For the uninitiated, DRM stands for "Digital Rights Management". It is usually some sort of encryption put upon content to restrict the usage of data. For example, DVDs came with encryption that was intended to make sure you didn't copy it. Music from Apple's iTunes music store comes with DRM that only allows you to play it on 5 computers and burn it 10 times (or something like that). DRM on Microsoft's new Zune player allows you to send a song to your friend's Zune, but it will not work after 3 plays or 3 days.

The biggest seller of DRM'd music is Apple with their iTunes Store. They announced early this year that iTunes was now outselling Amazon.com at the rate of 58 songs per second. We all thought the reason they used DRM was because then you can only put your purchased music on an iPod and run it with iTunes. But, apparently that is not the case. Two days ago, the head of Apple, Steve Jobs, published an open letter to the music industry calling for the removal of DRM from music.

Why would Steve Jobs try to throw out the DRM completely? Doesn't it help him sell iPods? Apparently not. The real reason he's realizing this is because of lawsuits and regulations against Apple and iTunes over in Europe. Last week, the government of Norway declared iTunes illegal. There have been lesser statements made against iTunes in a couple other countries. The past couple weeks, Steve has found out what the record labels and movie houses refuse to believe:

Why would the big four music companies agree to let Apple and others distribute their music without using DRM systems to protect it? The simplest answer is because DRMs haven’t worked, and may never work, to halt music piracy. Though the big four music companies require that all their music sold online be protected with DRMs, these same music companies continue to sell billions of CDs a year which contain completely unprotected music. That’s right! No DRM system was ever developed for the CD, so all the music distributed on CDs can be easily uploaded to the Internet, then (illegally) downloaded and played on any computer or player.

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 music companies sell the vast majority of their music DRM-free, and show no signs of changing this behavior, since the overwhelming majority of their revenues depend on selling CDs which must play in CD players that support no DRM system.

To be honest, I'm not so sure that we should let Steve Jobs off the hook this easily. It seems that selling DRM'd music has been to his advantage, and now he looks like he's blaming it all on the record labels. On the other hand, Steve still has a bit of that "free-for-all", hippie spirit, so he could be telling the truth. Either way, he's right.

If DRM did not exist, I might buy more from iTunes. Right now I only buy from iTunes if it's an exclusive I cannot get anywhere else. However, the bigger reason I don't buy from iTunes is the audio quality. Although I usually rip my music at 128k for space-conserving purposes, I expect there to be some day in the not-too-far future when I can re-rip all my CDs in good audio quality. That's why I still buy good ol' CDs whenever possible.

Sometime in the future, the labels will figure out that Steve Jobs is right. If not, they will simply die and independent labels that don't use DRM will become the majors. We just don't know when it will happen.

One of these days we'll talk about the movie industry, DRM, and the AACS encryption system built into HD-DVD and Blu-Ray Disc. Stay tuned.