digital downloadable movies as a provision for Apple to sell them, then it's Disney that is failing to "open up." If Apple refuses to put DRM on their products, then I'd guess they wouldn't have those products to sell.
Re: (Score:3, Insightful)
If I could mod this up I would. I can't at the moment, though, so instead I'll confirm that this is a reason at least
iTunes is not the problem, but the result. (Score:5, Insightful)
Re:iTunes is not the problem, but the result. (Score:5, Insightful)
Now iTunes/Apple is a monopoly - the music companies can only get their product distributed profitably through a single channel online. They're seeing the writing on the wall - and the choice is open up or get squeezed by the monopoly.
Hell, they can't even sell their OWN music on their on website because... it's not compatible with iPod!!! And even if they could - the marketplace is Apple iTunes, pure and simple. The purported 4 cent per-song "Apple tax" is so low, that they couldn't even compete fairly with their own distributor because the scale of operations would be money-loosing.
I don't think anybody saw this reaming coming...
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So who wants it then? (Score:5, Insightful)
I say someone needs to call the bluff.
Re:So who wants it then? (Score:5, Insightful)
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Re:So who wants it then? (Score:5, Insightful)
If the music execs were serious about wanting Apple to open up Apple's DRM, they could renegotiate to reduce Apple's risk. But since there appears to be no actual effort on that front, it sounds more like diversionary finger-pointing by the music labels.
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open DRM versus no DRM (Score:4, Insightful)
In Jobs' letter (whenever that was) he called for DRM-free music, because he said an open DRM standard wouldn't work (it would be too easily reverse-engineered, since many entities would have access to the code, or whatever).
An open DRM standard is exactly what the music companies want, however, and that's the point of this story. The music companies don't want to give up their (ill-gotten) rights over the music they sell but they want to appear like they're doing something for the consumer, so they argue for open DRM and call Jobs insincere. Ahh, it makes me angry.
DRM = near-monopoly for Apple (Score:5, Insightful)
DRM is a financial fact of life, just like circumventing it is a technical fact of life. The only thing that will kill the DRM-monster is the sword of falling profits, and it looks like that is lost for the moment. No ammount of wishful thinking about open source DRM or Apple giving up its strangle hold will change this story.
Money. It is ALWAYS about money.
Grandfathering purchases? (Score:3, Insightful)
Are you going to have to buy it all over again? Will they give you new copies of what you purchased? Will all the new DRM-free players also be able to handle any media with any outmoded DRM to allow backwards compatibility of things I've already bought?
Has anyone thought that perhaps the 180 degree change of opinion from Apple's side might find you paying twice for your "Best of The Rolling Stones" album?
Why are they complaining? (Score:4, Insightful)
The music executives demanded that every bit of music that comes out be "protected" with ConsumerRightsArentPermitted, and got, at least with Apple iTunes, exactly what they asked for.
So now they are reaping the consequences of their own shortsighted greed and contempt for their customers and they blame the messenger?
iPod is open for others! (Score:5, Insightful)
Captain subtext translates (Score:5, Insightful)
Steve Jobs: You got it. Hey, it only works with iPods as well. Isn't product tying great!
Music Industry: Can we have more control over our product?
Steve Jobs: Nope.
Music Industry: Oh. Uhm... We'll leave
Steve Jobs: No you won't.
Music Industry: Oh. Ummm can you open up Fairplay. This will mean there's some competition and we can afford to ditch you.
Steve Jobs:: Nope. Why would I ever do that?
Music Industry: We'll make you look like the bad guy.
Steve Jobs: You can try. I made downloadable music viable, produce the gadget all the cool kids want and I don't sue children and old ladies. Not only that, but I can plausibly blame all your troubles on you.
Re:Nice. (Score:5, Insightful)
Only that's not what MS has done. You'll note that MicroSoft didn't use their own "open" PlaysForSure DRM once they had their own Zune music player and music store. Instead they set up their own proprietary DRM that was incompatible with PlaysForSure.
