LOS ANGELES (AP) - A recording industry group fired back Wednesday at Apple Inc. (AAPL)
CEO Steve Jobs, suggesting his company should open up its anti-piracy
technology to its rivals instead of urging major record labels to strip
copying restrictions from music sold online.
Mitch Bainwol, chairman and chief executive of the Recording Industry
Association of America, said the move would eliminate technology
hurdles that now prevent fans from playing songs bought at Apple's
iTunes Music Store on devices other than the company's iPod.
"We have no doubt that a technology company as sophisticated and smart
as Apple could work with the music community to make that happen,"
Bainwol said in a prepared statement.
In an essay posted Tuesday on the Cupertino-based company's Web site,
Jobs called on record labels to abandon their requirement for online
music to be wrapped in Digital Rights Management, or DRM, technology,
which is designed to limit unauthorized copying.
The major record labels - Universal Music Group, EMI Music, Sony BMG
Music Entertainment and Warner Music Group - control some 70 percent of
the music market and have maintained that DRM safeguards are needed to
stave off rampant piracy.
Jobs said eliminating such restrictions would open up the online music marketplace.
Songs purchased on iTunes are wrapped in Apple's proprietary version of
DRM technology, known as "FairPlay." Songs purchased from rival online
stores that carry different DRM technology cannot be played on iPods.
In his essay, Jobs said Apple is against licensing "FairPlay" as an
alternative method for making iTunes accessible to all portable
players, because making the technology widely available would make it
easer for hackers to figure out how to bypass it.
Calls to Apple were not immediately returned Wednesday.
Several analysts suggested the record companies should follow Jobs' suggestion.
"Clearly, DRM is not working," said Ted Schadler, an analyst at
Forrester Research. "It sends a message to the customer that 'we don't
trust you.'"
Phil Leigh, senior analyst at Inside Digital Media, suggested that
removing copy restraints would give the labels' music more exposure.
"Digital music has entered the mainstream," Leigh said. "The
restrictions (the labels) require Apple and others to carry are
preventing the market from developing to its full potential - it's
retarding the growth."
Not everyone agreed that dumping DRM is the best strategy for the record labels.
"Eliminating online DRM appears to us to be an overly risky move that
eliminates the potential for a future digital-only distribution model
free of piracy," Deutsche Bank analyst Doug Mitchelson wrote in a
research note.
Jobs could have just as easily lectured the software industry, which
includes Apple, for its unwillingness to pursue an industrywide DRM
standard or work to make media players recognize and not play pirated
songs, Mitchelson wrote.
Copy protection is necessary to make other digital music sales models
work, such as an all-you-want music subscription offered by Napster and
the limited song-sharing features of Microsoft Corp. (MSFT)'s Zune player.
"All these music services wouldn't work without DRM," said David Card,
music and media analyst for Jupiter Research. "(Music labels) are very
nervous about distributing content that is unprotected. They think that
everybody will share music, and there's evidence that a lot of people
will."
Other analysts pointed to the success of eMusic, an online service that
sells music in the MP3 format, which is free of anti-piracy
restrictions.
The service, owned by New York-based Dimensional Associates Inc.,
offers downloads from a catalog of more than 2 million tracks by
independent artists through a subscription plan.
Britain's EMI Music is experimenting with releasing music in the
DRM-free MP3 format. In the past few months, the company has released
tracks by Norah Jones, Lily Allen and the band Relient K.
"The feedback from fans (has) been very enthusiastic," EMI spokeswoman Jeanne Meyer said.
Leigh believes older music could be made available without copying restrictions.
"I think the labels will release selected back-catalog stuff, to see what happens," he said.
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On the Net:
Jobs' essay: http://www.apple.com/hotnews/thoughtsonmusic
