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". . . .if the bad guys have all the guns and the good guys have none, then who wins? No-brainer.



Good point. But . . .what if the bad guys have crappy guns stolen from the Russian mafia that occasionally misfire and the good guys have an army of well-trained, brain-eating zombies that can only be killed if you fill their mouths with Baltic Sea salt and you have to sew their mouths shut with threads from high school letter jackets?

Either these guys didn't actually read Steve's letter, or they think he's lying (or misinformed).

He stated quite clearly that licensing FairPlay would most likely open it up to major compromise.

If you think about it, what the RIAA is asking for here is an open, closed system. A contradiction, in other words. Open to anyone with a 2-bit audio player that wants to access the content, but closed to anyone with nefarious piracy intentions. How on earth would any technology distinguish between the two?

AAC file (in a squeaky voice): Excuse me, sir, before I open my content up to you, would you mind telling me if you're a licensee or a hacker?

I think there are 2 issues here that is giving the music and movie industry a huge headache:

1. Microsoft has evidently offered to be the DRM police for the RIAA/MPAA, but does not own the majority market for either online purchased music/movies or portable players. If Microsoft owned 70% of that marketshare, they would be able to dictate to consumers what the MS/RIAA/MPAA wishes are.

But, alas, Apple has the lion's share of the market, so that's not working out for that partnership.

2. The music industry's current market model is to sell CD's with 12 to 15 songs for $13 to $20, even though there are only about 2 or 3 good songs on the average CD album, while the successful online market has shown that consumers want choice to buy only the singles they want for a much smaller price. If a CD album has only 2 good songs on it and the price of that CD is $12, then they get $6 per song and the rest is just bubble wrap.

The major labels don't think that they can make money at .99 cents a song, so I think that they really want to squash the whole digital download market or make it very hard and confusing to use, forcing user back to the Wal-Mart/Target/Tower CD (actual plastic disc) sales model.

If Microsoft owned &0;% of the digital music, movie and MP3 player market you would be seeing single song prices at about $5 each and maybe even only album sales at CD prices - PLUS you would not be able to do anything with the files you purchased. For a good example of what it would be like under a MS/RIAA/MPAA market ownership, look at the Wal-Mart online movie service - no price advantage at all and extreme DRM restrictions.

@triplehead

great post. AlanAudio is on the track too. Zachcube and Synthmeister have contributed other pieces of the puzzle.

To summarise:

- Apple Inc is now a music company
- Apple Inc is starting to look like Sony
- Apple Inc has the best music distribution operation in the business, by far
- The music companies cannot make money at 99c a song, but Apple can
- The letter from SJ is an opening salvo in a realignment of the music industry
- DRM is dead: Apple will launch a new paradigm

I would take this a bit further. Apple will pull this industry apart and rebuild it from the ground up. The music industry will never be the same again. The new model will pay artists very well - and they will flock to Apple, bypassing the old recording studios. Especially up and coming artists.

The abolition of DRM will allow the music companies to offer their music to lots of retailers. But Apple will continue to dominate. Because they have the best distribution platform and the best players.

Sell your shares in EMI.

SydneyStephen,

Nice synopsis, the only issue I see in your conclusions is a slightly scary underestimation of the power of MS to buy it's way into just about anything it wants. Still - Apple has steared a an interesting course. With Apple clearly taking the lead in selling music online, MS has got to be ringing it's hands becuase they realize as much as we do that this could, if it hasn't already, begun to sink it's teeth into the non-enterprise desktop market.

While we all wonder, more and more, if Apple will even be selling computers in ten years, I have little doubt in my mind that the answer to that question is, YES. Since SJ has been back running Apple it has been a kind of now-or-never drive that he's kicked Apple in the butt with, and all of this side marketing and focus on non-enterprise product lines, is about building an economic water shed for Apple. Sealing in brand awareness and brand expectations (quality, innovation, etc.), make no mistake, is all about coming back with the Macintosh, and with a vengence, and I believe, with an eye and strategy for the enterprise market place as well. What SJ has been doing since the mid 90's is basically building up momentum, a momentum that has never been seen before but is already very obvious to everyone. Clearly Apple is on a roll, and while some are desparate to make it look like a fluke, it obviously isn't, as Apple has shown overall steady growth for the last ten years now.

So, back to the original point, its not about the self-obsorbed music industy, its about selling desktop computing. Do you really think MS really cares about selling music? MS does not need to sell music to survive and remain the Godzilla of personal computing, but because of Apple's oblique marketing strategy, and the obvious element of surprise, MS has just recently awoken to the fact that Apple's various product lines are already more than a potential threat to it's own desktop OS products. Now, while Apple is swimming steadly and are pacing themselves for the long haul, MS is scrambling to get it's life-jacket on and get in it's lane to start the race. Apple is already way down the river and the implications are a lot less about who controls the music market and a lot more about selling desktops. MS still has the power to buy it's way out of this predicament, but it doesn't change the reality that Apple is way ahead in a technology and delivery service that MS is at best a johnny-come-lately in.

Now? Well, now it's up to the consumer to continue to support non-MS product lines, it is ultimately our hard earned dollars and cents that have put Apple where it is now with iPod and iTunes on both Windows and Mac. Apple and SJ have deftly manouvered themselves into a place where the consumer can finally vote with their wallets, and IF we're at the right point in this battle, no amount of money that MS throws at Apple's enemies or allies is going to change the course that Apple is currently on. It's not about the music...

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