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Wednesday, February 07, 2007
Jobs Calls on Music Industry to Drop DRM

Apple Chief Executive Steve Jobs on Tuesday called on the four major record companies to start selling songs online without copy protection software to thwart piracy known as digital rights management (DRM).

Jobs said there appeared to be no benefit for the record companies in continuing to sell more than 90 percent of their music without DRM on compact discs, while selling the remaining small percentage of their music encumbered with a DRM system.

"If such requirements were removed, the music industry might experience an influx of new companies willing to invest in innovative new stores and players. This can only be seen as a positive by the music companies," he said in a statement posted to his company's Web site.

Apple has been under pressure in Europe to make iTunes music compatible with players other than the iPod. On January 25 Norway's consumer ombudsman said Apple must open access to iTunes by October 1 or face legal action. The company has also faced some criticism because songs bought on the iTunes music store play on the iPod and not other digital music players.

"Perhaps those unhappy with the current situation should redirect their energies toward persuading the music companies to sell their music DRM-free," said Jobs about the European action.

Apple also is due to reopen talks with the four majors in early March to discuss terms of their relationships with the iTunes Music Store, Reuters reports citing a source familiar with the discussions.

The four majors -- Vivendi's Universal Music Group; Sony BMG Music Entertainment; EMI Group ; and Warner Music Group -- all negotiated one-year extensions with Apple last year, according to Reuters.

Apple's iTunes Music Store is currently the world's largest digital music outlet, having sold around 2 billion songs since its launch in 2003. It has more than 70 percent market share of all digital music sales in the United States.

However, the songs sold on the service are protected by Apple's proprietary FairPlay software, which prevents users from making multiple copies for distribution. The software only works with Apple's iTunes software and iPod digital media players.

Analysts suggested that Jobs might be trying to deflect pressure from the European Union regarding the interoperability question to the record labels.

Jobs said Apple had concluded that if it licenses FairPlay to other companies it could no longer guarantee to protect the music it licenses from the major record companies.

"Why would the big four music companies agree to let Apple and others distribute their music without using DRM systems to protect it?" Jobs wrote on the Apple Web site. "The simplest answer is because DRMs haven't worked, and may never work, to halt music piracy."

Jobs estimated that only about 3 percent of the music on the average iPod is purchased from the iTunes store and therefore protected with a DRM. Because of that, "iPod users are clearly not locked into the iTunes store to acquire their music," Jobs wrote.

Jobs also said that more than 20 billion songs were sold DRM-free on CDs in 2006.

Music industry watchers, particularly at independent music companies, have intensified calls in recent months for the majors to sell their music without copy protection.

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