Yesterday Alex wrote about how SonyBMG’s XCP CD copy protection software includes a feature – apparently built on illegally copied open-source code – to translate music files into the FairPlay format used by Apple’s iTunes and iPod, but the feature was not exposed to users. The details are interesting. But equally interesting, I think, is the question of how this situation came about. Why would Apple make compatibility so difficult? Why would First4Internet go to the trouble to make its software compatible? Why would First4Internet and/or SonyBMG then turn off this already-working feature? And why would SonyBMG then blame Apple for the difficulty of moving XCP files into iTunes and iPods?
Today I’ll try to answer these questions. My answers will be speculative, as I’m not privy to any special information about the companies’ plans. But the story I’ll tell should be plausible, at least, and it will shed some light on how companies use DRM (copy protection) as a weapon in struggling for market supremacy.
Let’s start by reviewing why Apple makes it hard for others to encode files in the Apple FairPlay format that is used by iTunes and the iPod. Apple could easily facilitate such encoding if it wanted to; but it doesn’t. Instead, Apple seems to be trying to ensure that customers are locked in to a particular DRM scheme. This is the strategy we would expect from a company with high market share – customers try to avoid lock-in, but if they must be locked in they typically choose to be locked in to the dominant vendor. So the dominant vendor – Apple in this market – often tries to foster market structures with lock-in.
Recall that when RealNetworks, an Apple rival, created its Harmony software, which could translate Real-format files into FairPlay, Apple cried foul. Apple hung the dreaded â€œhackerâ€ label on RealNetworks and threatened to sue on some vague DMCA theory. When Real didn’t back down, Apple just changed the FairPlay format, rendering Real’s software incompatible once again. Apple was willing to use both legal threats and technical changes to frustrate compatibility.
First4Internet (F4I), in developing its XCP copy protection software, started out with no market share. F4I knew that customers wouldn’t want its software, because the main effect of the software is to stop customers from doing things they want to do. F4I wanted to reduce the unpleasantness of using its software, and one way to do that was to give customers a way to transfer XCP music files into iTunes or an iPod. And that meant translating the files into FairPlay format. To do this, F4I could have reverse-engineered iTunes and written code to do the translation. Instead, it apparently just swiped some open-source code called DRMS (written by Sam Hocevar and DVD-Jon), in violation of the DRMS license. Using this code, F4I built a working translate-to-FairPlay function as part of its software.
At some point, F4I licensed its software to SonyBMG. F4I would surely have told SonyBMG about the FairPlay compatibility feature. But when SonyBMG CDs shipped with F4I’s XCP software on them, the compatibility feature was disabled and hidden from users. Somebody must have decided to disable the feature, and it’s hard to believe it was anybody but SonyBMG. SonyBMG was F4I’s first major customer. SonyBMG was putting its name on the CDs. And SonyBMG would have been the main target for hacking accusations and/or lawsuits from Apple. So we have to conclude that SonyBMG chose not to make the software on its CDs FairPlay-compatible.
Why would SonyBMG do this? It would have been easier to retain compatibility, and SonyBMG’s customers would have benefited. So SonyBMG must have thought compatibility would hurt it, somehow. How might that happen? Perhaps SonyBMG was afraid Apple could bring a successful lawsuit against it; but that seems unlikely given the apparent weakness of Apple’s legal claims. Two other theories seem more likely.
The first theory is that SonyBMG wanted to avoid the public spectacle of two DRM companies fighting with each other. DRM advocates like to argue (against the evidence) that the only impact of DRM is to prevent infringement. When DRM companies fight over compatibility, this just emphasizes the role of DRM as a strategic tool companies use to lock other companies out of markets, and that sets back the cause of DRM. Much better from SonyBMG’s viewpoint, perhaps, to maintain the fiction of one big happy DRM family, even if customers suffer.
The second theory is that SonyBMG was trying to fragment the world of music-file formats, in order to reduce Apple’s negotiating power. Record companies have been complaining lately that Apple, as the biggest seller of Internet-delivered music, has too much market power. Apple’s market power helps it drive a hard bargain with record companies in negotiating the price and terms of Apple’s online music sales. SonyBMG, as a record company, would like to see Apple’s market power shrink.
Whichever explanation is right, it certainly appears that SonyBMG decided that XCP shouldn’t be compatible with FairPlay.
What SonyBMG did next showed a particular sort of genius. It blamed Apple for the incompatibility. Indeed, SonyBMG went so far as to ask its customers to petition Apple to solve the problem. Here’s SonyBMG’s web site:
Sony BMG wants music to be easily transferable to any device that supports secure music. Currently, music from our protected CDs may be transferred to hundreds of such devices, as both Microsoft and Sony have assisted to make the user experience on our discs as seamless as possible with their secure formats.
Unfortunately, in order to directly and smoothly rip content into iTunes it requires the assistance of Apple. To date, Apple has not been willing to cooperate with our protection vendors to make ripping to iTunes and to the iPod a simple experience.
If you believe that you should be able to easily move tracks from your protected CD to your iPod then we encourage you to use the following link to contact Apple directly and tell them so. http://www.apple.com/feedback/ipod.html
If you were SonyBMG, and you were clever but not overly concerned with telling the truth in public, this is exactly what you would say in this situation. Why pass up a chance to paint Apple as the bad guys?
Running through this whole convoluted tale are two consistent threads. DRM is used as a weapon not against infringers but against market rivals. And when companies use DRM to undermine compatibility, law-abiding customers lose.