Steve Jobs, CEO of Apple, wrote a long open letter explaining the history of DRM (Digital Rights Management) and why Apple's iTunes store must sell DRM protected music that only plays on your iPod. Jobs basically blames the record labels and asks European consumers who are frustrated by the iTunes lock-in to direct their anger at them. Read/Write Web disagrees and says there is more Apple can do.
Jobs says that 97% of the music on iPods and other music players is NOT protected by DRM, so the record labels should give up the fight and sell their music without DRM protection. Nice try Steve, but that isn't going to happen.
The real problem for the record labels is that they don't have an effective DRM solution for music sold on CDs. Once the CD is purchased it can be "ripped" into an MP3 type file and easily copied by anyone over the Internet.
The rumor is that Apple is facing anti-trust action from several European countries concerned about the iTunes to iPod lock-in. Apple is in a difficult position and is trying to launch a PR campaign and consumer reaction to convince the European countries to back off.
Steve Jobs makes excellent arguments as to why iTunes must be DRM protected to only play on iPod, and that the iPod itself is not closed to open MP3 music from other sources. He points out that Microsoft's Zune and Sony's music player are in the same situation. The music a consumer buys from Microsoft or Sony will only play on their devices.
This quote from Steve Jobs explains the situation beautifully;
Today’s most popular iPod holds 1000 songs, and research tells us that the average iPod is nearly full. This means that only 22 out of 1000 songs, or under 3% of the music on the average iPod, is purchased from the iTunes store and protected with a DRM. The remaining 97% of the music is unprotected and playable on any player that can play the open formats. 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.
Jobs closes by saying Apple would wholeheartedly embrace a DRM free world.
Much of the concern over DRM systems has arisen in European countries. Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free. For Europeans, two and a half of the big four music companies are located right in their backyard. The largest, Universal, is 100% owned by Vivendi, a French company. EMI is a British company, and Sony BMG is 50% owned by Bertelsmann, a German company. Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly.
For what its worth, I think Steve Jobs is absolutely right. Bill Gates agrees that DRM is broken, in fact he has been saying this for a long time. This is a bold statement on Steve Jobs part because, on the one hand Apple benefits greatly from the iTunes to iPod lock-in, selling more than 2 billion songs for use exclusively on the iPod. On the other hand, Apple is being threatened by European anti-trust agencies to open up the iTunes / iPod lock-in or be banned from selling in those countries.