Mid-February 2007

DRM Wars Concern You!
A format war that hurts billions of music lovers!
Article By Steven R. Rochlin

  My editorial earlier this month, New Formats On Two Fronts, concerned a few things including the buzz around the possible failure of the Blu-ray format and the war between it and HD DVD. Little did anyone realize that a week later the buzz would be about major players in the music resale industry wishing to do away with Digital Rights Management (DRM).

Over the years my editorials have time and time again covered the then recent developments of music labels attempting, in futility i might add, to protect their content. Some examples include Secure Music Is An Oxymoron (February 2000), Fight The Power! Or Do You Enjoy Losing Your Rights? (January 2002) and Protect At All Costs? (March 2004). Now it appears Steve Jobs is getting all the credit concerning the desire to eliminate DRM when for many years consumers, and dare i add Bill Gates, have been against DRM. Yes, Bill Gates of Microsoft fame said on December 15, 2006 as the Zune was beginning its swing, "DRM is not where it should be. In the end of the day incentive systems (for artists) make a difference, but we don't have the right thing here in terms of simplicity or interoperability."

They say there are two sides to every story and with so many players with their hands in the financial cash register we will probably see four or more sides as this story plays out within the global marketplace. First you have the content owners, then the content providers, and for now we will say, lastly, the hardware manufacturers. If you felt it was Sony against the rest of the world with their proprietary SACD format, that sold a nearly insignificant amount of software and hardware i might add, imagine the tens to hundred millions of portable digital music players and the staggering amount of music sold online.

Of course Apple Computers and Microsoft have a sweet deal with their iPod and Zune hardware (respectively), as they sell music from third party copyright holders that works with their hardware. Apple Computers uses their FairPlay DRM scheme to protect copyrighted content. They get to make money on both ends of the food chain as it were, because they sell the hardware and content while other online music services such as MusicGiants, Napster 2.0, Rhapsody and others fight for the crumbs. Worst still, recently the world's largest retailer and second-largest corporation, Wal-mart, has begun taking their bite into the online music fray. So you may be asking yourself why is Steven complaining when music is available online for legal download and there is plenty of competition in the marketplace?

The reason for my complaining is the same situation we have with DVD-Audio versus SACD, let alone the Blu-ray versus HD DVD wars. Besides the fact Bill Gates publicly said he hated DRM months before when Steve Jobs did, yet Jobs gets the news headline, is that DRM should have been eliminated long ago. If you think the whole Sony proprietary SACD versus industry standard DVD-Audio debacle was bad, and the now HD-DVD versus yet another Sony format (Blu-ray), go ahead and try loading your legally purchased online music to every portable music player. Some files will while some won't. There is no full interoperability, the ability of all legally downloaded music files to work with computer systems and products without special effort on the part of the customer.

Imagine buying a wonderful collection of music online. When you decide to buy the latest new high-tech gadget you are then dumbfounded to find out the music you legally own will not easily transfer to the aforementioned new unit. Microsoft did try their hands at the PlaysForSure (PFS) scheme, a way of letting consumers know that a music or video device will work with like-logo'ed hardware. Supporters of PFS include CinemaNow, MSN Music, MusicMatch, MusicNow, Napster, Wal-Mart Music Downloads, and many more.

Of course one just has to ask, then why does Microsoft's very own Zune portable digital content player not adhere to the PFS technology? Naturally we do not expect Apple Computers' iTunes or their iPod hardware to support a Microsoft venture, as this would be like Sony supporting industry standards including DVD-Audio and HD DVD. What on Earth is Microsoft thinking by introducing a device that does not support their PFS technology, a technology for ease of interoperability that was released only a year or so earlier? Worse still is their Zune.net online music, which of course will not play on... You get the point. So where are the Good Guys in the proverbial white hats?

