This has already been covered ad nasuem, but I thought I should mention Apple's denouncement of DRM last week. Steve Jobs summarily dismissed Apple's DRM as a result of demands from the record labels.
Since Apple does not own or control any music itself, it must license the rights to distribute music from others, primarily the “big four” music companies: Universal, Sony BMG, Warner and EMI. These four companies control the distribution of over 70% of the world’s music. When Apple approached these companies to license their music to distribute legally over the Internet, they were extremely cautious and required Apple to protect their music from being illegally copied. The solution was to create a DRM system, which envelopes each song purchased from the iTunes store in special and secret software so that it cannot be played on unauthorized devices.
I have no doubt that the record labels are concerned with putting unprotected music out there, but Apple is also in no rush to do away with DRM.
There are two sides from which Apple could open up its DRM platform if it chose to do so. First, it could license FairPlay to other device manufacturers so that they could create devices that can play protected AAC files. Second, they could license FairPlay to other music providers (e.g., Rhapsody) so they could provide music that would play on iPods.
So yes, iPods "play music that is free of any DRM and encoded in 'open' licensable formats such as MP3 and AAC" today - but the only DRM protected format they support is not licensable, and the codecs are not extensible.
Apple has decided not to license FairPlay because they "if it licenses FairPlay to others, it can no longer guarantee to protect the music it licenses from the big four music companies." Of course, no Apple statement would be complete without a snide swipe at Microsoft:
Perhaps this same conclusion contributed to Microsoft’s recent decision to switch their emphasis from an “open” model of licensing their DRM to others to a “closed” model of offering a proprietary music store, proprietary jukebox software and proprietary players.
(I already discussed Microsoft's strategy of emulating Apple here, and I think it's a failure).
The following two paragraphs are probably the most important in the press release.
In 2006, under 2 billion DRM-protected songs were sold worldwide by online stores, while over 20 billion songs were sold completely DRM-free and unprotected on CDs by the music companies themselves. The music companies sell the vast majority of their music DRM-free, and show no signs of changing this behavior, since the overwhelming majority of their revenues depend on selling CDs which must play in CD players that support no DRM system.
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. 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. If such requirements were removed, the music industry might experience an influx of new companies willing to invest in innovative new stores and players. This can only be seen as a positive by the music companies.
As I've said countless times before, DRM doesn't work because it harms legitimate users and does nothing to prevent those determined to steal. It is good to know that Apple recognizes this, and it's not insignificant considering the market leverage they have.
The only problem, though, is that Apple says one thing and does another. It sounds nice, but let's be honest - Apple is in no rush to open up their system. This is merely positioning for the time when everyone - including the record labels - recognize that DRM is bad. DRM is on its way out, and Apple doesn't want to be seen as the cause of it. Rather, this is a not-so-subtle attempt to shift blame away from them. When we one day live in a DRM-free world, Apple is hoping we don't see them as the bastions of old.