Sun Tzu has it covered
To understand what went on, you must drop your emotional attachment to theories that suit your preconceptions. Steve Jobs was ruthlessly logical in his decisions, and he got us to where we are now. It is Apple's actions that gave Amazon the right to sell DRM free, because the music biz ended up playing that card to prevent Apple controlling the market. The stage on which Apple fights on the consumer's behalf is at the midpoint between consumer and incumbent, and that's how they change the world. They become the new incumbent because they force what users want when the incumbent won't offer it.
Everyone knew we had to move off CD's. But the music biz was terrified of losing control to rampant copying. If Apple ever put a step wrong, they were a big target for the music biz to sue. To sell music files, the music biz demanded copy protection that couldn't be defeated, even though every copy protection scheme had always ended up defeated.
Job's first, brilliant, audacious step was the "Rip, Mix, Burn" campaign that went with offering CD/RW in the iMac. Apple, supported by artists, advertised that it was definitely legal to rip CD's, and definitely legal to write the music to a new CD, provided it was new "mix", and iTunes made it easy to do. If you could do it with iTunes, it was legal. The music biz hated it, but it was Steve Jobs and Apple that stood up for the consumer, and interposed themselves as target for any litigation the music biz might attempt. Thank you Apple for a brilliant, and successful opening move.
When it came to selling music files, the music biz demanded DRM. How come Apple was able to offer acceptable DRM, when Microsoft et al didn't, and didn't even seem to know they didn't, even though any punter could have told you?
Others, like Microsoft Playsforsure, only offered rental of music, and restricted too rigidly where it could be played. (when you "bought" Playsofrsure music, it still had to be refreshed by a touch from the central servers every month, even though there was no further fee). After a month, your music player would stop playing a playsforsure file unless it was refreshed with another sync. When Microsoft eventually shut down Playsforsure, they told everyone to burn all their music to CD (thank you Apple), or they would lose it.
Apple had negotiated a deal where you could play on five computers, and on unlimited iPods provided they synced to one of your five. And your music would play forever, without any further touch from a central server. Apple fairplay was the only DRM system that actually felt like owning the music. How did they pull that one off?
Apple only had the Mac which didn't have Windows, or even an X86 CPU, and an expensive iPod that only synced to a Mac, using a Firewire interface that wasn't on Wintel PC's. So Apple was making a deal for 2% of the market, for hardware that didn't even connect to a PC. And Apple controlled ALL the player devices, and could update every player firmware if Fairplay was ever hacked. Only if you didn't ever want any new music on your iPod could you avoid a compulsory fairplay/iTunes/firmware update. Apple delivered unbreakable DRM by controlling all the player devices in perpetuity. Even Microsoft couldn't offer that. Everyone else delivered unbreakable DRM by having all music automatically die within thirty days unless it was re-touched from central servers.
Apple didn't let the music biz restrict them legally to Mac and firewire. The music biz presumably figured: if this works on the Mac, we can stitch up asimilar structure for the other 98% of the market before Apple starts again with USB, Windows, and X86, and zero market share.
So it did work, enough people accepted Apple's DRM, even though you could still buy CD's and rip them to unprotected music on iTunes. Apple smoothly switched to USB, and put iTunes on Wintel. But the music biz failed miserably to copy the benefits of Fairplay in the Wintel market. That's why they gave Amazon and others DRM free rights which Apple didn't have. It was their last card to play. Apple had finally forced the music biz to do what they should have done in the beginning: trusted the punter with DRM free music.
Of course Apple's not stupid. After they'd done all the hard work, the music biz was giving competitors a better deal, putting Apple out of the business. Of course Apple had a "most favoured nation" clause: if you give someone else a better deal, you have to offer it to us. But the music business hung on to that differentiation for over a year before capitulating. I'm sure Apple was on the point of litigation when the music biz finally gave Apple the right to DRM free music. I believe Amazon was established as a viable alternative channel in that year.
So there you have it: it was Steve Jobs who forced the music biz to allow DRM free music files to be sold, and it was Steve Jobs who got the music biz to give Amazon that right more than a year before Apple itself got it. Before that time, if Apple allowed Real to hack Fairplay music onto iPods, Apple could lose the ability to change the implementation of Fairplay while preserving all a users owned music on an iPod. DRM requires tight control all the way from publisher to analogue-out in both audio and video. Apple couldn't possibly allow Real to break that chain, and if they have any sense, that's what Apple will say in court: the music biz demanded unbroken DRM so Apple required complete end to end control. Allowing the Harmony hack would break the control that Apple needed to meet contractual obligations for music distribution.
So now go read The Art of War (2.5K years old). It's a free download, and it's very short. It's business basics.
Biting the hand that feeds IT
