The recent article written by Steve Jobs, which claims that Digital Rights Management (DRM) free music is the only way to realize DRM interoperability, has elicited much criticism recently. Steve says that he would sell DRM free music right away if rights holders allowed it. His opinion raised doubts about his sincerity since his article was released at the same time that the discussion of an antitrust ruling against Apple, its iTunes service, and FairPlay DRM was becoming a big issue in Europe. His article somewhat disappointed people, because it did not give a definitive answer to the question of what will drive the interest in and growth of digital music. Instead, the article blamed the music industry for the current pressure related to DRM interoperability because the industry does not allow the distribution of DRM free music. Numerous people in the music industry are posting articles on their blogs every day counterattacking Mr. Jobs' position.
The dispute between Steve Jobs, also known as a music icon, and the music industry certainly has a positive effect, considering that it gives us an opportunity to think about what DRM interoperation means to the digital music industry.
However, the dispute is also disappointing in that it lacks the specific measure that is acceptable for the entire music industry. The focus of the dispute is DRM interoperability. The problem originated with inconvenience for consumers since their hand-held units do not support music services with different types of DRM. To be more specific, their iPods did not play the music files purchased on Napster. Neither consumers nor music businesses want that, but some leading businesses such as Apple are pursuing a business model that is based on the 'Walled garden' strategy. In other words, they are taking advantage of the non-compatible situation as a business opportunity.
DRM permits the use of music rental models
The business models in the digital music industry consist of two different types -- purchased models and subscription models. The proprietary concept, which was commonly used during the analog period, now co-exists with the non-proprietary approach in the digital period. Music businesses are trying the rental business model, which provide usage rights for a certain period or offer digital music as a gift just as one might give a CD to a friend. Those business models are not available without DRM functions since individual content have to be controlled and only accessible with the right of usage.
DRM free music - bad solution for the digital music market
Unfortunately, it seems like we've come a long way with no experience buying DRM free clean music content and it is futile to try to go back to the past again. DRM free music means free of charge to us, and DRM would mean that users could no longer buy a CD and lend it to a friend or buy two CDs and give one to a friend. We have become accustomed to being able to copy and transfer and we are so familiar with the simple digital techniques for doing so that it is not something that can be expected to improve by applying ethical logic.
In the digital period, individual domains are frequently converged together. For example, PC-Mobile convergence enabled digital music files to be transferred and played by mobile phones. For example, in Korea 90% of the mobile phone music market uses side-loading transfer. Furthermore, we will be able to use the set top box, which may be the hub of home domains, to play movies and music on portable devices or other home devices. There have been some security methods applied in the home environment so far, and those security methods are expected to be available for conversion to a digital environment. Does the convergence of home domains with PC and mobile domains help DRM free music develop and become acceptable I would say it is the scenario with the least possibility.
DRM is considered to be a sort of framework that provides the consumers with the general method of purchasing and distributing digital content, and its function is expanding and being experienced by users through various domains.
Therefore, securing DRM interoperability and the user experience by distributing DRM free music cannot be a solution considering the fundamental problems of the digital music market.
Your DRM or mine
IF DRM is necessary for the distribution of digital content, we have to think about what kind of functions and circumstances we have to build in order to satisfy the users. This question is of direct importance to the digital music businesses. In the case of CDs, there are a lot of ways to personally use the purchased CDs. For example, users can play the CDs in a car, a home stereo, and on a portable CD player. They can lend the CDs to their friends or convert them into MP3 files to play back with portable devices. Of course, DRM free music supports such functions as well.
DRMed music services should supply similar experiences, since such experiences are essential and very important for the growth of the digital music industry.
The existing DRMed music service models allow us to play one music file on many different PCs and many different hand-held units that have the same DRM system. However, there has not been a specific answer to the fundamental problem, which is that there are devices with different types of DRM that are not compatible.
As we did not have to worry about whether we had to buy Warner Music tapes or Sony Music tapes to listen to music with a Walkman, it is necessary for us to build the same type of environment for digital music.
There have been specific attempts to solve the problem for the past 3 to 4 years in Korea. There are about 40 music service websites and 6 different proprietary DRM systems, including those of Korea's two top telecom companies, SK Telecom and KTF.
INKA Entworks (www.netsync.co.kr), the company I work for as a CEO, provides a PC-based DRM software called Netsync. Netsync converts encrypted music content into DRM that is supported by the portable device when it is transferred to the unit, so 90% of music websites and 80% of MP3 players are interoperable.
At the end of last year, the Export Import (EXIM) standard, a patent co-owned by INKA and ETRI which specifies the interface between different DRM systems, was registered as a TTA standard. Since SKT and KTF are negotiating with independent music websites for compatibility with their MP3 capable mobile phones, the compatibility limit problems are expected to be settled sooner or later.
We are not trying to apply the interoperation technology between different DRM services to the global market that Europe and the US are leading. The industry requested interoperation between Janus DRM, OMA DRM, and Fairplay DRM. In order to secure interoperability between those 3 DRM systems, approval of the industry is most important. At the moment, the interoperation between OMA and MS is mostly available, but Apple's iPod is not responding to the request regarding interoperation with other DRM.
Consumers pay the bills, and they won't pay without interoperability
In order to provide a digital music experience that satisfies the users, the industry leaders have to pay attention to DRM interoperation. Because DRM is taking the lead in establishing digital user experiences, these experiences must be equivalent to user experiences with analog technology, which have provided great pleasure and satisfaction for a long time. Today, major industry leaders are using the proprietary DRM strategy as their individual business strategies. However, we cannot expect a super set that supports PC, mobile, and home domains all together in this situation.
As convergence of different domains is happening so fast, it is likely to force consumers to buy services that they have no interest in using. The digital music market cannot develop by introducing service models that the consumers do not want, and, if they insist on doing so, nobody will win.
The reason industry leaders have to turn their attention to DRM interoperation is that the short-term success of proprietary DRMbased strategy and services mostly ends with discouraging prospects. For example, Apple's iTunes showed an amazing sales record, and its success has been celebrated by many people since it was launched, but on the other hand, Steve Jobs' recent article indicates the disappointing achievement and uncertain future of iTunes.
Although the situation moves forward with no change, people will still love music as they do now. And there will be some breakthroughs in music services and portable devices with popular features that will be praised by consumers. However, at the same time, we will experience a process of trial and error until we figure out the right way to accomplish our objectives and settle down the culture of enjoying digital music.
The leaders of each industry that have a connection with music, which will always be with mankind, need to make efforts to accomplish DRM interoperation. DRM interoperation does not necessarily mean that competition will die or that there is no difference between music services. Under the situation of DRM interoperation, there will still be competition between the difference of services, functions, design, and the quality of products. Most importantly, the competition will be based on fundamentally stable and potential markets. That is the reason why the industry leaders have to focus on DRM interoperation.
