Apple's DRM-free Music: Balancing Consumer Rights with Accountability

People seem to be surprised by the fact that Apple (AAPL) is tagging its iTunes Plus, DRM-free music with the user name of the person who bought that music. The truth of the matter is that Apple has been tagging all music purchased from the iTunes store with the purchaser's user name for as long as I can remember. Why? Because it needs to live up to its contractual obligations to the record labels, and those contracts say Apple will take measures to ensure that it does not aid and abet wide-spread file sharing of music files.

Apple's DRM implementation seems to precisely mirror what I had suggested back in March 2006, and that Yankee Group reiterated this year. Specifically, it:

1. Raises the bar on quality, yet includes tracking metadata to provide accountability to the labels should widespread copyright violations occur.

2. Allows use on nearly any music player, and thereby complies with most if not all European interoperability laws.

3. Permits casual sharing and viral promotion with friends to grow the music market overall.

Remember, iTunes licenses, which everyone agrees to when they use it, say that these purchases are for personal use only, not public use. So people who feel like their privacy is being violated by this tagging have to ask themselves how their account information is being made public, given they have bought no rights for public use. And for anyone who is truly concerned, the tracks can still be burned to CD and re-ripped without the meta-data.

In short, Apple's DRM-free music strikes a balance between freedom and accountability AND between consumer rights and convenience. If consumers don't like that balance, they can still buy CDs and enjoy them on their iPods. But for the vast majority of consumers, the convenience of one-click purchasing will vastly outweigh the potential downside of having their user name put on the music, just as most consumers prefer trackable credit cards to the anonymity of cash. In my opinion, Apple's move to DRM-free music may not please everyone with its strategy, but it will satisfy enough consumers to grow both its own business and the music business at the same time. And in marketing, that's a home run any way you slice it.

Full disclosure: the author owns Apple stock at the time of writing.

Comments

[ET:]

I'd also like to hear your thoughts in response to the claims brought forth by the EU.

2007 Jun 01 11:56 AM

[editor:]

Please point me to the clause in the EULA that says personal data will be embedded in the file.

ALSO, if tracking information is inserted into the meta data is this not Digital Rights Management? Sure, it's not lock and keys type copy protection but DRM is a broad spectrum of technologies and solutions that includes watermarking and fingerprinting.

2007 Jun 01 06:47 PM