In early 2002 Sony and Universal started shipping CDs encoded with copy-protection systems that made them unreadable to computers' optical disc drives. The idea was to prevent users from ripping the music--no ripping meant no file sharing. The labels tried to cut off online music piracy at the pass, but all they did was kick off the latest in a long series of struggles between copyright holders and the general public.
Sony's system, called key2audio, was one of the record industry's earliest attempts at preventing illegal file sharing by limiting the ways legitimate customers could use the music they'd bought. These days the battleground isn't the CD but the digital music file (EMI, the last label to manufacture copy-protected discs, announced in January that it was discontinuing the practice), and the technology used to lock down music has acquired a new name--digital rights management, or DRM. In order to deal with the big labels, online music stores have to agree to develop a DRM system to regulate the files they sell, which has much the same effect as a scheme like key2audio--it curtails the buyer's ability to make copies and prevents a file from playing on certain devices. Files bought from the iTunes store, for instance, won't play on Zunes--and files from the Zune Marketplace won't play on iPods.
This may all be changing, though, and sooner rather than later. On February 6, Apple CEO Steve Jobs published an essay titled "Thoughts on Music" on his company's Web site. The piece begins predictably enough, with Jobs boasting about Apple's "stunning global success" in the digital-music field--with more than two billion songs sold worldwide, the iTunes store accounts for about 80 percent of total sales. But by the time he wraps up he's made a persuasive case for a transformation that until now has seemed like the sort of thing only idealistic activists bother to hope for: that the labels "abolish DRMs entirely." And he's not alone--a recent survey by the Internet business intelligence firm Jupiter Research shows that a majority of music-industry executives, convinced that DRM hurts sales and doesn't work, shared Jobs's opinion even before he published it. Over the past five years the major labels and their customers have been trapped in an asymmetrical conflict fought in courtrooms and in lines of software code, but it's starting to look like the little guys might actually win--the big guys might finally bring their practices into line with common sense and popular opinion.
Jobs puts his finger on DRM's crucial weakness by pointing out that "there are many smart people in the world, some with a lot of time on their hands, who love to discover such secrets and publish a way for everyone to get free (and stolen) music." Key2audio was cracked in a couple weeks, and the hack that broke it was basically a well-placed stroke with a Sharpie near the edge of the CD face. In the DRM arms race, the programmers who devise encryption schemes are outgunned by the code breakers at every step: the minute a new system goes public, an interconnected hive mind of thousands of hackers goes to work on it. Patching up the cracks gets expensive fast, and no business likes throwing good money after bad.
DRM is an especially unwise investment now because album sales are down overall, despite the enormous expansion of the online market. I don't trust the Big Four's numbers regarding the income they've lost to file sharing, but it's definitely taking a bite: a huge launch week followed by a vertiginous drop in sales is becoming the norm for new releases, which is pretty strong evidence that once a critical mass of consumers buys an album, people just start passing it around. Jay-Z's Kingdom Come, for instance, sold 680,000 copies its first week and 139,000 the next--an 80 percent decrease in sales and only slightly more extreme than what many big releases are experiencing. The uncertain financial situation created by the changing music marketplace means labels that insist on fighting the DRM battle are committing money they may not have to spare. No DRM scheme has ever gone unbroken--including, as Jobs admits, Apple's own FairPlay system--and while Sharpies are cheap, DRM schemes cost millions to develop.
If you happen to sympathize with the recording industry--or, more sensibly, with the artists whose royalty checks are getting eaten by the online black market--you might feel the labels are justified in defending their product. It's true that labels have the right to protect themselves from illegal copying, but what they rarely mention is that under current copyright law consumers have rights too--including the right to make a limited number of copies of music they've purchased. Industry spokespeople who blithely equate such fair-use copying with bootlegging have probably never crashed a whole hard drive full of music files that, thanks to DRM, they had no way of backing up.
So far FairPlay is one of the only DRM schemes to grant buyers even a few of the rights they deserve, allowing protected files to be copied to five different computers and an unlimited number of iPods. But Apple, which ordinarily takes pains to seem touchy-feely, has used some pretty shady tactics to implement the system--unsuspecting users would find new restrictions applied to their music after an automatic iTunes update, for example. Other companies have been far nastier with their DRM, in keeping with the music industry's increasing tendency to see the public not as potential customers but as potential pirates. In 2005 Sony sold 2.1 million CDs crippled by Extended Copy Protection (XCP), which surreptitiously installed a malicious piece of software called a rootkit on the user's hard drive. It worked to prevent some kinds of copying, but as a side effect it compromised the security of any infected computer, leaving it wide-open to exploitation by hackers--at the time, security researcher Dan Kaminsky found at least 568,200 networks affected by XCP's rootkit. And music from all the infected CDs made it onto peer-to-peer networks anyway, where it could be downloaded illegally but safely. All you had to do was run a regular CD player into your computer's audio input and use a sound program to record it.
But complaining about these things is pointless, now that the industry's 800-pound gorillas are edging toward admitting that DRM has been one big failed experiment. Even before Jobs's "Thoughts on Music" hit the Web they were flirting with DRM-free digital distribution, joining the dozens of indies that had already embraced it: Sony got into podcasting, for instance, and along with a few other labels made a handful of non-DRM files available through Yahoo. And it's not like they haven't already worked with unlocked formats--aside from ill-advised experiments like key2audio and XCP, the CD has always been open. As Jobs writes, "In 2006, under 2 billion DRM-protected songs were sold worldwide by online stores, while over 20 billion songs were sold completely DRM-free and unprotected on CDs by the music companies themselves."
The truth is that we don't have to pay for music anymore. The way albums get leaked these days, the entire record-buying public could jump over to file-sharing networks and tell the labels to fuck themselves. We're voting with our dollars by spending them at all. Right now digital sales are less than 10 percent of the total, but they're increasing almost exponentially--as processor speed and storage density continue to skyrocket and sound files reach CD quality, digital music will completely replace actual physical discs. If the major labels want to survive the transition, they're going to have to do it our way.
For more on music, see our blogs Crickets and Post No Bills at chicagoreader.com.