Founded in 1990, The Electronic Frontier Foundation (EFF) is a non-profit United States organization that continues to confront cutting-edge issues defending free speech, privacy, innovation, and consumer rights. In fact they have been fighting for a solution so that copyrighted content owners can get paid for their work wile people freely file share. Speaking of file sharing, the mp3 format is one of the many non-DRM file types and this is why Napster (1.0) and other peer-to-peer (P2P) networks did so well years ago, as mp3 files were easy to use and played on nearly every portable music player, except Sony who back then were adamant about not making a unit that would play mp3 files. In very recent news, the EMI Group is considering talking with online retailers about possibly selling its entire digital music catalog in MP3 format without copy protection according to the Wall Street Journal. This would allow music lovers to easily and freely share the files. This would eliminate Apple Computers FairPlay and Microsoft's PFS DRM. Forget sharing with others for a moment; just imagine if all the music you purchased could easily be enjoyed on whatever music hardware/software you choose. Is that really asking too much? i think not.

Heck, i am not going to get into a long-winded discussion about the $$$ various content providers owe me for paying 15 times for the right to listen to Pink Floyd's Dark Side of the Moon. You see my friend, every time you buy an album you are also paying for various rights. So with over 15 copies of that album in my home i demand a refund due to paying multiple times for the same right to enjoy the same content. Sorry for getting off-topic per se, that situation is material for another editorial.

To round out my feelings here, the Recording Industry Association of America (RIAA), the trade group that represents the U.S. recording industry, released a statement concerning Steve Jobs' recent letter and said "Apple's offer to license FairPlay to other technology companies is a welcome breakthrough and would be a real victory for fans, artists and labels. There have been many services seeking a license to the Apple DRM. This would enable the interoperability that we have been urging for a very long time." Bullshit! First off Apple Computers is right now suffering legally in Europe over their DRM, and if Apple Computers licensed their DRM it still does not solves the lack of usability with other DRMs and various hardware. Microsoft licenses their PlaysForSure system and look at where that has gotten us! There is no DRM on the thousands of vinyl records in my home. No DRM on my lossy compressed commercial CD collection. In fact why is it we have DRM again? Oh yeah, because people love music and want to share their joys in life with others. Oh, and by the way, if you choose to get a program to hack various DRM schemes, HD-DVD, Blu-ray, etc, try Internet searches for things like FairUse4WM, iTunes DRM hack, AACS DRM hack... and DeCSS.

And now some words from John Kennedy, Chairman & CEO of the IFPI:

We have been talking about the desirability of interoperability for some time. However, we have always respected Apple's own commercial modus operandi.

We are pleased that Steve Jobs now wants to address interoperability, but he appears to be saying that interoperability has draconian side effects. We don't believe that that need be the case.

After such a long period without interoperability, it seems to me that the right thing to do would be for Steve Jobs to sit down with the industry and say "I believe these are the consequences if I allow interoperability" and for the industry to explain how we believe that some of the side effects that he believes are inevitable are not inevitable.

There would be a sensible discussion of the pros and cons, a risk/reward assessment and a discussion to make sure we are not throwing out the baby with the bathwater, and, most importantly, to preserve the right of all rights holders, big and small, to decide whether they want to implement DRM on their intellectual property.

Some further thoughts:

I am told that in spite of what Steve Jobs says it should be neither impossible nor unreasonably burdensome to implement interoperability whilst maintaining the security of DRM

DRM makes the following possible:

Subscription services 
New business models 
Variable pricing for variable uses 
Options for different types of music consumption 
DRM and content protection are not unique to the music industry:

ATM Machines 
Online Banking 
They have been applied by TV film and software industries for more than a decade 
They provide security to content owners and enable flexible choices of different service options 

It is incorrect to give the impression that you cannot have interoperability and DRM

Is Steve Jobs now advocating Apple's own software should be open source and that Disney and Pixar sell movies without DRM protection?

The fact that CDs are an unprotected format is no reason to make the same mistake for the future, i.e. remove options for protection

Banks have interoperable ATM systems and mobile phones have interoperable voice and billing services without compromising the integrity and security of the service

Evidence that the burden is manageable comes from Microsoft who continue to run Plays For Sure across hundreds of music stores and devices.

