You've got to hand it to Steve Jobs. Moves he in mysterious ways, his wonders to perform. I've ranked him as a master of mystery and hype for years, but never realizing what other depths of talent he might posses. I'm still digesting the lessons I learned off Machiavelli's classics (Art of War, lies at my desk, bookmark a few pages in), but it doesn't take a genius to marvel at the Machiavellian motions of this spin doctor.
Let's get our facts straight first. Steve Jobs is the CEO of one Apple "fruit company" Inc. His company makes and sells the iPod, which nearly monopolizes the digital audio player market. Now, in a very loose-laced attempt to follow the Gillette Razor Blade approach to customers, they have a nice little store which sells songs to any customer who might wish buy them.
Now, to curb piracy and pacify the rabid record industry watch-dogs (popularly known as the MAFIAA), Apple introduced a DRM solution named FairPlay. The system works and is lenient enough to keep people from breaking it accidentally, which lets the average joe ignore the fact that it exists. The iTunes Music Store however, has protections clauses in its contracts with the recording industry, which render the contract null & void if the DRM is broken and Apple can't fix it within a specified period (a fortnight).
So, as of date, iTMS cannot sell songs which would play on one of my MP3 players. Nor, can they relicense their FairPlay codecs to other vendors - because they are liable for all disclosures - accidental or not. So let us sprinkle some iMagic sparkles and see what happens.
The Pledge: Steve Jobs goes out there and proclaims - I wish for a world without DRM - really, that's what most reports about his open letter convey. Now, why would a man who has benifited the most from the status quo advocate such a step which might break his own monopoly ? The cynic in me, suggests - because he could profit more and in the short term, too. But selling un-DRM'd songs to users of other mp3 players doesn't look like something worth risking your credibility, like this - especially not when the iPod is the king.
The Turn: The Music Industry will NOT say yes. Warner music has already said that Mr Jobs' proposal is "without logic and merit". It would be idiotic of His Steveness to assume the industry would suddenly develop a conscience overnight. But they too want iTunes to sell more songs, even to people who don't have iPods - as it turns out this thought was spelled out in the open letter - because that's what Steve really wants too. Mysteriously, suddenly all the executives smell money in the air and they want it !
The Prestige: The open letter details another alternative - licensing FairPlay to current and future competitors, which isn't technically impossible but rendered practically impossible due to the protection clauses in the contracts with the music publishers. Having led their greed to this obvious alternative, when they suggest it (as their choice) I suspect Apple is about to ask them to rewrite that bit of the contract.
If Steve Jobs had asked the MAFIAA to reconsider their contracts in January, they'd have definitely smiled (like the smile that follows seals and has a fin attached) and asked for a cut off every iPod sold. But February is much warmer for Apple - where they are in a win-win situation. If the industry doesn't let Apple go drm-less (a near impossibility, that) - Apple come crying back to us, "They never let us have any fun !". If they rewrite the contract, letting Apple hawk their DRM, more money for Steve - oh, much much much more money than the extra DRM-free iTMS purchases would fetch. And just in case, they manage to go DRM-free, they'll have a new crowd knocking at their door - not to mention all the kudos for fighting those evil corporations for our rights.
All those options are good for Apple - but for anybody who buys from iTMS, only the last option is any good - Apple: 3, you: 1. But you've got to appreciate style, precision and direction of this so called "attack on DRM". After all, a best defence is a good offence.
Some lesson in negotiation that, woohoo. *But* - if it was that transparent to me - could it still work with RIAA ?
--"No" is often the first word in every negotiation.
posted at: 06:46 | path: /observations | permalink |