updated 02:30 pm EST, Thu February 8, 2007
RIAA on Jobs' letter
Recording Industry Association of America (RIAA) chairman and chief executive Mitch Bainwol has rejected Apple CEO Steve Jobs' plea to remove the requirement of digital rights management (DRM) from digital music, suggesting instead that the Cupertino-based company instead open up its FairPlay DRM to competitors. Bainwol argues that the move would allow more consumers to make use of the iTunes Store to play tracks on portable players other than the 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," the chairman said. Apple in unlikely to act upon Bainwol's suggestion, however, as Jobs hinted in his letter that disseminating FairPlay to other companies is a dangerous game that would seriously increase the odds that the standard would be hacked, according to the Associated Press.
Several analysts have also shared comments with the AP. "Clearly, DRM is not working," says Forrester Research's Ted Schadler. "It sends a message to the customer that 'we don't trust you.'" Inside Digital Media's Phil Leigh agrees, even contending that DRM-free music can increase label exposure. "Digital music has entered the mainstream. The restrictions [labels] require Apple and others to carry are preventing the market from developing to its full potential -- it's retarding the growth."
Not all analysts agree, however. "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," says Deutsche Bank's Doug Mitchelson, who chastizes Jobs while noting that he could have proposed an industry-wide DRM standard, or safeguards on media players that would prevent playback of pirated songs.
Likewise, Jupiter Research's David Card believes that "music services wouldn't work without DRM. [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."