Music industry pushing Apple, Microsoft to make DRM ‘interoperable’

“The music industry is pushing bitter technology rivals — most notably Microsoft and Apple — to shake hands in the interest of promoting digital downloads, Billboard has learned. Hardware makers and digital format developers, including many traditional adversaries, are engaged in private talks aimed at meeting the music industry’s goal of compatibility among competing digital music devices by 2005,” Brian Garrity reports for Billboard.

“‘There’s a substantial discussion going on among these companies about interoperability,’ says Paul Vidich, executive VP of strategic planning and business development for Warner Music Group. Consumers are embracing commercial digital music in increasing numbers, and the trend is likely to be aided by a Pepsi-Apple promotion launching Feb. 1 during Super Bowl XXXVIII. But incompatibility among certain digital music services and portable players remains an obstacle,” Garrity reports.

“‘Consumers are going to demand that there be interoperability in devices and software players,” Vidich says. Executives with knowledge of the talks say much of the focus is on transcoding — the process of converting a file from one format to another,” Garrity reports. “It is impossible right now for consumers to directly convert a file protected by one type of digital rights management (DRM) into another type of secure file.”

Garrity reports, “While this is not specifically an Apple and Microsoft matter, many of the practical issues center on compatibility between the two tech giants. Music from Apple Computer’s iTunes Music Store — the leading seller of digital tracks — cannot be transferred directly to any portable device other than the iPod. Those who compete with iPod by and large support Microsoft’s Windows Media Audio (WMA) format. At the same time, tracks from every other legitimate service — a field that includes Napster, MusicMatch, RealNetworks, Wal-Mart and Sony — are incompatible with the iPod. To load iTunes tracks on a device other than iPod or to load songs from a rival onto Apple’s device, consumers must burn the tracks to a CD and then rip the tracks from the CD back to the computer in the MP3 format.”

“Executives at some device makers — such as Richard Bullwinkle, a senior product manager at Rio Audio — have complained that Apple has been resistant to overtures about making secure iTunes files compatible with other devices,” Garrity reports. “With Apple controlling much of the nascent legitimate digital music market, the onus for concessions in the compatibility debate largely falls on the company — a prospect one rival executive likens to ‘unilateral disarmament.’ “‘Increased operability is great for consumers. But if you’re in Apple’s situation, it’s not in your interest to do this,’ says a source.”

Full article here.

MacDailyNews Take: Apple has the number one legit online music download service with their iTunes Music Store. Apple also has the number one player, the iPod. Shouldn’t the rest of the industry embrace the Apple standard, just like every other standard that has come to the fore in other areas; or is Apple a special case to these people? Don’t change a thing Apple – you’re winning the war.


  1. It’s important that all manufacturers agree on how the DRM that is encoded into AAC is interoperable, but WMA does not need to be included. I feel consumers will continue to reject WMA, but unless Apple are planning to release an entire range of audio products for all tastes and budgets, they cannot seal WMA’s coffin with only the iPod. A partnership with Philips, JVC, Panasonic, B&O etc that allows Fairplay encoded files to be played on their digital audio devices (believe me, they will be working on them) is essential at this time. Apple get this bit right and Microsoft’s opinion will matter a lot less.

  2. “Shouldn’t the rest of the industry embrace the Apple standard,”

    I think they would like to but Apple wont let them. Hence the reference to “Apple has been resistant to overtures about making secure iTunes files compatible with other devices”.

    Apple is starting to look like a monopoly and should be made to open up its DRM.

  3. When nobody else had a workable answer, Apple stuck their neck WAY OUT and set up the iTMS. The GREEDY RIAA companies, instead of rewarding Apple with a period of exclusivity, let everybody but Roto-Rooter into the fray. Apple needs to walk a careful line on this. All the RIAA member companies see is MONEY and don’t give a damn about Apple.
    The sheer weight of the Windows/WMA format could crush them if it is not handled well. The obvious choice would be to add HELIX DRM to the iPOD, so that AAC files from RealNetworks can be supported. This adds to the support base for AAC (MPEG-4 Audio) and helps a natural non-WMA ally. Asking RealNetworks to drop WMA support in order to get Helix DRM on the iPod would be a fair option.

  4. But I’m sure the record companies don’t care about who has what DRM. They’re there to push thier product which is music under thier lockdown. A move like this would work because they want everyone who has an MP3 player to be able to buy (read: rent) thier songs from anywhere. The only favorite they’re playing is thier own, they want to sell music, and I’m sure they don’t really care how it’s packaged. They’re in the music business, not the technology business

  5. I have to go with Steve Jobs on this one. The whole reason that the iTMS exists is to sell iPods. If you want your device to play AAC with Apple’s DRM then you either need to OEM the iPod from Apple or license the Apple DRM system for non-portable music players. If you allow people to play the iTMS files on other players, it kills the iPod sales.

  6. I agree with ‘john’. The article says Apple won’t play. I can see Apple’s position on this – licencing up AAC/Fairplay will not sell iPods, and won’t make as much money as iPods.

