Apple Removes DRM Shackles. Books Next?

A while back I got a Zune player and tried to load my iTunes library into it. Couldn't. My Mac friend shook his head. "Why didn't you ask me? I could have told you iTunes doesn't sync to non-Apple devices."

For years, Apple has been segregating its iPod and iTunes Music Store customers from the competition. The biggest caveat for iTunes customers has been that many iTunes files have restrictions that keep you from playing them on anything but an iTunes "authorized" device. No Zunes allowed.

Now that's going to change, according to Phil Schiller, Apple's senior vice president for worldwide marketing, who pinch-hit for Steve Jobs as keynoter at Macworld in San Francisco. Apple's "iTunes-Plus" files, which have higher audio fidelity and no restrictions on copying, will soon be available for all the songs in the iTunes Music Store, effectively ending an era of stifling sales and policing audio files.

In fact, a lot's going to change thanks to Apple's decision to end DRM restrictions on music content. "DRM" is jaw-friendly abbreviation for Digital Rights Management, the rules and regulations governing the licensing and exploitation of copyright-protected intellectual property. Brad Stone of the New York Times reports that, "Beginning this week, three of the four major music labels — Sony Music Entertainment, Universal Music Group and Warner Music Group — will begin selling music through iTunes without digital rights management software, or D.R.M., which controls the copying and use of digital files. The fourth, EMI, was already doing so."

Apple also agreed to set more flexible pricing on song downloads, a concession to the major labels. With Apple music sales drooping somewhat under competitive pressure from rivals like Amazon's MP3 store, they have agreed to drop prices on slower moving tunes to 69 cents from its rigid one-99-cents-serves-all policy. But hit and hot songs might go out at $1.29 per download. That price could come down as sales soften. Many other tunes will stay at 99 cents. This approach will goose sales of the backlist while taking advantage of hot items without gouging.

“I think the writing was on the wall, both for Apple and the labels, that basically consumers were not going to put up with D.R.M. anymore,” Stone quotes a market research analyst.

Should we look on the same wall for writing about digital books? Stone's comment about DRM in music might apply to e-books: "Industry pundits have long pointed to D.R.M. as one culprit for the music companies’ woes, saying it alienated some customers while doing little to slow piracy on file-sharing networks."

One reason the e-book business has taken so long to develop robustly is publishers' concern - yea obsession - with copyright. No one can blame them, but by insisting on DRM protocols and withholding content from etailers who did not adhere to rigid copyright protections, much traction was lost in the last decade, and still is. Yet, in cases where DRM is not strictly observed such as the MultiFormat feature at Fictionwise, the leading etailer in the business, piracy has not really been as big an issue as one would think. From our own experience here at E-Reads, piracy seems to thrive when books are not readily available or are available only for prohibitive prices. As soon as those books go up for sale, piracy seems to diminish. Given a choice between a free pirated edition and a legitimate one for sale on a reputable website, consumers will usually choose to pay. A key reason is that they are wary of contracting viruses when downloading from pirate sites.

We are all concerned about Steve Jobs's health and wish him a full and speedy recovery. But whatever is afflicting his hormones has not compromised his mind. His change in policy is smart and will prove a boost to every sector of the digital content business.

RC