What's up Steve Jobs' sleeve?

It’s all over the press and on blogs– Steve Jobs has denounced DRMand said that Apple would definitely go participate if the major labels would allow for DRM free music.

I’ve already indicated where I stand on DRM – and more importantly interoperability (which is mostly Jobs’ point also), so of course I am very happy to hear this. And if anyone can shift the direction, Jobs can.

But why would he do that, and particularly why now? Apple has a great closed ecosystem with iPod+iTunes and has 80% of the market. And locking people in/out is a great competitive advantage. So – why do it?

There can only be a couple reasons – and none are altruistic (revenue and margin):  1. he thinks they will make more money if they open their system 2. he thinks Apple will have to open their system anyway, so do a preemptive strike to make them look good 3. he has another product suite in mind that won’t work unless there is an open system (see number 1) 4. he thinks that the major labels are going to do it anyway and he wants out of the DRM contract so that he doesn’t get caught being the old closed system in town.

Or, it could be a couple of those.  For instance:  what if Jobs wanted to create a wireless iPod that could swap songs on any wireless network with any other wireless system that had iTunes v9?  That level of interoperability would require an open standard – and FairPlay wouldn’t cut it.  That system would 1. make them more money, 3. have a new suite that requires it.

Or the other two: with the recent hubbub at Midem, Jobs sees the writing on the wall and wants to be in front of the inevitable removal of DRM (and we’re currently working with EMI on this – wouldn’t it be funny for us to have DRM free contract before Apple?). And couple that with the Norway/EU issues with Apple FairPlay interoperability and doesn’t it sell more iPods if there is no consumer backlash – doesn’t it look better to be a good guy, fighting for the right to iPod?  Or maybe he just doesn’t want to get into a protracted legal situation with multiple Euopean governments (I am sure that can’t be fun).

Although I clearly don’t know what his intention is, he’s only got two motives: 1. Increase Revenue and Increase Margin. And this is one of the steps to doing that.

Not that I am complaining – I just want us to be able to sell as much music as possible – no DRM would really do that – and I don’t mind if Jobs does the work for me.

Posted on February 6, 2007 in Market

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