Arcadian Visions

Nate Anderson at Ars Technica says that Apple is singlehandedly keeping DRM alive in 2007. I disagree completely: If DRM is to die in 2007 it will be because of Apple. Everyone else’s DRM scheme is failing because Apple controls so much of the digital download market, leaving anyone who wants to sell content without going through Apple only the option of selling it unprotected. If FairPlay were open to partners, then I believe that most distributors would happily adopt it at this point to get onto those precious iPods. Not only are would-be competitors in the area of distribution throwing in the DRM towel, content producers themselves are more likely to give up on DRM because, in today’s market, selling DRM protected content means giving Apple control over pricing.

DRM has been very good to Apple. By selling DRM content, Apple locks buyers into their hardware as long as the DRM scheme is viable. DRM has allowed Apple to create a switching cost that is, for many customers, now higher than the cost of switching from a PC to a Mac as a general computer (thanks to Boot Camp and Parallels).

If Apple had been less successful with the iPod and iTunes, we might have seen customers revolt at an ecosystem of incompatible DRM schemes. Had Apple been less successful, there could have evolved an industry-wide DRM standard (for whatever industry one wishes to consider) which would let content producers sleep more soundly at night, and let digital distributors compete on their competencies. But Apple has been successful, phenomenally so. There has been no customer revolt because there aren’t any DRM compatibility issues as long as you stay true to the iPod/iTunes path. There is no industry-wide standard, because Apple, through its success, has effectively become the industry.

So here we are, back to the future. Competitors looking to negate Apple’s advantage need to negate DRM. MP3s, here we come.