BusinessWeek writer: Apple needs to firmly squelch Real’s Harmony

“As of July 27, consumers can go to Real’s Web site and download software, dubbed Harmony, that lets them play songs purchased at Real’s download store on any portable player they choose — including the iPod. What’s more, Real is in talks to license Harmony to other online stores that might also want to sell to iPod users — without Apple’s approval,” Peter Burrows writes for BusinessWeek.

“Apple CEO Steven P. Jobs should clearly and firmly squelch Real’s attempt to infiltrate Apple’s music empire. GartnerG2 analyst Mike McGuire sums it up: ‘At some point, Apple may decide to license [its iPod technology] to others. But they should do it for good business reasons, not because a rival issues a press release or some beta software.’ Apple isn’t commenting on Real’s move yet. But it’s almost certainly exploring the possibility of a copyright lawsuit. And that’s not the only option. Experts say it could require iPod owners to download a firmware upgrade the next time they try to buy a song from iTunes that would render Harmony useless — much as a security patch resolves a computer virus,” Burrows writes.

“If Jobs’s lawyers tell him it’s legally justified, the CEO might even consider an even more radical way of making his point: loudly inform iPod owners that Apple will no longer honor their warranty if they buy songs from Real or other rival online music stores,” Burrows writes. “Such a move might temporarily cast Jobs as the Darth Vader of interoperability to industry watchers. But in the long run, it’s in Apple’s best interest.”

Full article here.

MacDailyNews Take: We do not believe that Apple was caught off-guard with Real’s move and they have a number of options. We’ll just have to wait and see what Steve Jobs’ NeXT move will be.

68 Comments

  1. It’s no use saying ‘oh it gives the consumer more choice so Apple should let it be’. If Apple believes what Real has done will harm Apple and believes it to be against the law then Apple will act to stop it.

    In offering the iPod/iTMS package, Apple is engaging in wonderfully COMPETITIVE practices – NOT ANTI COMPETITIVE. The company is simply saying ‘this is the product which we are placing on the market stall, what has the competition to offer?’

    Real has decided it can’t/won’t provide a product which they can compete with Apple and instead of competing, it is attempting to steal access to the Apple package and in doing so dilute iPod/iTMS’ competitivness.

    If I came home and found a stranger in my house who claimed that – because he had managed to forge a key that fit my lock – he had every right to live in my home too and share all its amenities… I’d call the police quickly!

  2. john… it may seem simple… but it isn’t. The question is does DRM mean that it limits use and delivery method… or does DRM only limit use?

    If it’s legally meant to limit use, then surely any delivery method will suffice.

    Look at some place like a Walmart and an independent CD Store. They offer the exact same CDs but people will buy at one or the other due to quality of service, brand loyalty etc. Or they will shop at the one that gives them the best price, or the one with the most convenience, or the most knowledgable staff.

    Online stores are similar… one may give better prices, or may offer different/more selection, or offer more information on the music, a better brand… one may be easier to use (apple probably will win this one). The point is, people buy from different stores for different reasons, and yet they all survive.

    I still haven’t heard one valid reason why this is a bad idea, after you put all the legal shmegal shtuff aside.

    Aside from the apparent legalities, is there anything really evil about Real selling music that plays on iPod? I suspect that if there is, there is also a problem with buying CDs from Walmart that plays on an iPod. Of course… buying anything from Walmart is a whole OTHER moral issue, but I won’t get into that.

    i wouldn’t assume anything when it comes to legalities… you know what happens when you assume…

  3. >If Apple believes what Real has done will harm Apple and believes it to be against the law then Apple will act to stop it.

    of course they would… all companies want to protect their profits. They’re certainly not into it for altruistic ideals.

    >In offering the iPod/iTMS package, Apple is engaging in wonderfully COMPETITIVE practices – NOT ANTI COMPETITIVE. The company is simply saying ‘this is the product which we are placing on the market stall, what has the competition to offer?’

    you also must add that is also offers MP3 and AIFF into that family.

    >Real has decided it can’t/won’t provide a product which they can compete with Apple and instead of competing, it is attempting to steal access to the Apple package and in doing so dilute iPod/iTMS’ competitivness.