Until now Steve Jobs has not advocated interoperability; perhaps now the door is open to find a combination of interoperability and DRM to have a win/win scenario for Apple, the music industry and the consumer.

So it appears the IFPI feels that the CD format was a mistake. Word on the street is that Steve Jobs has no intention to license their DRM. Guess Apple Computers does not like to share their FariPlay DRM, or perhaps can not handle large-scale DRM licensing unlike Microsoft who will license PFS. What company was it that did not license a format called Beta(max) and where did that get them?

And now i present yet another letter, this time from Jack Lacy, President of the Coral Consortium which is a cross-industry group to promote interoperability between DRM technologies used in the consumer media market. Coral Consortium's founding members are HP, Intertrust Technologies Corporation, Koninklijke Philips Electronics N.V., Panasonic (Matsushita Electric Industrial Co., Ltd.), Samsung Electronics Co., Ltd., Sony Corporation, and Twentieth Century Fox Film Corporation. In addition to its founders, Coral Consortium also includes among its promoter members, IFPI, NBC Universal, Inc., and LG Electronics, Inc.

Dear Mr. Jobs, 

The directors of Coral Consortium were pleased to hear about your interest in interoperability. We agree with you that this is a big problem for consumers. They should be able to acquire content from a wide variety of competitive service providers and play their purchased content on a range of devices and platforms from different manufacturers. This is an issue that is very important to our membership.

It would appear from your "Thoughts on Music" that you may not be familiar with our organization so we would like to take this opportunity to brief you.

We have been wrestling with the issues around interoperability for some years and have concluded that it is not so much a technology problem as a business problem. We have completed the development of a suite of technical specifications for interoperability and these can be downloaded from our website, www.Coral-Interop.org. We think that your engineers will find it very straightforward to integrate this framework into your iTunes service. This technology would enable you to interoperate immediately with Microsoft based Janus devices and services, and with OMA (Open Mobile Alliance) based devices and services. Of course the secrets in Fairplay remain safe -- adopting the Coral technology does not require you to share them with anyone else.

This does not just address music. The Coral Interoperability Framework works for video as well. We know that, as a major shareholder in a very successful film studio, it is important for you both to protect your film assets, and to provide for their widest possible distribution. Coral can enable that.

Finally, if you are worried about the content industry being comfortable with the Coral solution you should know that many parts of that industry have been involved in the development of these specifications. Though most of Coral's membership comes from technology companies and service providers, the members from the content community include:

EMI Music
International Federation of the Phonographic Industry (IFPI)
Motion Picture Association of America
NBC Universal, Inc.
Recording Industry Association of America (RIAA)
Sony BMG Music
Sony Pictures Entertainment
Starz Entertainment Group LLC
Time Warner Cable
Twentieth Century Fox Film Corp.
Universal Music Group
Warner Bros. Technical Operations Inc.
Warner Music Group

We offer Apple, Inc. a warm invitation to join Coral's ranks and help provide interoperability and the increased choice that will bring to all of our customers.

Yours sincerely,

Jack Lacy
President, Coral Consortium
On behalf of the Coral Board of Directors

And the band plays on, as will this debate on many fronts in many countries. Apple is indeed in trouble in Europe and now it appears Steve Jobs has opened the proverbial Pandora's Box. The real question is, will Steve Jobs be willing to open up the iTunes DRM or stay on course with being unwilling to license their DRM? Frankly, we do not need DRM. Question: Why is it that if i buy a vinyl LP i can sell it. i can sell CDs too, yet can i sell my digital music downloads? And if i can't sell digital music downloads that have been legally purchased, then why? Are digital music downloads a rip-off if i can't rightly sell them once i'm no longer desiring to use them, as is done with vinyl LPs and CDs? As always, in the end what really matters is that we all....

Enjoy the Music ("Freedom Of Choice" by DEVO right now),

Steven R. Rochlin