Apple's Eddy Cue says early success of iPod, iTunes hinged on DRM
Testifying in an antitrust lawsuit on Thursday, Apple SVP of Internet Software and Services Eddy Cue said the initial success of iPod and iTunes was reliant on digital rights management due to an onslaught of attempts from hackers to crack the ecosystem.
During his hours-long testimony, Cue made constant use of the terms "hack" and "hacker" to drive home the notion that DRM was a necessary tool in keeping music labels on board with iTunes.
"All these other guys that tried the approach of trying to be open failed because it broke," Cue said, according to in-court reports from CNET. "There's no way for us to have done that and have the success that we had."
Cue offered new insight on Apple's deals with record labels, saying, "If a hack happened, we had to remedy that hack within a certain time period or they [the labels] would remove all their music from the store."
Apple is accused of inventing a monopoly between 2006 and 2009 with its closed iPod-iTunes ecosystem protected by FairPlay DRM, which in turn allowed the company to sell iPods at inflated prices, harming consumers. In court yesterday, attorneys for the plaintiffs claimed Apple intentionally deleted music from users' iPods if the content was purchased through competing digital stores.
Apple has taken the stance that DRM was the only way to keep iTunes protected from hackers, characterizing it as a necessary evil.
"Steve was mighty upset with me and the team whenever we got hacked," Cue said, referring to late Apple cofounder Steve Jobs.
On Tuesday, emails and a videotaped testimony from Jobs revealed Apple was "very scared" of running afoul of its precarious music label contract terms. Jobs touched upon a lynchpin issue during his deposition, saying frequent iTunes updates were rolled out as "hackers" found new workarounds.
A main contention in the case is that Apple updated its iTunes software to stop users from playing back songs from competing music stores, specifically RealNetworks' RealPlayer storefront. RealNetworks rolled out Harmony, which effectively bypassed FairPlay, but the technology was subsequently broken with the iTunes 7.0 update. Apple maintains its software upgrades were of real value to customers.
According to a separate report from The Verge, Cue said Apple was opposed to a DRM lockout, but had to implement it to appease large music labels, themselves afraid of losing money on pirated, illegally distributed content.
"We thought about licensing the DRM from beginning, it was one of the things we thought was the right move that because we can expand the market and grow faster," Cue said. "But we couldn't find a way to do that and have it work reliably."
When asked if there was any way for iPod owners to get non-iTunes music on their devices, Cue mentioned a tried-and-true method most iTunes users in 2004 likely have employed, or at least known was an option.
"You could take the songs you bought in another store and burn them onto a CD and then rip them back into any device or music player you wanted," Cue said.
The class includes individuals and businesses who bought iPod classic, iPod shuffle, iPod touch or iPod nano models between Sept. 12, 2006 and March 31, 2009, and plaintiffs are seeking $350 million in damages, an amount that could be tripled to over $1 billion under U.S. antitrust laws. Trial proceedings are scheduled to continue into next week, with upcoming testimony expected from Apple marketing chief Phil Schiller.
During his hours-long testimony, Cue made constant use of the terms "hack" and "hacker" to drive home the notion that DRM was a necessary tool in keeping music labels on board with iTunes.
"All these other guys that tried the approach of trying to be open failed because it broke," Cue said, according to in-court reports from CNET. "There's no way for us to have done that and have the success that we had."
Cue offered new insight on Apple's deals with record labels, saying, "If a hack happened, we had to remedy that hack within a certain time period or they [the labels] would remove all their music from the store."
Apple is accused of inventing a monopoly between 2006 and 2009 with its closed iPod-iTunes ecosystem protected by FairPlay DRM, which in turn allowed the company to sell iPods at inflated prices, harming consumers. In court yesterday, attorneys for the plaintiffs claimed Apple intentionally deleted music from users' iPods if the content was purchased through competing digital stores.
Apple has taken the stance that DRM was the only way to keep iTunes protected from hackers, characterizing it as a necessary evil.
