Let's take a deeper look at the future of DRM.
Apple Inc's CEO Steve Jobs took a bold step by calling for the big 4 music companies to abolish DRM copy protection. Jobs envisions a future sans DRM.
This stands in very, very sharp contrast to the Microsoft strategy for the last few years. It's been said that Vista is a DRM wrapped in an operating system. That might be stretching it a bit but certainly DRM is in Vista's DNA.
The Holy Grail here is VOD (video on demand) Everyone wants to sell you your PPVs over the internet. To date the thought is that whoever owned the best DRM would win because that's what Hollywood demands.
That might not be the case.
Microsoft has positioned themselves as the most DRM friendly OS on the planet. Some very troubling articles have been written about what Vista will do if it detects what it decides is outlaw "premium content" in the computer. Microsoft even abandoned PlayForSure to bring the Zune DRM in house.
All this has made Microsoft "The Bad Guys" to the "Information Wants to be Free" crowd. Apple only gets a marginal pass from these people; FairPlay is less onerous than many of its competitors but it's still a DRM.
By publishing this letter, Jobs does several things.
First, he sets himself up as "The Good Guy" looking out for consumer right. That tacitly makes MS the bad guys again. He also takes a swipe at Europeans who have been giving Apple stress over iTunes only working with an iPod.
But more importantly, Jobs is trying to change the world again. (not surprisingly in his favor)
Microsoft has invested billions in owning the DRM of choice. They're married to it with Vista. Jobs is trying to pull that rug out from under them. If the music companies drop DRMs and make more money then they are now, selling it to Hollywood is much easier.
Who will win the DRM war? I don't know.
Apple has FairPlay which is a proven technology. If the RIAAs of the world refuse to give up DRMs, Apple has something to offer. If they drop the DRMs Apple feels they can compete on features and user experience. (especially if Vista has DRM bloat) I don't see a sure win for Apple but I see no sure loss either.
Microsoft isn't as nimble. If DRM wins, they will continue to be a big player with the installed user base and OS integration. They might win big. Where things get dicier for Microsoft is if the content providers really do give up the DRM addiction. MS is so committed to DRM in Vista that losing that advantage could be a big loss for them.
I'm not brave (or dumb) enough to tell you I know the future of DRM but I can say this with certainly....
If the big 4 music companies agree to sell DRM free music, short Microsoft stock. Fast.
