EMI goes DRM-free at higher pricepoint

EMI has been rumored for months to start licensing DRM-free tracks at a higher pricepoint. From today’s press release:

London, 2 April 2007 — EMI Music today announced that it is launching new premium downloads for retail on a global basis, making all of its digital repertoire available at a much higher sound quality than existing downloads and free of digital rights management (DRM) restrictions.

Apple’s iTunes Store (www.itunes.com) is the first online music store to receive EMI’s new premium downloads. Apple has announced that iTunes will make individual AAC format tracks available from EMI artists at twice the sound quality of existing downloads, with their DRM removed, at a price of $1.29/€1.29/£0.99. iTunes wil continue to offer consumers the ability to pay $0.99/€0.99/£0.79 for standard sound quality tracks with DRM still applied. Complete albums from EMI Music artists purchased on the iTunes Store will automatically be sold at the higher sound quality and DRM-free, with no change in the price. Consumers who have already purchased standard tracks or albums with DRM will be able to upgrade their digital music for $0.30/€0.30/£0.20 per track. All EMI music videos will also be available on the iTunes Store DRM-free with no change in price.

When people a while ago requested that Apple start selling DRM-free content from independent labels, some Apple fans argued that Apple couldn’t do this because it would break consistency in iTunes and create consumer confusion. Now Apple is going to be selling some DRM-free music at a higher price point. So much for the consistency and confusion argument! It will be interesting to see how this offering will be branded in the iTunes Store (DRM-free or “Higher Quality”?).

EMI is the smallest of the four major record labels and is in the worst financial shape. More conservative labels such as Universal and Sony BMG are unfortunately not likely to follow anytime soon.

Will Steve Jobs follow up with “Thoughts on Movies”? Highly unlikely, although the thought of a Disney director calling for an end to video DRM is entertaining! Steve’s main argument in “Thoughts on Music” was that CDs don’t have DRM. The studios have always insisted on copy protection (Macrovision, CSS, AACS) and that’s not likely to change in our digital lifetime. Perhaps Steve will start drafting another manifesto after the Apple TV has 90% market share 😉

Update: Steve’s Thoughts on Movies during the webcast:

Q: I take it then that you are going to be advocating the removal of the DRM of the videos you sell on iTunes. Any particular [inaudible] you could do that now with Disney given your involvement with the Disney company?

A: You know, video, uh… I knew I’d get that question today. Video is pretty different than music right now because the video industry does not distribute 90 percent of their content DRM free; never has, and so I think they are in a pretty different situation and so I wouldn’t hold the two in parallel at all.

Apple TV first impression

I dropped by the Apple Store the other day to check out the Apple TV. I was disappointed with how the Apple TVs were demoed in the store. They were sharing the same Internet connection as all the Macs and due to the bandwidth being completely saturated by people browsing the web, it took several minutes before trailers would load on the Apple TVs. The Apple TVs should have been on a separate connection or the trailers should have been cached locally.

Another issue was the disappointing video quality. While the menus and artwork were crisp and clear, the video quality of the movies and trailers was horrible. The Apple TVs should have been configured to stream the 720p trailers instead of the lower resolution ones.

I felt that the remote for the Apple TV was too small and was not happy with the way video seeking was implemented. I think most people would prefer using a scroll wheel for video seeking.

Out of the box the Apple TV is very limited, but there’s a lot of info over at AwkwardTV on how to make it useful.

New notebook?

I’m in the market for a new notebook. I’ve only ever owned ThinkPads (except for a brief fling with a PowerBook a couple of years ago).

My current ThinkPad T42p has served proudly in the DRM wars and is entering retirement. It still does its job, but I want a notebook that’s not as heavy.

I’ve been considering getting the ThinkPad X60t as it’s smaller and lighter than the T60. Unfortunately, it’s currently available from Lenovo with only a L2400 CPU and I haven’t been able to find much info on how well it runs Linux. Also, there are reports of screen ripple issues. I was worried that quality would go down when Lenovo bought IBM’s PC division… and on a related note, the new ThinkVantage and volume buttons are hideous!

Should I switch to a MacBook Pro?

DAAP Licensing

DAAP (Digital Audio Access Protocol) is a protocol defined by Apple and used for iTunes streaming. Apple has licensed the DAAP protocol to at least one company: Roku. Their SoundBridge product is a networked music player that streams music from your computer. Thanks to Bonjour and DAAP the SoundBridge can stream music from an iTunes library without any configuration necessary.

The first version of DAAP was reverse engineered. In response, Apple added hashing of secret values to the next version of DAAP to block non-iTunes clients from connecting to the new version of iTunes. The new version of DAAP was also reverse engineered.

