By Damian Boyd-Boffa

We’ve been monitoring developments in Digital Rights Management (DRM) usage for the past six months, with only a few notable events. Since last week’s publication of Steve Jobs’ open letter regarding his dissatisfaction with DRM’s ability to hinder pirating – and his view that it really only hinders music sales – there has been a flurry of activity. The shortcomings of DRM have long been discussed in the blogosphere, but not until a voice as powerful as Jobs’ espoused this view did it become a truly public and commercial debate.

Prior to Jobs’ statement, there were only a few notable DRM stories involving large, influential companies, but mostly a lot of chatter from tech-savvy individuals who essentially discussed what Jobs ultimately penned last week as his views on DRM. Sony BMG previously garnered what little DRM-related attention there was to be had with two contradictory moves by the company. The first was releasing CDs with DRM protection which, unbelievably, installed software that embedded itself in a computer’s operating system and disabled CD drives when removed – essentially a corporate installation of malware. This led to a recent lawsuit requiring Sony to pay every user who had purchased one of these CDs. Sony followed this abusive use of DRM by releasing a DRM-free song through Yahoo Music. Many predicted this to be the beginning of the end for DRM. Perhaps. Still, nothing much happened in this area until Jobs, the most influential purveyor of digital music, attracted widespread and lasting attention.

Jobs’ letter forced awareness on the matter of DRM and prompted responses from other influential players in the digital music arena. The most relevant responses come from music industry executives, who ultimately determine how digital music is released. Warner Music vehemently opposed Jobs’ suggestion of DRM-free digital music, while EMI recognizes issues with DRM and has experimented with a few unrestricted releases (this stance of EMI’s has long been rumored in the blogosphere, but again is only now receiving a widely syndicated official response). Generally there is an ambiguous divide between companies that support DRM (Warner, Sony, the RIAA), those that don’t (EMI, Yahoo Music, SanDisk), and those whose representatives are publicly opposed to its use yet still propagate the technology (MSFT and Bill Gates, AAPL and Steve Jobs). With this much divided opinion it’s hard to predict what will ultimately happen with DRM technology, but it’s clear that a shift is underway.

So what are Jobs’ potential motives? The general criticism is that there is no harm in him taking this strong stance, considering the power he inherently wields and he obtains a favorable image as a critic of burdensome DRM. The substantial motivation to do away with DRM, not surprisingly, is apparent in the benefits it would provide Apple. It could bolster iPod sales because compatibility issues with other music stores will go away. Plus, iTunes sales would rise, as this music becomes usable on any digital music player. Additionally, ditching DRM would effectively end numerous lawsuits Apple is facing over monopolistic practices due to a lack of interoperability between players as a result of DRM.

One has to wonder, if Jobs is this opposed to DRM, why doesn’t he release Disney movies on iTunes free of this protection? As a member of the board and the largest shareholder, he would seem to have the necessary influence, but without a comparable outcry against DRM on digital video, it seems he doesn’t have the impetus.

Tags: Analyzing Consumer Generated Media, Consumer-Generated Media (CGM) //