"It is our illusions that create the world."

-- Didier Cauwelaert

I want to put a new twist on the whole DRM issue related to the music and movie industries. For the sake of simplicity, I'm going to use the term "mm-industry" to refer to both of these industries. In this column, I'm going to maintain that much of what the mm-industry is worried about is an illusion, and I'll propose that Steve Jobs and every Apple employee knows it.

In order to put the mm-industry's illusion into perspective, no pun intended, I need to tell you a story about skiing. Surprisingly, skiing applies in several ways here and clarifies the illusion.

A Ski Illusion

I have been skiing for a long time. I learned to ski at Steamboat Springs Ski Resort in Colorado in December 1986 and have skied every season since, so I can say that I know something about the sport.

So here's the illusion. Each time I ride the lift, I see a different set of skiers. Occasionally, I'll see someone I saw on the last ride because they took the same route. By and large, however, the people I see are constantly changing, and the overall view doesn't change very much throughout the day.

The illusion, however, is that any one person is out there all day. That's just not true. Some people arrive early and quit early. Some arrive late and ski until the lifts close. At any given time, some are in the lodge having hot cocoa.

And so what appears to be an endless succession of people who ski all day is really just a slice in time. No single paying skier, except for a very few fanatics, skis from opening to close. But it appears that way because those of us up on the lift chairs always see people on the slopes below no matter when we look.

Stop and think about that for a second.

It's an interesting illusion, and I think it's applicable to the mm-industry.

The Music Industry's Grand Illusion

Executives in the music and movie business who bother themselves with observing the millions of customers out here are like the skier on the lift chair. The Internet, what they read, and the reports provided to them aggregate to the point where the behavior of millions as a group (like the crowds I see on the slopes) is ascribed to each and every customer (the one person I see for a fleeting moment each day.)

It's an easy mistake to make.

The result of the mistaken illusion is that entertainment executives believe that every person in the group of customers has the time and inclination to engage in behavior attributed to the group as a whole. It would be like me hoping that a pretty blonde skier will decide to catch lunch at the same restaurant on the mountain, at the same time as I do. Both are unrealistic fantasies.

All of Apple's employees understand this illusion. It's precisely because every Apple employee works so hard. I don't mean to say that there's anything special about Apple employees -- they're just like the rest of us. And that's the point. Everyone is working hard these days.

When you look around and diagnose your own lifestyle and that of your friends, you'll find that most people remain fairly busy during the day, often work late, bring work home, and have significant obligations in the evening. There is precious little time to engage in extended periods of behavior that is ascribed to the music customer as a group. For example, and this is hardly a complete list: working on that novel, picking up kids from day care, grocery shopping, soccer practice, after school events, tennis club, eating out, karate practice, church services or choir practice, homework, company softball league, PTA meetings, mowing the lawn, paying bills, making dinner, reading, playing with the kids, getting them ready for bed -- which takes hours -- and collapsing into the living room couch to catch the last 45 minutes of Lost.

However, the illusion of the music executives is that they've been told about kids who spend all evening downloading music to their PCs from P2P sites. They've been told that CD sales are down. It's all true. There are probably a lot kids at any one time who are stealing music, just like, at any one time, there are lots of skiers on the mountain.

So let me restate the illusion so that there are no misunderstandings.

Just because one sees thousands of skiers all day long on the slopes doesn't mean that any one person is doing a lot of skiing. Just because mm-industry executives see the results of millions of songs being pirated doesn't mean that any one person is doing much of it.

Building a Better Business Model

Apple's employees know that life is too short to mess around with a clumsy, awkward cell phone. Hence the iPhone. Life is also too short to spend an entire evening in front of a computer. (Unless one is a writer!) And Apple employees know that their customers, just like them, are engaged in a myriad number of things all through the day. That's the whole point of what Apple does: make life simpler and better so that the rest of us can be more creative instead of frustrated. Few adults have the time to engage in the (illusion of) piracy that the mm-industry believes they do. If they did, sales of music CDs in the stores wouldn't be down 10%, they would be plummeting towards zero. If they did, Wal-Mart wouldn't be making mega-bucks selling movies on DVDs.

We've been down this road before. We know that P2P file sharing software is often loaded with malware that will destroy a PC. We know that taking the time to set up a home computer to steal music and hoard vast libraries of music is an endeavor engaged in by only a small percentage of nut cases. Apple has already shown that most people are willing to pay an honest price for a good download experience and a good quality song. However, the mm-industry doesn't want to acknowledge that fact.

I strongly suspect that Mr. Jobs understands this illusion as well, and that's why he feels that DRM is an idea whose time has come and gone.

On the other hand, the illusion I've described makes it all too easy for mm-industry executives to believe that we all concern ourselves about stealing content all the time when, frankly, we don't. They worry that anything less than 100% ironclad protection of songs is going to reduce their revenues. That's anathema because revenues must always go up so that Peter can be robbed to pay Paul. Revenues must go up or they lose their high-paying jobs. Their illusion makes it all too easy to shift the blame to someone else.

I read recently that from the time a new song shows up on the Apple iTunes store until it appears on a P2P server, with its DRM stripped, like a 1976 Cadillac up on blocks, is about 180 seconds. Has that kept Apple from selling 2 billion songs? It has not. Will that keep Apple from growing as more and more customers come to appreciate the benefit of an iPod and the iTunes Store? Not likely.

Overcoming Fear

Back to skiing.

In skiing, there is a certain fear that beginners experience. That's due to the physics of the skis. If a beginner leans up the hill in a turn, defensively, the downhill edge of the ski loses its grip on the snow and they fall. The skier must lean down hill, in a particular way, in order to have the downhill edge of the ski bite into the snow and provide stability. That's a scary thing to do at first.

By resisting the fall through fear, the skier falls. It can take years for skiers to overcome this fear and learn to move their bodies in the correct way.

The mm-industry has the beginner's fear that all of their customers have the time to think about robbing them. Quite to the contrary, those customers are thinking about lots of other things. They're thinking about loved ones in Afghanistan and Iraq. They're thinking about keeping their kids safe. They're thinking about how to care for aging parents. They're thinking about a nasty boss or a friend in need at work. They're thinking about how they're going to pay for health insurance if they get laid off.

While most customers desperately seek the peace and quiet to enjoy purchased content, it's true, many young people are grabbing free content. Despite that, industry research has shown that as young people grow older, they give up a lot of things: video games, music piracy, one-upmanship, binge drinking and all those indiscretions of youth. It's a lesson that must be learned each generation. Adults eventually learn that increased income affords a practical tradeoff, when free time is short, to engage in simple pleasures. They're willing to pay for those pleasures, assuming that they have a good experience.

To this end, Apple has made our life better. Everyone who works at Apple, working late into the evening, knows that they're trying to make life better for their customers.

Looking at music in particular as I close, what are the RIAA and the music labels trying to achieve? Customer loyalty? A great experience? In fact, they drag people into court, have hissy fits when kids do the things they naturally do, and act as if they are the most important part of their customers' lives. Here's the deal. They're not.

Regrettably, the music industry is in the deepest grip of illusion and fear. As a result, they'll never earn the trust and respect that Apple has.

Consider this. There are lots and lots of companies and products scratching and clawing for our attention. The day may come when a desktop computer won't just play music, it will create music, music to our liking, heuristically learned from each person's own tastes. The entire music industry could go the way of the typewriter, slide rule, drugstore soda fountain, drive-in movie theater and doctor house call.

If music isn't the best part of our lives from companies we love to do business with, we'll turn towards all those other things that will emerge this century to amuse us.

That is, when we have the spare time.