When Apple emerged as an online music retailer, it seemed that those who oppose DRM had won the battle but lost the war. Apple uses DRM, but impose much milder use restrictions than the record labels were proposing with their own music services. Apple’s lenient policy, combined with the popularity of the iPod and iTunes site seemed like they would settle the debate through gentle compromise, and the compromise would be that DRM would exist. My worry at the time was that, while Apple didn’t seem as bad as the record labels themselves in locking down content, it did totally close off the possibility of (legitimate) excerpting and remixing — that is, users’ “agency” with their own culture. Further, the fact that DRM would remain, become normal and pervasive, meant that we’d accept its logic, that computer platforms would be built to honor it, and it could always return in its more restrictive form.

But, as we have seen, the major music labels have step-by-step moved towards selling unrestricted music in MP3 format, without DRM. And the reason, it seems, is that DRM gave Apple an incredible amount of power in the online music market — DRM allowed Apple to tie the music labels’ content to the iPod, which users have embraced, and now Steve Jobs gets to sit at the table and dictate price and availability. Now, as the New York Times reported this weekend (Thanks, Josh, for the link), the major audiobook publishers, including Random House and Penguin, seem to be making the same move. And lo and behold, Apple reappears as the cautionary tale for why they’re letting go of DRM:

If the major book publishers follow music labels in abandoning copyright protections, it could alter the balance of power in the rapidly growing world of digital media downloads. Currently there is only one significant provider of digital audio books: Audible, a company in Seattle that was bought by Amazon for $300 million in January. Audible provides Apple with the audio books on the iTunes store.

Apple’s popular iPod plays only audio books that are in Audible’s format or unprotected formats like MP3. Book publishers do not want to make the same error originally made by the music labels and limit consumers to a single online store to buy digital files that will play on the iPod. Doing so would give that single store owner — Apple — too much influence.

Turning to the unprotected MP3 format, says Madeline McIntosh, a senior vice president at the Random House Audio Group, will enable a number of online retailers to begin selling audio books that will work on all digital devices.

I love that DRM, so problematic because it locks users to a model of consumption designed by the content providers, is being jettisoned because it locked those content providers to the hardware. Turnabout is indeed Fairplay. Ironically, while it is the DRM format lock-in that is pushing users to Audible and Apple iTunes, Audible is owned by Amazon, who is emerging as the favorite of the music labels to unseat Apple by selling DRM-free MP3s.

Now, of course, its time for Apple to use its market position again. I’d suggest partnering with Adobe to make it easy to drop PDF-formatted books and documents onto their iPhone and iPod Touch, thereby producing a powerful, and instantly superior, alternative to Amazon’s Kindle e-book reader — which uses DRM to lock people to the hardware, just as Apple did.