BusinessWeek writer: Microsoft will eventually dominate online music which ‘may be the best outcome

“Imagine buying a CD at Best Buy only to discover that it won’t work on the CD player you bought at Circuit City. Absurd as it sounds, this sort of situation is the rule rather than the exception in the world of legally downloaded music. This maze of incompatible standards is a threat to online services such as Apple Computer’s iTunes Music Store,” Stephen H. Wildstrom writes for BusinessWeek.

“The situation is both baffling and infuriating. My iPod can play all the MP3s I rip from CDs or pull from KaZaA (if I used it), but when it comes to legal downloads, it works only with the iTunes store. The Roku SoundBridge that connects my stereo to my computer’s stash of digital music can play everything in my iTunes library that I digitized myself — MP3s and the like — but not iTunes Music Store purchases. Similarly, other players handle only music bought from a specific service,” Wildstrom writes.

“Microsoft holds the high cards in this game. Much as I hate to see the colossus of Redmond end up dominating yet another market, I believe that is going to happen, and given the current state of affairs, it may be the best outcome for consumers,” Wildstrom writes. “In the end, what consumers care about is getting the music… they want and having it play without hassles on the device of their choice. Microsoft’s big-tent approach offers a way out of this morass for everyone, except perhaps Apple.”

Full article here.

MacDailyNews Take: Reality check time: over 90 percent of the players in actual people’s hands today are iPods. The iTunes Music Store works on both Mac and Windows and holds over 70 percent of the online music download market. Songs that aren’t available via iTMS can be purchased on CDs and ripped to your PC or Mac iTunes and then transferred to your iPod. Why would people use the Microsoft WMA “solution” when over 90 percent of them can’t use it on their player of choice, Apple’s iPod?

“The situation is both baffling and infuriating.” Yeah, to Microsoft perhaps, not to consumers. While Wildstrom’s theories might look vaguely plausible on first glance, but they just don’t stand up to the reality that Apple is currently moving over one million iPods into consumers’ hands every 30 days. That’s over 1,000,000 fewer people shackled to Microsoft with every month that rolls by. Microsoft had better hurry up with this domination before they run out of potential customers.

Wildstrom wrote, “In the end, what consumers care about is getting the music… they want and having it play without hassles on the device of their choice.” They already have that, they’ve overwhelmingly chosen iPod and they can get the music they want with the most seamless choices available today – Apple’s iTunes Music Store or a CD ripped to iTunes. If Apple keeps executing as they have with iPod + iTunes, Microsoft has already lost; some people just can’t seem to be able to wrap their minds around that reality, yet. Look at it this way: which cards in this game is Microsoft really holding today? Tens of affiliated digital music players that almost nobody is buying and tens of online stores that sell files that don’t work with the player almost everybody is buying. Doesn’t look like a winning hand to us.

52 Comments

  1. “……@ mac dood.
    yeah you�re right, but you�re not fscked like german customers:
    Virtually all CDs you can buy here in germany are copyprotected……”

    matt…

    Just curious…. Awhile back, I remember reading an article explaining that the certain copy-protected music CDs could be defeated by using a black felt -tipped marker… I wonder if this would work for the CDs you have to deal with ?

    Also… I have never run into a music CD I couldnt rip on my OS 9 machine… even those with some sort of a copy protection scheme … but then again, the CDs in your country might be a horse of a different color ..

  2. Let’s see:

    Critics love the iPod. Consumers agree.

    Critics love iTMS. Consumers agree.

    What’s the problem? Here’s the thing. When people buy music, they buy the format which will work best for the player the have. Most people who have a DMP have an iPod. Therefore they buy from iTMS. I don’t see consumers complaining about iTMS. They have the best set up, and the biggest selection.

    Two analogies:

    1. Your favorite listening device is a CD player. You have two music stores in your neighborhood, right next to each other. One sells only CDs and one sells only cassettes. Which will you go to?

    2. You have two music stores in your neighborhood, both right next to each other. They both stock all formats of music and they have a similar selection, however, store A is clean, well kept, and you can always find exactly what you want, plus there are helpful employees who make great suggestions on other things you may like. Store B is always a mess. Nothing is organized and you really have to dig to find anything. And, the salespeople act like you’re a nuisance when you ask for help. Where would you rather shop?

    I don’t recall a single review of online stores ever saying the experience was better than Apple’s. The only reason to buy at another store would be if you were dumb enough to buy a DMP that was not an iPod.

  3. “Sounds to me as if this ‘Roku SoundBridge’ gadget is Mr. Wildstrom’s real problem.”

    True. However…

    Roku’s Soundbridge gets good reviews as a wireless music to home stereo streamer, even in Mac magazines. It seems to be a good unit with the exception that it can not stream iTunes AAC files. It has good looks, display advantages, and a REMOTE control.

    Sure, the author would have fewer problems if he were using an Airport Express, but the ball’s in Apple’s court to provide a display and, above all, the REMOTE control that home users want in all AV components. (When was the last time you bought a TV without a remote?) Even an iPod plugged directly into a stereo receiver doesn’t have a remote control that will work from your living room sofa, much less from another room.