When Apple released iTunes 7 last September, they changed the secret hashing. You would think they would have informed their DAAP licensees of this in advance and provided them with updated DAAP documentation (they wouldn’t need to reveal the release date of the new iTunes version).

Not so.

According to this forum post by Roku’s Mike Kobb they were not given advance notice, let alone any updated documentation. It appears that it took Apple several weeks to supply Roku with updated DAAP documentation.

In light of this, it is not surprising that Steve Jobs is claiming that licensing FairPlay is not feasible and using bogus arguments to support his claim. Licensing FairPlay is quite feasible, it’s just that Steve doesn’t want to do so. Of course, from a business perspective I don’t mind 😉

I knew last year that Apple had licensed DAAP to Roku, but I didn’t learn until today that Apple had stabbed Roku in the back. Thanks to snorp (developer of ipod-sharp and other cool code) for pointing this out to me.

Steve on licensing FairPlay

This is the 3rd and last post about Steve’s “Thoughts on Music” 🙂

However, a key provision of our agreements with the music companies is that if our DRM system is compromised and their music becomes playable on unauthorized devices, we have only a small number of weeks to fix the problem or they can withdraw their entire music catalog from our iTunes store.

The most serious problem is that licensing a DRM involves disclosing some of its secrets to many people in many companies, and history tells us that inevitably these secrets will leak.

Apple has concluded that if it licenses FairPlay to others, it can no longer guarantee to protect the music it licenses from the big four music companies. 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.

Let’s look at the real world outside the Reality Distortion Field:

  • Microsoft’s Windows Media DRM 10 (marketing name PlaysForSure) has not had more security breaches than FairPlay despite the fact that it has been licensed to dozens of companies.
  • Microsoft’s decision to make the Zune DRM a closed system was a business decision and had nothing to do with DRM security. PlaysForSure is still in the market place and will be for the foreseeable future. Content owners are still authorizing content to be sold with PlaysForSure. In fact, WalMart launched a new movie download store (don’t click the link if you’re using Firefox unless you’re into abstract art) using PlaysForSure today.
  • Steve’s misleading statistics

    In his article “Thoughts on Music” Steve Jobs argues that people are not really locked into the iPod.

    Through the end of 2006, customers purchased a total of 90 million iPods and 2 billion songs from the iTunes store. On average, that’s 22 songs purchased from the iTunes store for each iPod ever sold.

    Its hard to believe that just 3% of the music on the average iPod is enough to lock users into buying only iPods in the future. And since 97% of the music on the average iPod was not purchased from the iTunes store, iPod users are clearly not locked into the iTunes store to acquire their music.

    Yes, hard to believe, until you realize that Steve is using misleading statistics. There may be 90 million iPods sold, but not all of them are currently in use. Furthermore, it’s the number of iTunes Store customers and average sales per customer that’s relevant, and Apple has never disclosed these figures.

    Many iPod owners have never bought anything from the iTunes Store. Some have bought hundreds of songs. Some have bought thousands. At the 2004 Macworld Expo, Steve revealed that one customer had bought $29,500 worth of music.

    If you’ve only bought 10 songs, the lock-in is obviously not very strong. However, if you’ve bought 100 songs ($99), 10 TV-shows ($19.90) and 5 movies ($49.95), you’ll think twice about upgrading to a non-Apple portable player or set-top box. In effect, it’s the customers who would be the most valuable to an Apple competitor that get locked in. The kind of customers who would spend $300 on a set-top box.

    Steve’s Thoughts on Music

    Steve Jobs has written an article titled “Thoughts on Music” in which he blames DRM entirely on the labels. Steve claims Apple wants to sell DRM-free music but the labels won’t let them. This of course flies in the face of reality. From an article in the NYTimes last month:

    Among the artists who can be found at eMusic are Barenaked Ladies, Sarah McLachlan and Avril Lavigne, who are represented by Nettwerk Music Group, based in Vancouver, British Columbia. All Nettwerk releases are available at eMusic without copy protection.

    But when the same tracks are sold by the iTunes Music Store, Apple insists on attaching FairPlay copy protection that limits their use to only one portable player, the iPod. Terry McBride, Nettwerk’s chief executive, said that the artists initially required Apple to use copy protection, but that this was no longer the case. At this point, he said, copy protection serves only Apple’s interests .

    Josh Bernoff, a principal analyst at Forrester Research, agreed, saying copy protection “just locks people into Apple.” He said he had recently asked Apple when the company would remove copy protection and was told, “We see no need to do so.”

    Apple’s statement is a detailed treatise on the subject, compared with what I received when I asked the company last week whether it would offer tracks without copy protection if the publisher did not insist on it: the Apple spokesman took my query and never got back to me.

