Professor Elam

Steve wants the music industry to remove DRM Digital Rights Management (rights for who I wonder) from iTunes and other sites, see WSJ page one 2/7/07.  After all CDs don’t have DRM and the music can be shared and played anywhwere, not so with download sites.  The record execs of course say this is all that is between them and any shred of ownership of IP, Intellectual Property, the song itself.

Well let me take you back to 1981. Let’s visit a pre PC or MAC computer store.  You can have a WANG, KAYPRO or COMMODORE  or a host of other brands that went by the by.  None of the machines can talk to one another or exchange files as they each use a proprietary operating system and software. Clearly your purchase is a bet on which will survive, you will note none of those three did though they were big names back then.  Now let’s go back to the 1920s when firms were being required to reveal financial statements.  Egads they declared, everyone will know everything about us, competitors will copy our operating model, it will be the end of us.  Today of course, financial analysis (read financial astrology what with backdating options, mark to market accounting etc.) is a major industry.

So what say you-Jobs says this leads to incompatibility.  And that is what Gates real legacy is-the open architecture of the PC system is why there are so many and the closed nature of Apple OS is why there are so few, will anyone point this out to Jobs?

So, what should the music industry do, drop DRM and throw it all wide open?  Or hunker down and continue to play all the cards face down?  Please use what we are studying in class to couch your answer.  Dr. Deming, cost, strategy, what?

DLE