Apple Inc. is dropping the digital copyright locks from most of the songs it sells through iTunes, a move that could prove to be a death blow for the music industry's attempts to control how consumers buy and listen to music.
With the revolutionary iPod and the iTunes music store, Apple rewrote the rulebook for the music industry as labels struggled to adjust to the new digital reality of file-sharing and copyright violations brought about by the Internet.
Today, Apple is the largest retailer of music in the U.S. with more than five billion songs sold and many will see the company's abandonment of digital rights management (DRM) technology as further proof that digital copyright locks do little to prevent illegal file-sharing.
Are you more likely to buy music from iTunes now that Apple has done away with copyright protection? Take our poll at globetechnology.com
Still, ever since the launch of iTunes in 2003, songs that were bought through Apple's digital music store contained code that prevented them from being used on non-Apple devices, handcuffing users who wanted to transfer the music to CDs or multiple computers.
Apple's decision to drop the copyright locks will open doors for other technology companies building music players whose devices were previously incompatible with iTunes music, but also will help Apple prevent bleeding its customers to competitors in the digital music space, such as Amazon.com Inc. and Rhapsody, which already offer sizable catalogues of DRM-free music.
“Apple remains the 800-pound gorilla and nothing is going to change that at this point,” said Josh Martin, a technology analyst at Yankee Group in Boston. “They're doing things to appear more open, which is what they're going to be, but at the same time they can afford to do that because they dominate the market.”
All four of the major record companies – Universal Music Group, Sony BMG, Warner Music Group and EMI – as well as a number of independent labels have agreed to remove DRM software from their iTunes offerings.
Apple made the announcement at the annual Macworld Conference & Expo in San Francisco, and also said it plans to begin offering music at differing prices through iTunes.
Apples now charges 99 cents for nearly every song, but beginning in April, the price will be determined by what the music labels charge Apple for them. There will be three prices: 69 cents, 99 cents and $1.29. Most full albums will still cost $9.99.
Apple said more songs will be slapped with the 69-cent price tag rather than $1.29. Analysts, however, say the music labels, and therefore Apple, will likely charge more for hits because the vast majority of songs sold through iTunes are popular single tracks.
A spokesman for Apple in Canada said the new pricing structure will also apply to the company's Canadian iTunes store.
Although Apple chief executive officer Steve Jobs called for an end to copyright protection software in music as far back as February, 2007, the labels weren't willing to budge.
Some analysts say the labels' unwillingness to drop the digital locks stemmed from a dispute with Apple over pricing; the labels wanted Apple to let them charge more than 99 cents for certain songs, while Apple insisted it wouldn't change its pricing structure.
Apple's decision to ditch DRM is unlikely to have a measurable effect on the amount of pirated music being shared online, but rather shows how the music industry's policy of restricting what consumers could do with their music was failing, according to Michael Geist, a professor of e-commerce and Internet law at the University of Ottawa.
“The writing has been on the wall for DRM as a failed strategy for several years now,” he said.
“Whether or not it makes a significant difference to the industry at this point is open to question, but what it does show is that the long-time strategy of locks and lawsuits that the industry adopted several years ago has been terminated, out of failure.”
In December, the Recording Industry Association of America revealed that it was discontinuing its practice of suing Internet users that it caught illegally sharing copyrighted music over peer-to-peer networks.
Apple's decision to drop DRM and the RIAA's cessation of its litigious ways could have implications for Canadian copyright legislation the next time the federal government attempts to update the aging Copyright Act of Canada.
“It certainly undermines the argument that it's essential to have this kind of legislation to protect the digital lock business model,” Prof. Geist said.
