MERLIN'S MAGIC, JOBS WANTS TO SHED DRM

Here's a link to an article I wrote a couple of weeks ago, but only ran in the Herald today. It's about the formation of Merlin, a worldwide organise that bands together independent music trade groups to give them better bargaining power when it comes to negotiating online music and mobile phone download deals with media and technology companies. It's a great development for independent labels and their musicians.

From a New Zealand point of view, it should mean that our many independent artists have an easier route to the world market. But in researching the story, I learnt a lot more about the great work Wellington-based Loop Recordings have done on their own, in developing a direct relationship with the iTunes.com music store. This is a great model all local artists can take advantage off directly through Loop - they can pass on any artist's music to iTunes. Once you have your music on iTunes, Myspace's MyStore online music service, are promoting your band through your own website and MySpace listings and backing it up with solid gigging and media work, the need for a band to have a label at all does indeed start to look marginal.

Meanwhile, Steve Jobs has written a very interesting letter on the Apple website, outlining his views on the future of DRM.

He outlines three ways forward: maintain the status quo with each major music player maker (Apple, Microsoft and Sony) all selling music that only plays on their own devices and is encoded with their own flavour of DRM. Secondly, create a universal DRM system that everyone applies to their software adn devices. Sounds like a great idea as it would mean music bought through the Zune Marketplace could play on my iPod. But Jobs thinks the DRM would be cracked quickly once everyone subscribes to it. Thirdly, scrap DRM entirely. An even better idea.

Jobs writes:

"The third alternative is to abolish DRMs entirely. Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat.

"If the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM-free music on our iTunes store. Every iPod ever made will play this DRM-free music."

Wow, what a great scenario. As Jobs points out, while Apple sold 2 billion DRM-protected tracks in 2006, the music industry sold around 20 billion tracks completely DRM-free on CD. So the online music market is unfairly penalised where CDs are sold, ripped and the contents can be placed on the internet for millions of others to download. This shows the inherent flaws in DRM and why it needs to be scrapped entirely. I'm glad Jobs wrote this letter. It's come after Apple has received a lot of flack, especially in Europe, over its closed iTunes-iPod model.

That's something that still annoys me. As an interim measure, Jobs could at least seek to go with a limited version of scenario 2 where he licences Apple's DRM so iTunes music will work on, say, the Creative Zen, the iRiver and the SanDisk Sansa. Screw the Zune, they can learn the hard way that when you're last to the party you can't create yet another closed system.

Ultimately however, DRM has to go, and Jobs has pointed the way forward. I hope other tech luminaries back his stance and enough pressure is able to be applied to the music industry to make it come to pass.