Jobs, RIAA tit for tat on DRM underscores fragmented music biz

The fight against digital rights management gained an unlikely backer as Apple Inc. CEO Steve Jobs called for record companies to offer music without anti-piracy software.
Jobs, in an open letter posted on Apple’s Web site, claimed that a variety of DRM offerings have resulted in a fragmented market, serving only to slow digital music sales. While the overwhelming bulk of music revenues are driven by songs sold without copy protection-in the form of CDs-record labels continue to demand that online vendors sell tunes wrapped in anti-piracy offerings that “haven’t worked, and may never work” to stop pirated content, according to Jobs.
“So if the music companies are selling over 90 percent of their music DRM-free, what benefits do they get from selling the remaining small percentage of their music encumbered with a DRM system? There appear to be none,” Jobs wrote. “If anything, the technical expertise and overhead required to create, operate and update a DRM system has limited the number of participants selling DRM-protected music.”
Jobs’ essay is undoubtedly an effort to scrub Apple’s iTunes’ image: The missive comes two weeks after a Norwegian official found iTunes to be illegal because its DRM prohibits playback on rival devices, and the online storefront has come under scrutiny for similar reasons in other European markets. However, the CEO dismissed calls for Apple to license its FairPlay DRM solution-which could allow non-Apple music devices to play iTunes music-claiming that such a move would only give pirates more opportunities to hack the copy-protection software.
The Recording Industry Association of America pounced on Jobs’ statement, challenging the iPod maker to make its DRM wrapper available.
“We think (licensing FairPlay is) a great solution,” RIAA CEO Mitch Bainwol chided in a prepared statement. “We have no doubt that a technology company as sophisticated and smart as Apple could work with the music community to make that happen. This would enable the interoperability that we have been urging in the marketplace for a very long time.”
Both Jobs’ letter and Bainwol’s response underscore the increasingly fragmented DRM market, which has expanded into wireless as mobile music just begins to grow legs. Verizon Wireless uses anti-piracy technology from Microsoft Corp., for instance, for its full-track music download service, while Sprint Nextel Corp.’s full-track download store uses proprietary technology from Groove Mobile.
Oddly, wireless operators may be well-positioned-if not exactly inclined-to help solve the problem. While the mobile industry continues its two-year standoff with MPEG LA, which holds patents for Open Mobile Alliance-supported DRM technology, content owners are looking to carriers to somehow find a way to embrace new anti-piracy software and create a universal platform that moves beyond wireless into the broader arena of digital music. “Although they haven’t shown themselves particularly attracted to an open environment, wireless operators have the potential to be very important in the marketplace,” iSuppli Corp. analyst Mark Kirstein said recently.