Apple: Record labels should drop DRM

By Michael Liedtke

updated 11:39 a.m. ET Feb. 7, 2007

SAN FRANCISCO - Apple Inc. indicated it would open its iTunes store to other portable players besides its ubiquitous iPod if the world's major record labels abandoned the anti-piracy technology that serves as the industry's security blanket.

Steve Jobs, Apple's chief executive, made the case for abolishing the protections known as "Digital Rights Management," or DRM, in an open letter posted Tuesday on the company's Web site.

The essay, dubbed "Thoughts on Music," cited the anti-piracy technology as the main reason music sold through iTunes can't be transferred to other portable players besides the iPod.

If not for the DRM safeguards, Jobs asserted that Apple would be able to create a more flexible system that would allow iTunes music to work on other devices, such as Microsoft Corp.'s recently introduced Zune. (MSNBC.com is a Microsoft-NBC Univeral joint venture.)

Jobs suggested that consumers unhappy with the status quo should urge the world's four largest labels — Universal Music Group, EMI, Sony BMG Music Entertainment and Warner Music Group — to sell their online catalogs without the DRM restrictions. Those four labels distribute more than 70 percent of the world's music.

"Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace," Jobs wrote. "Apple will embrace this wholeheartedly."

CNBC VIDEO Jobs wants music unlocked Feb. 6: "On the Money's" Jim Goldman reports on the Apple CEO's challenge. CNBC

ITunes' incompatibility with other music players has drawn fire in Europe, where Apple's limitations have been branded anticompetitive. Over the past eight months, consumer rights and protection groups in Germany, France, Norway and the Netherlands have lodged complaints against Cupertino-based Apple.

Raising a bit of irony in his dissertation, Jobs noted that three of the four largest music labels are owned by European interests.

Even if iTunes remains incompatible with other players, Jobs argued that most consumers can still easily load their digital music on just about any computing device that they desire.

That's because most consumers already own a library of CDs unencumbered by DRM restrictions or acquire other music files, either legally or illegally, that aren't copyright protected.

Based on Apple research released for the first time Tuesday, Jobs estimated that just 22 out of every 1,000 songs stored on an IPod were purchased from iTunes.

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