Did Labels Ask Apple to Remove The Headphone Jack?

by Harrison Speck, Policy Fellow

On Wednesday, September 7, Apple is poised to host a special event announcing the launch of the iPhone 7, widely rumored to lack an analog headphone jack. Since these events are always accompanied by frenzied speculation, let’s make a bet: Would you wager Apple’s headphone jack is removed to reenact an already failed DRM scheme or capitalize on exclusivity and market domination in a multi-billion dollar accessory category?

With the rumors of Apple removing the analog headphone jack from the next iPhone came a deluge of articles about the impending invasion of DRM (a blanket term for various types of digital rights management). We’re told that this move must be happening at the behest of greedy record labels, eager to inconvenience users for the sake of their battle against piracy, forcing people to use DRM-protected digital audio streams.  But let’s ask some critical questions.  While it is a technical possibility that an all-digital audio feed could include DRM, who would implement it and why? 

It’s no secret that DRM can be really annoying.  In a 2015 article for MIT Technology Review, musician Ted Leo recalled common frustrations: “I remember trying to DJ my sister’s wedding and wanting to play a few things from my library off someone else’s iTunes, having to deauthorize and reauthorize computers, and manage iPods and hard drives, etc.—First World problems, maybe, but frustrating impediments to just enjoying music, nonetheless.”

And it’s true that certain implementations of DRM went beyond annoying to downright destructive, as with Sony/ BMG’s rootkit from 2005, which prevented ripping of CDs while potentially damaging users’ computers.

But it’s also no secret that the music industries’ models have changed drastically since 2007, when Apple famously removed DRM from iTunes music files. Has DRM been eliminated? Not even close —DRM is still ubiquitous in the modern music landscape. However, there are many technologies that fall under the broad “digital rights managment” blanket, and the more intrusive implementations have been largely abandoned in favor of technologies that don’t frustrate the user; password protected accounts, watermarked streams, and the like.  Today, nearly every streaming service has some form of DRM, including Apple Music. (In fact, without DRM, it’s unlikely such services could exist!) 

And the music industry’s tactics in dealing with copyright infringement have changed as well.  Remember that the RIAA quit filing lawsuits against individual file-sharers back in 2008, and has largely shifted its focus to battling large-scale commercial infringement. (To the extent that individual end users get targeted for infringement suits, data indicates these suits mostly come from adult film studios.)

Yes, the music industry and tech companies have both implemented nefarious DRM regimes in the past. Yes, there may even be current concerns about certain implementations of DRM on streaming services, but the headphone jack, of all things, is not the last vestige of hope for a DRM-free world and it is somewhat ridiculous to think that the music business would really consider the “analog loophole” on personal listening devices as a high-priority site of copyright infringment. There’s simply no evidence that record labels have asked for the jack to be removed, and no clear benefit to them for doing so.

Likewise, Apple is a different company from when they included DRM in iTunes music files. That’s not to say Apple isn’t about the bottom line, just their bottom line is so much broader. In 2007, Apple made $24.6 billion, compared to $233.72 billion in 2015. The music industry, with its meager $15 billion a year, is dwarfed by Apple’s empire.  (This is important in thinking about the amount of leverage the music business would supposedly have to influence Apple’s decisions about hardware.)

Speaking of 2007 — in describing the headphone jack rumors, tech pundits have been throwing around references to Steve Jobs’ “Thoughts on Music,” a stirring call to arms against DRM. Many have speculated, including Rod Schultz, the former Apple engineer and witness in Apple’s 2014 antitrust suit, Jobs wrote the piece to spin a decision by the music industry already set in motion. According to this theory, record labels were fearful of the increasing market share Apple controlled through Apple’s DRM — iTunes was available only on iPods, locking users into Apple’s software and hardware. Apple was not a saint protecting the people from the music industry; rather the major labels saw a choice of the lesser of two evils. Again, this is just a theory from someone who knows DRM inside and out, but it’s worth considering the possibility Apple did not implement DRM on iTunes because they beholden to the whims of big labels, but because it was beneficial to Apple to promote adoption of Apple’s preferred products.  (It’s not unlike Amazon’s rumored new streaming service, which only works on Amazon’s proprietary Echo device).

Which leads to a more likely factor in the headphone jack’s removal: the MFI program. As John Gruber points out, anyone can manufacture headphones that use an analog jack, but a manufacturer must become MFI, or “Made for iPhone/iPad,” certified to make headphones using the lightning connector. Apple sets manufacturing standards and collects royalties on products with MFI certification. NDAs prevent any information on how much Apple receives, but we can assume it provides Apple with some walking around money; that’s in addition to money they might make selling Beats headphones. So would removing the headphone jack really garner Apple much money? How big is the headphone industry, anyway? One report says it’s expected to surpass $13 billion by the end of the year, so roughly the same size as the recorded music business. Physical products sell for more — the music industry knows this all too well, by the way.

If the DRM conspiracy were true, the music industry’s plan would be to reuse a failed plan from a decade ago in order to… what? And how? Yes, Apple capitalizing on MFI certification does not preclude the possibility of DRM implementation, but who is going to be implementing DRM? Would Apple allow Spotify to implement a DRM that renders certain headphones incompatible with Apple Music? Would Apple risk another antitrust suit to do the same to Spotify? Would the music industry have enough clout to convince Apple that DRM on the lightning connector was in their best interest? It all seems far-fetched, especially when you consider what the music industry would gain in 2016. Record labels are embroiled in larger battles than preventing individuals from manually copying music through their headphone jacks; they’re much more concerned with issues like compensation from platforms like YouTube, which will, of course, still be accessible through both digital and analog headphones.

Also, why would DRM be a problem when everyone is discussing analog audio dongles as a possible method for using old headphones? Why would rumors involve Apple including the dongle with the new iPhone as a compromise to the headphone jack removal? Even if inclusion doesn’t turn out to be true, certainly Apple would like to sell you another (high-margin) adapter so you can use your favorite old headphones. 

History repeats itself, but not always exactly; the removal of the headphone jack encourages a closed system, but this system is on the hardware side, not on the content side; the benefits of this system accrue accordingly to hardware manufacturers, not to content creators.  The specific DRM seen in the mid 2000s is just not relevant in the music industry a decade later, but exclusive hardware is.   

Ultimately, consumers have every right to be annoyed at the removal of a headphone jack, whether for reasons of inconvenience of carrying around an adapter, principled objection to planned obsolescence, or (as with Apple cofounder Steve Wozniak), issues with audio quality over Bluetooth.

But if there’s one big lesson from this episode, it’s that reflexively rushing to blame the big bad record labels for every disagreeable thing that happens in the music business can lead you to badly misunderstand what’s really happening.
  

Submitted by kevin on September 6, 2016 - 10:30am

Comments

2 comments posted

Maybe RIAA isn't specifically

Submitted by Mitch Stoltz (not verified) on September 7, 2016 - 2:26pm.

Maybe RIAA isn't specifically pushing for DRM on the audio outputs of smartphones, but if Apple is making those outputs all-digital for its own reasons, doesn't that open the door to adding DRM as a term of various deals with the record industry? In other words, even if the purpose is to sell more hardware and make the phone thinner, I could see DRM coming along for the ride, opportunistically.

Record labels could have

Submitted by kevin on September 7, 2016 - 7:36pm.

Record labels could have pushed for DRM on USB audio or Apple's Airplay streaming audio for years now, but they haven't. No one has any interest in doing so.

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