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How iTunes screws the music industry and the public

In my latest Information Week column, I discuss the way that loose, single-vendor anti-copying systems like iTunes Music Store DRM are just as bad for the public (and even worse for the music industry) as tight, super-restrictive systems are:

The iPod is the number one music player in the world. iTunes is the number one digital music store in the world. Customers don't seem to care if there are restrictions on the media Steve Jobs sells them -- though you'd be hard pressed to find someone who values those restrictions. No Apple customer woke up this morning wishing for a way to do less with her music.

But there's one restriction that's so obvious it never gets mentioned. This restriction does a lot of harm to Apple's suppliers in the music industry.

That obvious restriction: No one but Apple is allowed to make players for iTunes Music Store songs, and no one but Apple can sell you proprietary file-format music that will play on the iPod.


27 Responses to “How iTunes screws the music industry and the public”

  1. theed says:

    "... and no one but Apple can sell you proprietary file-format music that will play on the iPod."

    True; and pointless. Apple's restrictions allow some really important things like burning to a CD with no further encryption or barriers, and accepting from CD, and accepting plain mp3 or plain AAC. Your 'proprietary' statement is self fulfilling by definition, and ignores the interoperability of the redbook CD standard and the de-facto mp3 standard with which iTunes complies.

    Is iTunes perfect? No. But it it the only serious competitor in the digital music arena to allow these compatibilities. 4 out of 5 stars, and we'll keep hoping for a really open 5 star solution that has real content to provide. In the meantime, I have high quality iTunes songs with high quality DRM free redbook audio CD backups. And I'll occasionally use my iPod too.

  2. Al Williams says:

    Any DRM free MP3 or AAC/MP4 sold by any of the many independent, non big label controled stores on the internet will work on any iPod. The artists are obscure but the stores are out there. Amazon's one and only DRM free MP3 is another example.
    Every DRM'd iTMS tune can, as you say more than once, be easily made DRM free and be used on any MP3 player. Where is the lock in?
    The only real problem, as you point out, is that iTMS Big Label controled compeditors can't monitize Apple's iPod Community asset. This is not a problem for iPod users, everyone sells the same Big Label tunes. It's only a problem for the losers in the MP3 player wars. Well, what rights do they have to that iPod asset? They did not creat that market. Apple has no access to their markets.
    If a game programer wants access to XBox or Playstation or Nintendo they must be approved by and pay the platform owner for access to that asset. Each one of those music store compeditors lost the battle for the hearts and minds of the MP3 player consumers on a level playing field. Apple came late to the game and won their massive market share fairly, with a better product and a better integrated software-hardware system. They used DRM because that was the Labels choice, not Apple's. They did not abuse a monopoly to get where they are today.
    iPod users do like the DRM Apple uses. They like it because most of them never bump into it. It's terms are so liberal that they hardly ever get in the way. You also know that the artist does get a few pennies for every tune that you buy.
    As for keeping the Big Labels in check, who exactly is upset with that? Certianly not the consumer.

  3. Terrin says:

    A couple of observations. First, it is very hard to feel bad for the media companies' inability to authorize the reverse engineering of Apple's copy protection scheme. This is because those companies authored the DMCA that protects Apple's scheme. Apple itself played no part in the drafting of the law. (See Digital Millennium by Jessica Litman). Moreover, it is important to note that the UN World Intellectual Property Organization Treaties that you refer to do not require the harsh implementation of copy right protection technology that the DMCA provides. (also see Digital Millennium). On the media companies insistance, the DMCA went way over board. For instance, the above mentioned treaties do not require any restrictions on reverse engineering or on fari-use.

    Second, Apple originally did not want any copy protection. The music industry insisted. Now as it turns out, the copyright protection benefits Apple. Again, it is hard to feel bad for the music industry under such circumstance. They essentially are reaping what they sowed.

    More importantly, I do not hear any actual consumers crying over Apple's system. Why would they, 1) they know about it before hand, and 2) as you mention they can remove the DRM. Apple is not restricting consumers in any meaningful way?

    By the way, Microsoft's DRM system is not less proprietary. Sure, I can move music to more players if I wanted to, but Mac users and Linuix users are left out in the cold.