    It should not take Apple’s iTunes team more than 2-3 days to implement a solution for not wrapping content with FairPlay when the content owner does not mandate DRM. This could be done in a completely transparent way and would not be confusing to the users.

    Actions speak louder than words, Steve.

    iHandcuffs

    Arstechnica published an article earlier this week titled “Why DRM’s best friend might just be Apple Inc.“. Every time someone points out that Apple is a supporter of DRM, the Mac faithful come out of the woodworks to promote the delusion that Apple does not really support DRM and that they’re simply forced to use DRM by the record labels and studios. This of course flies in the face of reality:

    • Apple is refusing to open up FairPlay to other companies.
    • Apple is applying FairPlay to files from record labels that do not require DRM.

    From a NYTimes story today titled “Want an iPhone? Beware the iHandcuffs“:

    Among the artists who can be found at eMusic are Barenaked Ladies, Sarah McLachlan and Avril Lavigne, who are represented by Nettwerk Music Group, based in Vancouver, British Columbia. All Nettwerk releases are available at eMusic without copy protection.

    But when the same tracks are sold by the iTunes Music Store, Apple insists on attaching FairPlay copy protection that limits their use to only one portable player, the iPod. Terry McBride, Nettwerk’s chief executive, said that the artists initially required Apple to use copy protection, but that this was no longer the case. At this point, he said, copy protection serves only Apple’s interests .

    Josh Bernoff, a principal analyst at Forrester Research, agreed, saying copy protection “just locks people into Apple.” He said he had recently asked Apple when the company would remove copy protection and was told, “We see no need to do so.”

    Apple’s statement is a detailed treatise on the subject, compared with what I received when I asked the company last week whether it would offer tracks without copy protection if the publisher did not insist on it: the Apple spokesman took my query and never got back to me.

    From a 2004 blog post by Fred von Lohmann at the EFF titled “FairPlay: Another Anticompetitive Use of DRM“:

    On a panel a few weeks ago, I asked the head lawyer for Apple’s iTunes Music Store whether Apple would, if it could, drop the FairPlay DRM from tracks purchased at the Music Store. He said “no.” I was puzzled, because I assumed that the DRM obligation was imposed by the major labels on a grudging Apple.

    When will the Mac faithful stop deluding themselves?

    iPhone

    I’ve known that the iPhone was coming since my trip to Cupertino in January last year (didn’t know any details though) and now it’s finally announced.

    Cons:

    • Battery is not removable (AFAIK).
    • No 3G. It’s being released in June 2007 and no 3G… Web browsing over EDGE is not a pleasant experience.
    • Closed – no SDK for 3rd party development.
    • In the US, a 2 year Cingular contract will be required.
    • No access to the iTunes Store from the phone and no syncing over WiFi.
    • Camera is only 2 megapixels.

    Other than that, I can’t wait to try one. Hopefully the lack of tactile feedback is not going to be an issue.

    iTunes FUD

    The Financial Times has an article out about some of the movie studios trying to force Apple to increase the FairPlay restrictions.

    But the studios are concerned about growth of digital piracy, which currently costs the film industry $3.2bn a year. They want Apple to make changes to the way iTunes works before they do a deal.

    Specifically, they object to the fact that you can sync to an unlimited number of iPods.

    Currently, content on iTunes can be uploaded to an unlimited number of iPods. This means people can freely copy music content by “synching” their iPods with their friends’ computers.

    The studios are putting pressure on Apple to limit the number of iPods that can be used by iTunes on a particular computer. Limiting the number of video iPods used by any one computer to four or five will, they believe, deter professional content pirates.

    That’s a huge vehicle for piracy! If it was actually true, that is. The notion that professional pirates (or any pirates for that matter) rely on this iTunes capability is ludicrous.

    An iPod is paired with a single iTunes library. If I sync my iTunes library to your iPod, that content will get wiped out as soon as you sync your own library to your iPod.

    Two facts conveniently ignored by the FT journalist:

    1. iTunes doesn’t let you sync files from an iPod to a computer except for FairPlay files and you need the username and password for the account the FairPlay files were purchased under.
    2. The fact that 3rd party tools exist to let you sync any file from any iPod to any computer does not matter. Why? Because a copy of a FairPlay file is useless without the username and passord for the account the file was purchased under.

    To share a FairPlay file you also have to share the username and password. I doubt this happens to any measurable extent:

    1. Your credit card is linked to your username and password (meaning someone else will be buying Britney Spears songs with your money, and more importantly, in your name).
    2. Someone else will be using up one of your 5 computer authorizations.