Chances are they ended up in a contract that would hold them responsible if DRMed music sold for the Zune got cracked and pirated. If their contract is anything like Apple's, they could lose access to their entire music library if they can't plug the hole fast. And they can't ensure they can do that if other companies are involved with the maintenance of the same DRM.
MS only has only proven Apple's point. Anyone with a real stake in this game can't risk using an open DRM. (MS can license PlaysForSure to other companies because MS has no significant risk if PlaysForSure gets cracked.)
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Strategic (Score:5, Interesting)
This is NOT what the music industry wanted. When they say "DRM," they mean DRM that protects *them,* not resellers. So now they're crying for Apple to "open" their DRM. They still want DRM, just DRM that doesn't give Apple the above benefits, the goal being to effectively give their competitors a chance to flourish. If this happens, the music industry will regain the upper hand in negotiations, and start forcing Apple to do its bidding. This will, of course, result in higher prices and poorer service.
The music industry is betting the public won't understand the difference between "opening" DRM, and doing away with it. The former helps nobody but the music industry. If they succeed in convincing consumers that the industry is opposed to DRM, and mean old Apple is forcing it on them, they'll be able to turn public opinion against Apple and get their demands met. This has nothing to do with helping the consumer, and everything to do with the music industry trying to wrestle its way out of Apple's iron grip on its throat.
We'll see how this turns out.
Customers have spoken (Score:4, Insightful)
What else will it tell the **AA? It says people are fed up with thier practices and are starting to vote with their wallet. Revenue goes down they cannot possibly be at fault so it must be Steve Jobs. He did it! We did not make any bad decitions we are doing what our customers want and protecting our artists.
Well... the reality is Jobs is selling the music because he is comming closer than anyone to what customers ACTUALLY want. Online sales more than doubled and who caused that? Also of note is that they never said CD sales are down... only that revenue is down. Expenses such as suing so many people might drain revenue no?
They are scared to see DRM go (Score:3, Insightful)
If Apple holds control over popular use of DRM, then it is inevitable music companies will have to offer DRM free music - because it's the only way to get the pricing control they really want. They don't want to be without DRM, which is why the demand Jobs give it up... it's like they built a giant castle, and just as it was done Jobs snuck in and raised the drawbridge. Now he's threatening to set a match to the powderkegs inside and destroy the whole castle. They don't want the general population to be able to enjoy the castle, they want it back for themselves.
Open DRM is good for consumers... (Score:4, Funny)
I Laughed My Ass Off After Reading This (Score:5, Interesting)
Man, I laughed my ass off when I read this one. So, there's a 4 percent decline in overall revenue. The only reason they could find is Steve Jobs? Of course, it wouldn't have anything to do with the fact that their products suck, would it? No, they would never look at themselves and wonder why sales are down. I guess their latest "pop tarts" aren't bringing in the money they were a long time ago. Oh, and I'm sure the lawsuits aren't affecting the revenue line. Nah - it's got to be Steve Jobs, isn't it?
Please. How lame can you get?
And a side of re-hash... (Score:5, Interesting)
Now, they don't need to. The iTuner gets the new "<fiction>Van HalenRunning With The Devil f. Alanis Morrisette on vocals</fiction>" for a buck, instead of shelling out $17.99 for that and 17 reruns. That's a 94.4% drop in revenue, and DRM has nothing to do with it.
Sleep In The Bed You Made (Score:4, Insightful)
Sounds like they made their bed, now they got to sleep in it. Pleasant dreams.
Re: (Score:3, Insightful)
Vote with your wallet, because that's the only vote that counts. Just buy used CDs. There are tons of places to do it online, and plenty of stores that sell pre-owned CDs as well. The RIAA and company gets zero money from it, and they can't stop it unless they wipe out the first-sale doctrine for everything, not just music. I wonder how much those music executives would enjoy being told that they have no right to resell their Jaguar t
Re:Am I right or am I wrong? (Score:4, Interesting)
Just look at all the problems MSFT has had with getting playsforsure to actually play for sure.
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