  4. E. Mike Gay says:

    Dude, I don't think you've done enough research on ripping iTunes tracks from burned cds. After you've burned a copy of the purchased tracks to cd you immediately rip them to mp3 files directly from the freshly burned cd which has all the track information provided by iTunes initially. This is one way I "back up" the files I purchase from iTunes either as whole cds or compilations--as well as allowing myself to burn mp3 discs for my car player. iTunes will always read any disc (full length or mp3) that it creates on the computer on which it resides. Additionally when you rip files from a complete cd (either downloaded and burned or a purchased album) if you're connected to the internet, the file names will be retreived through the CDDB on any computer with iTunes.
    Peace,
    E. Mike

  5. Ryan says:

    So do you think Apple has the power to convince the labels to drop the DRM requirement on iTMS downloads? I don't think it really matters to Apple since if they wanted to lock people to the iPod they could use a proprietary music format instead of AAC. Apple won't be forced to open up their DRM to other competitors until they actually *have* competitors. Why do the work otherwise? Consumers made their choice long before the iTMS was born on what portable music player they wanted to use.

    Personally, I don't feel restricted by DRM since I can do anything I need to do with my music - listen to it on my iPod, in a car, at home, and burn mix CDs for friends. It was only created to passify the RIAA.

    The question of future compatibility is the only thing that worries me. Yeah, I can burn/rip all the songs I've bought and that might be enough to sway a purchase decision away from a competitor.

  6. Ben says:

    Why are you blaming Apple for the public's laziness? If you want to buy a download, then pick the proper store and system. If you want MTV's URGE songs, well, you can't play them on an iPod, so you need to buy something else. Apple doesn't screw the music industry, they screw THEMSELVES. They did it buy not opening up to online sales years before the iPod and ITMS became popular. The public was SAVED by Apple. At least the ones who didn't know how to rip their own cds that they owned to put on their players, no matter WHAT brand they were. iTunes used to support many different players, but the manufacturers were the ones that could not care less if Mac users buy their stuff and therefore did not write drivers to work with iTunes, so Apple made them. Can you blame Apple for dropping that after awhile? Why don't you take the time to explain to your readers how bad the DRM is on the other side of the fence? WHY is it so hard to make it on the Windows media side if Apple is so bad and iTunes is screwing everybody over? You make people think that it was Apple's idea to put DRM on the music, but it wasn't. It was the ONLY way that the labels would agree to it, and now they are whining that .99 is too cheap.

    You're off base on this one. I shudder to think what the industry would be like if M$ had their way with the Janus system.

  7. I agree that DRM is consumer unfriendly. But, you tend to characterize this as an issue that Apple has created, rather than something that came from the music studios. If the studio hadn't insisted on DRM, I wonder if Apple ever would have created a DRM that restricted consumers to the iPod. Maybe Apple should thank the studios for suggesting the idea, which they just took a little bit further.

    That having been said, what is being done to spread the discussion about the downsides of DRM. The majority of people that I know don't have any idea what DRM is, let alone that it is bad. Perhaps we should get Creative and Real to finance a nationwide campaign against it. I did notice that Yahoo! is also against DRM. It would be interesting if they could really push this agenda with the power that they and E-Bay have.

  8. Phil Bowman says:

    But given that the major labels aren't going to allow their music out without DRM (which is a bonus for the minor labels which do, and the whole 'podsafe' movement), iTunes at least allows you to burn your tracks to a CD, and rip them back to MP3. I burn all my purchases to CD straight away, and if I want to play them on another player (phone, pda etc) then I can rip them back easily. Other systems, even if they allow you to burn a "CD", often corrupt that so that you can't rip it back.

    Also, the licensing on Sony and MS DRM has in the past meant after a few PC upgrades, I've ended up with music I've bought which I can't play any more - with iTunes you can always play your music on 5 PCs, and I understand you can reset that count once a year if you mess things up (or as in my case, when one of your PCs is stolen).

    There is obviously a loss of quality in doing this, but if I want quality (as opposed to convenience) I buy the CD. What I really hate as a consumer is DRMed CDs where when I've bought it, I can't rip it onto my PC.

    I think it's therefore unfair to pick out iTunes for specific criticism in the DRM environment, as even though it's the biggest, it's probably the most consumer friendly. I speak only as an ipod owner.

