When you buy a CD of music, a movie DVD, or a book you are not allowed to copy it. They are covered by copyright laws. In order to make copies, the copyright owner has to give you permission. Hence, a license that defines how those copies are made.

So when you get a song from iTunes it must be copied onto your computer and iTunes grants you a license to make copies and stipulates how you can make these copies.

Since music, movies, and software is so easy to copy these days without and degradation in quality, the big companies have resorted to doing just about anything they can to control how copies are leagally made and that only legal copies are used (DRM stuff). And since they have been allowed pretty much free reign on defining how copies are made they are now starting to extend that into how copies are used.

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