Did Wall Street Misunderstand Mac Street?

Apple’s (AAPL-NASDAQ) Steve Jobs’ call for dropping DRM (digital rights management) online is something that while it sounds great, is likely not realistic.  The music industry has fought this on and on and on and on……..My partner Doug has already covered part of this here

Job’s case is almost sort of like saying that they should just go ahead and embrace what is considered copyright theft today because the public would love to be able to send the music to as many people and devices they want to.  That isn’t a model that will work for very many music recording labels, particularly as they have been fighting hand in foot over this.  part of the difference between this occuring with CD’s versus online is that it is much easier to do this if it is already online.

There was apparently the brief interpretation that this was Jobs opening up the iTunes platform because AAPL jumped an instant 1% on the news before the realization came, and that isn’t happening.  If non-DRM music was the case then AAPL would certainly be selling more iPods, but this is the same as FREE ONLY content.  I have called for Apple to open up its iTunes format for a universal compatibility because they have the brand and name recognition already won in portable digital music players, but I know what that means potentially down the road if they ever have an iPod product launch that isn’t well received.  This is not AAPL opening up its own proprietary systems at all.

Don’t hold your breath for this to happen any time soon.  Ultimately, maybe.  Immediately or soon, slim to no chance.  This would be great for Apple (and any other online music seller) if it would occur, but it is a giant IF and it isn’t what the street thought it was originally.  The day the record labels and the musicians want to work free and only have a .org on their name without making monet for their bling bling preference, then you could expect this to occur.  Would you bet the over or the under on this really happening?

Jon C. Ogg
February 6, 2007