A couple of days ago, this disturbing pro-DRM piece in the New York Times: Austan Goolsbee comments on the French government’s moves to make Apple open up its proprietary FairPlay DRM. N.B.: in the meantime, there is nothing left of the original proposal — from BoingBoing: “[the proposal] has been hijacked by entertainment companies and DRM vendors, and now promises to be one of the worst DRM laws in the world.” But let’s go back to the NYT article:
In their fervor to free listeners from the shackles of their iPods, French politicians have abandoned one of the guiding principles of antitrust economics: penalize companies that harm consumers, not the ones that succeed by building better products.
Well, I think disabling one’s legally purchased files because they’re un-DRMed, taking away consumers’ paid-for rights to stream, and including a clause that allows Apple to change the license agreements for music you’ve purchased is pretty harmful stuff. Not to talk about all the iTunes compatible third-party music players we will never see…
If the French gave away the codes, Apple would lose much of its rationale for improving iTunes. Right now, after the royalty payment to the label (around 65 cents) and the processing fee to the credit card company (as high as 23 cents), not to mention other costs, Apple’s margin on 99-cent music is thin. Yet it continues to add free features to iTunes because it helps sell iPods.
Opening the codes threatens that link. Apple would need to pay for iTunes features with profits from iTunes itself. Prices would rise. Innovation would slow.
I don’t understand the author’s reasoning at all. Over the last year, Apple has indeed been adding features to iTunes that make it easy to put free, user-generated content on your iPod, Podcasts and a video conversion tool being the most important two. These free features however, aren’t added because the iTMS songs are DRM-protected — quite the contrary: Apple sees that it is a good idea to jump on the Long Tail bandwagon and make it easy for people to enjoy user-generated content on-the-go. Advantages? More people buy iPods and Apple has more bargaining power in its talks with record labels.
In addition, imagine Apple would invest the money it now spends for DRM and for lawyers tracking down circumvention/compatibility efforts in R&D instead — I bet we’d see even a better iPod product.
Even worse, sharing the codes could make it easier for hackers to unravel Apple’s FairPlay software. Without strong copy protection, labels would not supply as much new music.
Welcome to 2004: hymn has been around since August of that year.