    No, it is deciding to standardize its music formats to all players. It will support the most popular music players, rather than focus on hardware. It’s much like after-market companies target the most popularly modded cars.

    >If I came home and found a stranger in my house who claimed that – because he had managed to forge a key that fit my lock – had every right to live in my home too and share all its amenities… I’d call the police quickly!

    Good analogy. While we’re talking about free access… Apple has already let in a bunch of strangers (unprotected MP3, AIFF, AAC files) which could’ve come from anywhere (including pirated sources) and come and go as they please. The Apple house doesn’t have locks…or at least it doesn’t have windows. (i know, so punny).

    However it does have a perimeter alarm.

    It’s like a piece of music has one of those security bracelets they put on criminals under house arrest (like Martha Stewart will be ” width=”19″ height=”19″ alt=”grin” style=”border:0;” /> ), where they’re confined to the Apple house and can’t leave the perimeter. Real has basically said we’ve put security collars on our music too, that are compatible with the Apple system… or another system that you choose.

    And yes, there ARE ways of taking OFF the bracelet, which is illegal, but doable… but putting on one and limiting oneself to the confines isn’t illegal. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

  4. If it is a good analogy then perhaps we should continue it… Steve Jobs may – out of necessity – accepted a bunch of grubby low-lifes and hippies passing through his pad (errr, pod) – some of whom possibly have suspect backgrounds (pirates, no questions asked). BUT they are seen as pretty harmless and are not there to rip him off. The squatter I’m talking about is a tradesman who is claiming a right to set up a market stall in Steve’s home, offering the same products as Steve, in order to grab some of the rewards which Steve’s well designed and unified house should rightly profit him.

  5. “Fairplay DRM is a privately owned DRM technology.”

    No, it’s not. The only thing Apple owns is the copyright on their own implementation of FairPlay and the “FairPlay” trademark. FairPlay is not patented so Apple can’t stop anyone else from writing their own implementation.

    “There is, of course, another way of looking at this: AAC vs WMA.”

    Real’s store sells 192Kbit/s AAC tracks.

  6. Apple should keep Real under control. They should not squelch them as the author suggest. They need to make sure that their competitors are healthy, otherwise DOJ will be knocking on Apple’s door.

  7. Twenty… are you equating music ripped from your own purchased non-compressed CDs as “grubby low-lifes and hippes?”

    In any case, can one think there isn’t room for more than one music provider in the marketplace, just as there’s room for more than one CD store in any given city?

    Besides, Competition usually spurs innovation.

  8. The issue here is a company creating a commercial product that it intends to license (and make money off of) that intentionally dodges a DRM. From what I’ve read, it currently does not allow these tracks to be transferred to iTunes, just to the iPod. However, what’s to stop them from making that slight adjustment (if it isn’t already capable of it under-the-covers)? It’s like those crack programs for other commercial software packages out there. If Real gets away with this, then those crack programs become legal and legitimate. Can someone tell what’s the difference, if there is any?

  9. If Apple licenses Fairplay, that would be the death knell of M$’s “Janus” and WMA files.

    Forget about REAL, they are losing money and will soon close their doors.

    M$ has tiered pricing schemes. Apple can do so as well. Apple can give a huge discount to people who use AAC + Fairplay exclusively, and at their normal price for people who also use REAL and WMA.

  10. I haven’t read all the comments, but after a few of them a strange idea crossed my mind. We have been looking at the “format” competition (ATRAC, AAC, WMV).

    Now it looks like the DRM formats are competing, fairplay, harmony, upuranus.

    What a tower of Babel.

  11. Harry, It is better to not say anything and be thought a fool than to open your mouth and prove it. I am far from a zealot and am glad to listen to opposing viewpoints. However as has been stated in a Monty Python skit, stating the opposite of what was said does not make it an argument. You do nothing but say the other person is wrong but do not back it up with any information. If my understanding of the DMCA (happy that I referenced it right?) is misguided than I will gladly admit that I was mistaken. If you would care to enlighten us all on the details of the law and how it is not applicable here it would give you some credibility. Otherwise your statements hold no more water than the “no I’m not, you are” that is so commonly heard on the play ground.

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