Media Wonk

Apple's success ruined everything - September 17, 2007

NEW YORK--Media Wonk is at the Jupitermedia Digital Rights Strategies conference here today (co-sponsored by Content Agenda) where Steve Jobs is having a bad day.

Unlike out in the real world, where the press has run out of superlatives to describe the wonder that is Apple and all its devices, here among the DRM geeks Jobs is Public Enemy No. 1. Even Microsoft gets more love.

"Apple is using encryption to do what Ma Bell used to do with the phone network: wall people in," InterTrust CEO Talal Shamoon said in the opening session, setting the theme for the day. "It frustrates consumers and it feeds piracy because it doesn't allow consumers to do what they want to do."

Apple, of course, is also stand-offish toward the various consortia, initiatives and ad hoc groups working to make DRM systems interoperate with each other and who flock to DRM conferences like this one.

The full program for the conference is available here. Speaker presentations can be downloaded here (password: conference).

But Apple's real sin has been its success.

"The technology to acheive interoperability is there already," Fluxe CEO and former Sony Pictures exec Brian Lakamp said. "The problem is that that everyone who is in a position to enable that model, from the content owners, to CE, to IT, to network operators and wireless operators, has looked at what Apple did and is chasing its taillights trying to create a proprietary relationship with consumer."

Lakamp left Sony last year to start Fluxe, which is attempting to develop a neutral platform--"a Switzerland"--that could hold consumers' content independent of any service provider.

"I can't believe I'm saying this but the real bad guy here isn't Microsoft, it's Apple," InterTrust's Knox Carey chimed in. "You can license Microsoft's DRM."

Behind the animosity toward Apple is genuine anxiety among those attempting to find market-friendly DRM solutions that the near-term, proprietary business interests of content owners, service providers and device makers will conspire to thwart what they all say they want: DRM that protects content owners, enables new business models and is acceptable to consumers.

"From an economist's point of view, Apple should have opened up iTunes to all devices," said Michael Einhorn, an economist. "Why didn't they do that? Because Apple can't show its interfaces [between iTunes and the iPod] to every conceivable content provider because once they've been shown they can take Apple’s interfaces to the competition.

"So Apple is afraid of losing its information. That’s a function of the market but it's not a good one. Economists call that an inefficient market because you cannot establish contracts all the way through the chain that preserves value. You can’t say the market is going to work that one out becuase the situation we have is a function of the market. So we have a problem on our hands. The market not working. It's unfortunate but that's the way people in technology markets think. Platforms don't open up."

The result of that market failure, said Jim Helman, CTO of Movielabs, the studio-sponsored reasearch lab, is "a huge risk of bad consumer experiences in moving content between devices. The engine isn't on fire yet, and the impact won't be as bad as a plane crash, but we see a really huge risk out there."

Bad experiences, of course, can lead to disaffected consumers who don't come back for a second try.

And it's all Steve Jobs' fault.

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