    Phil Bowman, UK

  9. wolff says:

    Word was not just monoplized by "market forces" but the years and years and years of Microsoft refusing to disclose the FILE FORMAT.

  10. Henrik S. says:

    I completely agree with your statement - for the following reasons:

    Right now the "per track" cost is about the same in all online music stores. If this should change (which some people are talking about will happen), there would still be no "free" market, since the only place online where I can buy music for my iPod is on iTMS (99% of all other online music is sold in DRM'd WMA which the iPod cannot handle).

    And the other way - getting music from iTMS onto other players. Sure you can burn the music to a CD and rip it again - with the loss in quality that this gives. So iTMS cannot give me that complete solution I would like, and I still go and buy the CD if I want the quality.

  11. Sam says:

    Apple's DRM is the best thing to happen to consumers of online music. There, I've said it; I know it's an unpopular position but I believe it's true. Why? Because the media companies essentially form a monopoly over the availability of music from the artists they've signed. If an artist is popular, their monopoly on that artist's music essentially lets them charge whatever the market can sustain for that artist.

    Enter iTunes Music Store. It's either them or no DRM at all if you want iPod owners (ie. 80% of the non-phone MP3 players in existence) to be able to use your media. And Apple wants to sell music at 0.99c a song. And Apple's monopoly on distribution counter-balances the media companies' monopoly on content. They're forced to share power, prices go down, and the consumers win.

    Thus, I see Apple's FairPlay DRM as doing two things: 1. forcing the industry to investigate the possibility of no DRM whatsoever, and 2. forcing them to sell popular songs to consumers much cheaper than they would if they'd had a monopoly on the end-to-end experience. If Apple is forced to license FairPlay to everyone, it hands the media companies a full, end-to-end monopoly. Prices go up, consumers turn to piracy, and there's no incentive to investigate DRM-less solutions.

  12. JulesLt says:

    Henrik - the cost per track on emusic is - for me - about a quarter of the cost on iTMS.

    RMS called Fairplay 'Digital Inconvenience' seeing as the rights could be removed so easily, but the danger is that they can also be changed after the fact (we've seen the limit go from 7 to 5 computers) which is plain wrong.

    The other thing that is plain wrong is that iTMS sell everything with Fairplay even when those artists sell MP3 elsewhere. What's the excuse there - presumably 'not confusing the customer between DRM and non-DRM files'?

    (The other thing is that I think this is bad for Apple. They might not have intended it, having originally not wanted any DRM, but now it here it's a crack-pipe. Those growth projections are figured into their share price. Even if they were in a position to push the labels towards MP3, could they - as a publicly listed company - do so - unless there was evidence it would lead to an explosion in sales?).

  13. Dannie Jost says:

    Yes, I have often wondered why we are so willing to turn a blind eye on the iTunes-iPod monopoly? In my view this will work for a while until more and more people become aware of how bad a deal it is, and when the music creators, we call them musicians, wean themselves from big retailers.
    I do not own an iPod although I have often lusted for its elegant design, but I would want to use a device like an iPod in a different way, I would want full freedom as to what I can put on it and from where I can download it. That said, I also enjoy walking around just listening to the wind.

  14. Though I dislike iTunes for many reasons, one thing that annoys me is how many of the most popular video-podcasts are only making their content available on iTunes so that they get higher ratings. My old show used to beat Tiki Bar TV and Ask A Ninja on LibSyn's ratings (where we were all hosted), but since my subscriptions and downloads often came from other players, their ranking on iTunes gave the false impression that they were bigger than they were.

    Sure, perhaps I'm a little jealous ;) but I also believe in transparency and iTunes doesn't give very realistic rankings because they only have a portion of the full stats.

  15. doctor dread says:

    Well, I guess that is sufficient reason to buy music from http://www.allofmp3.com (yes I know that it is probably not directing profits back to musicians but until we have a reasonable source online for non-DRM music it is one of the only choices.)
    I love Apple and use only their products, but I will never buy a DRM product!
    The sooner the industry wakes up to this the faster they will reap the benefits. Inexpensive, easy to purchase online music is the future of music distribution - if it is cheap enough only teenagers will bother to copy it. The rest of us will happily pay.

