updated 12:40 pm EST, Wed February 7, 2007
Music execs stand fast
Executives from the music industry have made it clear that while they may not stick with digital rights management (DRM) as a means to protect their digital catalogs, they are not willing to abandon copy protection altogether as requested by Apple CEO Steve Jobs in an open letter published yesterday. Responding to the letter, a senior executive at one company who asked to remain anonymous said "we're not going to broadly license our content for unprotected digital distribution." Another executive said record companies are concerned that lifting restrictions on digital music might have serious ramifications on the parallel market for protected video content, according to the New York Times.
Apple is facing increasing pressure overseas as several European countries led by Norway proceed to crack down on consumer rights laws in those regions. Involved countries and consumer agencies believe consumers shouldn't be locked into playing tracks purchased from the iTunes Store exclusively on iPods and iTunes software, or to any closed proprietary system.
France in 2006 passed a law that repeatedly threatened to close down the iTunes Store in that country as it proceeded through both houses, but the law was eventually watered down and has resulted in no visible consequence to Apple thus far.
Italy is also joining Norway, Sweden, Finaland, Germany, France, and other European countries in the fight against closed proprietary systems locking consumers into playing digital music on one type of portable player. The country is hoping to achieve an online music market with no barriers by formally contacting the Italian Antitrust Authority, the Italian trade ministry, and the ministry for the economic development. Italy hopes Apple will review its DRM policies for a more open model that would serve as an example to other vendors and major music companies, arguing that Italian consumers should have the right to use any player on the market to listen to music acquired from the iTunes store.
Senior advisor Torgeir Waterhouse of the Norwegian Consumer Council yesterday responded to Jobs' open letter, acknowledging that music labels need to carry their own weight to ensure fairness for customers on a global scale but maintaining that Apple is responsible for consumer rights in Norway because it is the storefront actually selling the music to customers.
"It's quite clear that the record companies carry their share of the responsibility for the situation that the consumer [is] stuck in," exclaimed Waterhouse. "However no matter what agreements [the] iTunes Music Store [has] entered into, they're still the company that's selling music to the consumers and are responsible for offering the consumer a fair deal according to Norwegian law."
Jobs in his letter to the world at large questioned why the big four music companies are straining to protect digital music offerings when a majority of their music is already sold with no copy-restrictions at brick-and-mortar retail stores such as Wal-Mart and Target.
"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," Jobs wrote, who clarified earlier in his letter that Apple would breach its contract with the music labels under the current terms if it failed to protect their musical assets from piracy, adding that Apple only has "a small number of weeks" to repair any situation that results in pirated content.
Apple leads the digital music industry with a vast majority of both online music sales and portable media players in the U.S., making the Cupertino-based company a prime target for advocates of free music aiming to broaden consumer rights. As Apple fights to maintain its lead in the industry against competitors such as Sony and Microsoft, the legality of its closed system -- imposed by the four major record labels as a requirement to maintain its wide array of digital music offerings -- continues to threaten Apple's iTunes store in numerous European countries.