    I also agree with ‘NoPCZone’. Making Helix work on iPods would seem to be a win-win to me. After all, Apple says the money pickings are slim for music downloads. Let Real do the work, and sell the iPods to play the music.


  7. “Apple is starting to look like a monopoly and should be made to open up its DRM.”

    Do we really want to have this conversation John? How much money is Apple making off this “Monopoly”? Compare it to the shit Microsoft is doing and this is NOTHING! Apple is locking in their strategy which is sell iPods. It’s they’re technology so they have every right to go out and license it as they see fit. Their competitors made the mistake of going with WMA and now they’re starting to see that it’s a big problem for them. Apple had the momentum and they should have gotten on the train. If I was Apple I would wait until 1 or 2 of the services die off then license out AAC w/ Fairplay. Microsoft will be opening up their own store soon so do you REALLY think they are going to offer anything other than WMA? And, what make you think that Microsoft won’t try to lock in their own player? We already know that the Portable Media Player will only play WMA audio files and WMV(?) video along with MP3 and MPEG4.

  8. Mat: I think it is relevant to have this conversation yes. That is why I mentioned it. As to Apple not making money of the iTMS I think that is not entirely true. Have a look at: iTunes margins ‘exponential’ � Apple exec “According to Apple’s director of product marketing Chris Bell, “the Music Store has a positive margin that will grow exponentially”. If AAC/Fairplay controls most of the market and will not license it then they are a Monopoly. I don’t like Monopolies – Period. They are bad for the consumer. I say make the DRM/Format universal and let people compete on a level playing field. Just because MS has abused its position in the past doesn’t mean Apple should now do the same.

  9. Mat: I think it is relevant to have this conversation yes. That is why I mentioned it. As to Apple not making money of the iTMS I think that is not entirely true. Have a look at: iTunes margins ‘exponential’ � Apple exec “According to Apple’s director of product marketing Chris Bell, “the Music Store has a positive margin that will grow exponentially”. If AAC/Fairplay controls most of the market and will not license it t

  10. MDN’s take is a bit off base. Assuming everyone should except a format as standard due to it’s prevalence is what Microsoft is all about. I’d rather Apple plod along like they are and prove their format is better, not win by default ala MS.

  11. Hey.. I agree with Dave H. For this to REALLY work, Apple should license the AAC/Fariplay to other vendors to produce hardware. I think of Apple folks as “early adaptors”.. and so it with ITMS, iPod and pay downloads as well. How long before more and more folks decide that WMA has cheaper players, and is ‘good enough’ for the masses?

    Does anyone think that giving a 8 year old a $250 iPod to listen to Barny Songs makes sense? I think that Apple will contiune to garner market share with the iPod as the high end player for music, but unless they can manage to produce SOMETHING that plays AAC/Fairplay for people without $250, then guess who’s going to take over that share of the market?

    As a mature adult, who owns several Apple Products, including a G5, frankly $250 seems really high for a music player. Not that its not worth that amount, just that its more than i want to pay for a device like that.

    I suspopse its possible for Apple to stick to their current plan, untill they see their market share begin to erode, but by then it’ll be too little too late I’m afriad.

  12. I suspect that there is a lot more going on in these talks than this article says. Are they trying to get Apple to license FairPlay, or trying to get Apple to switch everything to WMA, or looking for some conversion process?

    Considering that a unified DRM would put control into one company’s hands, they probably will settle on a conversion process.

    I would expect the “music industry” (as represented by Warner, I guess), would like Apple’s solution better, because the DRM is separate from the music format (conceptually, at least). FairPlay could be applied to WMA files, MP3, Ogg, or whatever. But the slant of the article is trying to make Apple more reasonable, not make Microsoft more reasonable.

    It looks like Microsoft has maneuvered well, once again. By giving WMA away to music sellers for practically free, and by handling the tech stuff for them, they have amassed a lot of support for WMA. That is where the “pressure” is coming from. Apple’s market share against Microsoft’s irregulars.

    Apple will probably do nothing about this for the better part of this year. Then, I hope they put FairPlay up for licensing.

  13. Reading this site is swallowing a brain tumor sometimes.

    We have the extreme nitwits who state that the other compainies should use AAC/Fairplay when one of the points of the article is that they can’t–Apple won’t licence it to them.

    We have others suggesting that Apple hold out and try to win the format war. Read between the lines, for f-ck’s sake–they’ve pretty much won the format war.

    The other sites and harware companies don’t want to fight AAC/Fairplay. They want to license it.

    Ball’s in Apple’s court–do they want to use iTunes to force everyone else out of the player and online sales market, or do they want to licence Fairplay and make a vig on every track sold and every player sold.

    If any other company was involved I would be sure that they were going to keep kicking the other guys in the nuts for another six months and then license. But with Apple you never know–they do seem to have an incredible knack for rescuing defeat from the jaws of victory.

  14. P.S.: I think licensing FairPlay will not affect iPod sales too much, because iTunes would continue to work best with iPods only. The licensing would let other music seller’s use AAC/Fairplay with their own jukes, but the best juke would work seamlessly only with the best player. The only result would be a the ability to collect music from different sources.

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