"Steve was mighty upset with me and the team whenever we got hacked," Cue said, referring to late Apple cofounder Steve Jobs.
On Tuesday, emails and a videotaped testimony from Jobs revealed Apple was "very scared" of running afoul of its precarious music label contract terms. Jobs touched upon a lynchpin issue during his deposition, saying frequent iTunes updates were rolled out as "hackers" found new workarounds.
A main contention in the case is that Apple updated its iTunes software to stop users from playing back songs from competing music stores, specifically RealNetworks' RealPlayer storefront. RealNetworks rolled out Harmony, which effectively bypassed FairPlay, but the technology was subsequently broken with the iTunes 7.0 update. Apple maintains its software upgrades were of real value to customers.
According to a separate report from The Verge, Cue said Apple was opposed to a DRM lockout, but had to implement it to appease large music labels, themselves afraid of losing money on pirated, illegally distributed content.
"We thought about licensing the DRM from beginning [...] but we couldn't find a way to do that and have it work reliably." - Apple SVP of Internet Software and Services Eddy Cue
"We thought about licensing the DRM from beginning, it was one of the things we thought was the right move that because we can expand the market and grow faster," Cue said. "But we couldn't find a way to do that and have it work reliably."
When asked if there was any way for iPod owners to get non-iTunes music on their devices, Cue mentioned a tried-and-true method most iTunes users in 2004 likely have employed, or at least known was an option.
"You could take the songs you bought in another store and burn them onto a CD and then rip them back into any device or music player you wanted," Cue said.
The class includes individuals and businesses who bought iPod classic, iPod shuffle, iPod touch or iPod nano models between Sept. 12, 2006 and March 31, 2009, and plaintiffs are seeking $350 million in damages, an amount that could be tripled to over $1 billion under U.S. antitrust laws. Trial proceedings are scheduled to continue into next week, with upcoming testimony expected from Apple marketing chief Phil Schiller.
Comments
With the labels stipulations, it's no wonder Apple wanted to keep iTunes locked down. It would have been a PR disaster if a couple music publishers pulled out within a year because iTunes was hacked.
Apple did the right thing. I predict they win this one.
Burn a CD. Import it to your iPod. What are these people complaining about?
With the labels stipulations, it's no wonder Apple wanted to keep iTunes locked down. It would have been a PR disaster if a couple music publishers pulled out within a year because iTunes was hacked.
Apple did the right thing. I predict they win this one.
I agree Apple was likely not in the wrong here. however, it seems the courts don't understand the technology or limitations of it. I'm not so sure they will win this.
On the flip side, if they loose, I wonder if this would open up those like Amazon against suites for DRM'd movies and tv shows?
To get understanding is why expert witnesses are brought in to testify. I think Apple will weather this storm, and emerge unscathed.
[@]SolipsismY[/@], I almost missed it.
How quickly we have forgotten the words Napster and Kazaa...
In the early days, I even tried Microsoft's horribly conceived DRM (later called PlaysForSure), but I did not like the restrictions of per-device licensing in the early days. My desire for device plurality evaporated once I decided the iPod / iPhone was the best portable music player, and FairPlay licensing was permissive and simple enough as long as you use Apple devices.
I too feel Apple was in the right with their actions and implementation of DRM, but I have a feeling the courts won't understand it enough (if at all), and judge against them... :no:
Basically record labels made Apple do it.
Apple does not prevent you from playing DRM-free MP3, AAC, or PCM files from outside the iTunes Store ecosystem on their devices. And legit iPod users have known this for over a decade. You don't have buy anything from the iTunes Store to use the iPod or iTunes.
In the early days, I even tried Microsoft's horribly conceived DRM (later called PlaysForSure), but I did not like the restrictions of per-device licensing in the early days. My desire for device plurality evaporated once I decided the iPod / iPhone was the best portable music player, and FairPlay licensing was permissive and simple enough as long as you use Apple devices.
