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February 7, 2007 8:45 pm
Apple’s demand that record companies do away with copyright protection for songs they sell online has set up a bitter battle between the two camps as they prepare for broad-ranging contract negotiations.
Steve Jobs, Apple’s chief executive, published an open letter on Tuesday arguing that selling music online without such protections – known as digital rights management – would make it easier for consumers to listen to music on different devices, boosting the overall market.
However, several music executives on Wednesday dismissed his suggestion as disingenuous and reiterated their argument that inter-operability between devices would be improved if Apple were to license its own DRM to other companies rather than doing away with the protections altogether. They also suggested that Mr Jobs’s true motive was to defuse legal problems in Europe, where Apple is being asked to make iTunes compatible with other devices.
Torgeir Waterhouse, senior adviser to Norway’s Consumer Council, said Mr Jobs was “pushing the ball as far away from himself as he can”.
John Kennedy, chairman and chief executive of the IFPI, the music industry trade group, said of Mr Jobs: “I think he’s expressing some frustration at being the bad guy...and people like the Norwegian government beating him up, and he’s taking it out on us.”
While all the major record companies have experimented with releasing songs in MP3 format, which contains no DRM, only EMI currently appears likely to embrace such a format more widely.
In November, EMI launched the first single from Norah Jones’s new album as an MP3 and called the results “very positive”.
However, Gene Munster, analyst at Piper Jaffray, said: “My bet is, at the end of the day, the record labels want some form of DRM.”
Music companies have long complained that Apple has reaped the majority of the benefit of online music through sales of its iPod device, while the music that fuels it is either traded illegally or under-priced.
Last year, Mr Jobs rebuffed their request to introduce variable pricing on iTunes in place of Apple’s 99 cents per track model.
However, several record executives said on Wednesday they would take a tougher line on variable pricing when their iTunes contracts come up for renewal from this May, and may also push for some share of iPod revenues.
The relationship with Apple could become more complicated as mobile phones gain traction as portable music devices.
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