Music majors hit back at Apple after Jobs' call for digital revolution

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The Independent Online

Major music companies look set to put pressure on the iPod maker Apple to make its proprietary anti-piracy system compatible with music players manufactured by other companies.

Steve Jobs, the chief executive of Apple, has ruffled a few feathers within the music industry after calling on the four major music companies to sell digital music unencumbered with protective software known as DRM, or digital rights management.

Music sold through Apple's iTunes store is encrypted with a proprietary DRM software called FairPlay that stops the purchaser from illegally copying the music. Yet companies including Microsoft and Sony have manufactured rival digital music players that use different proprietary systems that are not compatible with FairPlay. Consumers who buy DRM-encrypted music thus may need to buy the same song repeatedly in order to use different music players.

While Mr Jobs has called on the music majors - Universal, Sony BMG, EMI and Warner Music - to abandon DRM altogether, the music companies have instead called on Apple to make FairPlay compatible with rival music players. John Kennedy, head of the music industry body IFPI, said: "We have been talking about the desirability of interoperability [of DRM systems] for some time... We are pleased that Steve Jobs now wants to address interoperability."

DRM interoperability is likely to be a key topic for discussion when Apple meets the major music labels in early March.

Universal Music declined to comment. But the company recently said: "We continue to support and deploy DRM. Obviously, we remain flexible and open-minded regarding solutions to the interoperability dilemma, but this is something which requires commitment from technology companies as well as the content owners."

An EMI spokesman said: "The lack of operability between a proliferating range of digital platforms and devices is increasingly becoming an issue for music consumers. EMI has been engaging with our various partners to find a solution."

In an open letter published on Apple's website, Mr Jobs said: "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."

Mr Kennedy disagreed. "It should be neither impossible, nor unreasonably burdensome, to implement interoperability whilst maintaining the security of DRM," he said. He noted that banks have interoperable cash machine systems that use DRM, while mobile phones use DRM for voice and billing services without compromising the security of services.

"Is Steve Jobs now advocating that Apple's own software should be open source and that Disney and Pixar sell movies without DRM protection?" Mr Kennedy asked.

Analysts also proved cynical about the timing of Mr Jobs' call for "naked" digital music. Mark Mulligan, an analyst at Jupiter Research, called the statement "a quite clever, but cynical, marketing ploy". Paul Jackson, an analyst with Forrester, said: "Apple is confident it can continue to dominate now the cracks have started to show in the DRM model."

Ironically, Apple has been one of the biggest beneficiaries of DRM. The company is the dominant player in the digital music player space with a near 80 per cent market share and is consequently the largest online music retailer.

Yet websites such as eMusic that sell music without DRM have rapidly gained popularity over the past year, while Apple has started to feel the heat from European regulators concerned that the company is using its DRM to tie iPod customers to iTunes and thwart competition. Mr Mulligan said: "With this letter, Jobs has positioned himself as champion of DRM-free and placed the blame fairly and squarely with the major record labels. Apple can see the tide is turning in Europe."

William Cook, an intellectual property partner with the law firm Simmons & Simmons, said that Mr Jobs' comments were designed to take the heat off the company from European regulators, yet DRM software is separate to the software that Apple uses to tie iPods to the iTunes store. "It is technically possible to have standard copy-protection," he said.

Yet analysts expect music companies to address the growing tide of opposition to DRM-encrypted music which Mr Jobs argued accounted for only 10 per cent of the 20 billion songs that were downloaded in 2006.

EMI has started experimenting with DRM-free music as a promotional tool. A spokesman said: "The results have been very positive and feedback from fans has been enthusiastic."