This is not about DRM-free music. That has nothing to do with it. It is about DRM music purchased from another store that was prohibited from being played on an iPod. At the time of the lawsuit, RealNetworks had DRM music for sale that could not be played on an iPod, until they hacked FairPlay. Interesting that Microsoft is not being sued because their Protected WMA files cannot be played in iTunes, only on their crappy Windows Media Player.
"As long as you use Apple devices" is the basis for the lawsuit.
Apple did not overcharge for their devices. They were competitively priced with other hard drive MP3 players...the Creative Nomad Jukebox. Not sure how anyone could be damaged by this when they always had an option to buy a CD in a store from a particular artist that was not available in the iTunes Store and rip the CD without any DRM.
The DRM was required by the RIAA, not Apple. So the RIAA should be named as well because they required all the DRM on the heels of the Napster shut down. They did not want a device that could mass-share thousands of songs over FireWire to another user's computer. That restriction still applies today. If you plug your iPod into another user's computer, it prompts you to erase the iPod or cancel the request.
If the iPod could only play iTunes songs they might have a point. But it could play iTunes songs and MP3s, right from the start.
In fact I would argue the MP3s were more crucial to it's success because it allowed people to put their giant pirated music collections on their iPod.
Anyway it's all moot now because people have phones instead of iPods, and Real Networks or Microsoft or whomever could presumably make an app that plays songs with their DRM technology.
I agree Apple was likely not in the wrong here. however, it seems the courts don't understand the technology or limitations of it. I'm not so sure they will win this.
On the flip side, if they loose, I wonder if this would open up those like Amazon against suites for DRM'd movies and tv shows?
The biggest problem here is speaking in court with a 2014/2015 view of digital music and not the 2004 version. The whole digital music business was very young and labels were hyper-paranoid. They should go sue the labels who demanded the DRM to start with.
Ebook business Apple is sued for the contracts they set up with publishers
Digital Music they get sued for following the terms of contracts the labels made with them.
Apple should counter sue everyone involved with the suit against them with treble damages for being stupid. And all attorneys disbarred.
If the iPod could only play iTunes songs they might have a point. But it could play iTunes songs and MP3s, right from the start.
In fact I would argue the MP3s were more crucial to it's success because it allowed people to put their giant pirated music collections on their iPod.
Anyway it's all moot now because people have phones instead of iPods, and Real Networks or Microsoft or whomever could presumably make an app that plays songs with their DRM technology.
If you remember, the launch had people sit down and load an ipod with music. The attendees were handed a stack of 100 cd's when they left which was the music they just loaded in the ipods. From day one you could load non itunes music....
Everyone should know that in the early days of the iTunes music store, the record labels required a strict copy protection DRM to be attached to all the tracks sold and used. This was the record labels that required this for Apple to actually start the iTunes Music store. Something that Apple did not want but had no choice in those days if they wanted to start selling music online. If you ask me, this suit should be filed against the record labels because they are the ones that made selling music online to a variety of players impossible because of there strict copy protection DRM they required to have attached or imbedded into each song. And nobody forced anyone to buy an iPod or buy from the iTunes music store. So I think this lawsuit is a bunch of malarky! If you bought a player from another vendor you should of thought about where you were going to get your music before you bought it.
This is not about DRM-free music. That has nothing to do with it. It is about DRM music purchased from another store that was prohibited from being played on an iPod. At the time of the lawsuit, RealNetworks had DRM music for sale that could not be played on an iPod, until they hacked FairPlay. Interesting that Microsoft is not being sued because their Protected WMA files cannot be played in iTunes, only on their crappy Windows Media Player.
This is spot-on. It's interesting that it has not come up in any of the media commentary. Perhaps they'll understand this once Apple's lawyers start presenting their side?
"You could take the songs you bought in another store and burn them onto a CD and then rip them back into any device or music player you wanted,"
The same process goes for Apple DRM'd music. I have several iTunes store purchased .m4p songs that I have burned to CD then ripped to .mp3 format only to go back into iTunes as an unprotected version and those would be playable on nearly any player, except perhaps Sony...