  16. Paul Wouters says:

    Simply a good article. Thanks

  17. When I buy a book nobody stops me on the way out and gives me a list of things I may and may not do with it. I own it! When I buy a computer nobody says I can only put certain files on it nor that I am not allowed to tinker with it in any way I choose. I own it! When I buy a music CD nobody says I can only listen to it on 3 of the 10 CD players that I have. I own it!

    Apple doesn't have the right to "allow" you to rip your music to MP3 - you bought it, you own it!

    Apple doesn't have the right to restrict how many playback devices you can use - you bought them, you own them!

    Whether the product is a physical (book, DVD, CD) or digital (ebook, music/movie download) reproduction, if I hand over my hard-earned cash for it - I own it!

    It's hard to have any compassion for the entertainment industry as they start to discover that Apple owns them - be careful what you wish for fellas, you might just get it!

  18. Mark says:

    Dannie, you said, you wouldn't buy an iPod because "I would want full freedom as to what I can put on it and from where I can download it."

    But you do. You have total freedom as to what you can put on your iPod, and you have total freedom as to from where you can download music. Rip from a CD, buy from eMusic, iTMS--you can put whatever you want on an iPod and buy from wherever. Nobody is forcing you to buy DRM music from the iTMS--Apple's just made it very convienent and unobtrusive to do so, and they've been justly rewarded with the market share they have.

  19. jh says:

    Mark,

    I disagree with you, sir. Try to put some music on your IPOD using only EULA approved methods and NOT using Itunes.

    You'll find you can't. At all.

    What happens when Apple decides to start scanning for music that should be DRM'd but isn't.. and decides to go ahead and delete or relock that file up for you? What happens when Apple and a comeptitor get a bit testy towards each other and Apple decides not to allow you tou use their music files in your IPOD or in Itunes?

    The fact is, we're supposed to trust Apple will do the right thing. What if Apple spins off the ITunes music store to some other controlling party, and we no longer have apple in control? What happens then? Apple may do the right thing , and we might believe apple is a good company..but that doesn't mean they'll always be the one holding the controls to the DRM on your music.

    That's what I think any sane person should be concerned about. You don't have any rights here if they decide to shut down all your music. Read your EULA's. Read the DRM control information. They can shut your music down RIGHT NOW, and they can do it without you having any recompense.

    In fact, they can throw you in jail if you write a program to get around their program. It's considered a "circumvention technology" under the DMCA, and that is criminal, not civil.

    Jarrod

  20. [...] Cory Doctorow’s craphound.com >> Blog Archive » How iTunes screws the music industry and the public [...]

  21. Keir says:

    #

    #

    When I buy a book nobody stops me on the way out and gives me a list of things I may and may not do with it.
    Actually, they do. Look in the book, before the title page. It'll say something like `Copyright ...'

  22. Re: "Actually, they do. Look in the book, before the title page. It’ll say something like `Copyright …’"

    The analogy is to a DRM system that ties you to a specific machine(s), a specific playback tool and endeavors to restrict your capacity to share it as you wish. I would be very pleased to see a DRM system that respected my digital rights in the way you are obviously expounding - thus a system that states what rights are reserved by the creative artist in a text announcement and leaves me free to do with my property as I wish.

  23. Dannie Jost says:

    Thanks Mark. In that case I should look at the iPod a bit more seriously, so far I have not. I was under the impression that there was not much choice as to what the user could put on it other than what is available from iTMS-Apple.

  24. S says:

    Itunes screws the artists, it's all big money locking down the market. Its everyone else, bowing down to their might and power, and apple attempting to force us to suck it's corporate cock.

    OF course, there are always going to be some obedient types who WANT the cock. But that's another matter

  25. s says:

    except Apple isn't looking at a list of IPs and sueing random people $6000.

    Apple is screwing the music industry? That is a very good reason to be their customer. Any artists caught up with the RIAA deserve it too.

    Who knows, maybe this will be a step forward for opening the market to independant artists.

  26. [...] The worst thing the Entertainment industry can do is hand over the keys to their content to the IT industry through DRM. [...]

  27. [...] can say “Duh” now, if you haven’t already. So, thank you, Cory. Thank you, Bald [...]

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