    Of course, the Airport Express can do things the Roku unit can not do and it’s about 1/2 the price. However, as part of a home theater/stereo system, the “What’s playing” display and the remote control are essential. That explains the author’s choice and frustration.

    It’s time for Apple to provide with the “whole widget”, not just to control it.

  4. Yeah, right. As soon as Longhorn becomes commercially available, look out, world.

    I would think that most people have waited 10 years too long for Longhorn and are not entirely willing to wait any longer.

    Why do I have the impression that Microsoft’s most significant offerings are rumors and promises versus products?

  5. The most annoying part is that there have been many instances of copy-protected CDs not playing in standard players. His example is foolish because it is true, not false as he asserts.

  6. After much thinking, I am glad that FairPlay hasn’t been licensed out. If it had, it would be one step closer to being embedded in every CD sold. At least for now, CD’s are still ‘open’.

  7. As long as digital music players do not become a commodity item like portable cassette players and portable cd players became, then Apple has nothing to worry about. The day that flash memory becomes supercheap and at least 5GB of storage is the day Apple’s iPod will lose share.

  8. Just PIR (backwards for rip) to a CD (with iTunes, it’s even easy on Windows) and it will play everywhere!
    You should do that for backup anyway.

    Back-up back-up back-up and be happy, happy, happy!

  9. Sorry, MDN, the only way to win a war is to fight it. You don’t win by covering your ears and singing Mary Had a Little Lamb, no matter your current market share.

    Apple’s failure to license Fairplay to other companies for incorporation in *players* is perfectly logical. However, Apple’s reluctance to license Fairplay to peripheral manufacturers is idiotic–why would you NOT want your format to be the center of third party development, which Fairplay would be if Apple aggresively licensed it? Apple’s reluctance to license Fairplay to other online music retailers is also at best questionable–however, what really takes the cake for insanity is Apple’s failure to license Fairplay to cd manufacturers. If you bought a CD and it included Fairplay-protected AAC’s of all the tracks on the CD, that would be great for the consumer AND for Apple.

  10. Btw, there were many stories about Apple licensing Fairplay to Macrovision for incorporation in CDs back in August, with Q4 release stated. Well, we’re well into Q4–any updates? You’d think CDs for xmas-time release would already be printing or printed now.

  11. ****TIME FOR THE MOST VALID POINT ON MSFT’S ONLINE MUSIC****

    Why is Windows so popular? Because they were the first to license their OS.

    Why have they not lost marketshare? Because they kept that momentum.

    Now apply the following to Apple’s success with iTMS. They are the first major release, largest resource of artists (which in turn could be compared to Windows software supply). Apple has such a huge marketshare that Microsoft will be spending decades to catch up, just as Apple has in the OS wars. But, Microsoft doesn’t have the “umph” to be cool, successful, or competitive without having their foot in the door first; which they didn’t.

    My last outburst on the matter. Viva la revolution!

  12. Frankly, if all the online music store offered losslessly compressed or uncompressed music as an option, we wouldn’t have a problem (and better sound qualify for those who listen to music with halfway decent system). If the RIAA wasn’t so absurd with DRM, we’d have more options.

    But AAC is a true standard. WMA isn’t. So who really is causing an issue here? The DRM enforcers. Not the format supporters.

  13. Until your article mentioned a problem I didn’t know there was a problem. My children seem to like their iPods and have no problem obtaining music from iTunes. If they can’t get the music from iTunes they obtain it in mp3 format by other means. It seems that the two standards AAC and mp3 are plenty. Anyway I don’t think it really matters too much because like CDs distribution is changing rapidly with the advent of these small devices. I haven’t bought a CD recently and my children don’t use a CD player. CDs are for back-up. I read the article but it is a stretch to say… the problem is ‘incompatibilities’ between some management formats(?) since I understand that most of the legal catalogs are all the same. I am sure differences will ‘self correct’ any discrepancies since the kids will get their music someway.

    I don’t know what a Roku SoundBridge is, but my children just plug their iPods directly into their small stereos via the line out cord. I understand that I can broadcast to a stereo with what Apple calls an Airport Express, maybe this is similar to the SoundBridge(?), however, the kids don’t really care since they have their music on their pod already.

    If most of the latest music is made available directly to the pod via some other, simpler(?) mechanism rather than a computer I believe the kids will go for it. Direct to ‘pod downloading is the future and an RF ‘pod is only a matter of time with the music distributors adopting some sort of distribution model to provide a direct conduit to the iPod.

    For this year, if a few more iPods are sold it’s a moot point concerning the current DRM models… the game is pretty much up for MS and Real.

  14. Here is my e-mail to the author:
    “Music purchased from the iTunes Music Store (iTMS) will work on any modern PC or Macintosh that is equipped with the FREE iTunes software Apple provides. Hewlett Packard/Compaq is now distributing all of it’s consumer PCs with iTunes and QuickTime (the media engine behind iTunes) and Media Center PCs with additional software to allow integration of iTunes content and the Windows Media Center functions.

    Apple is not the “bad guy” in this story. Micro$oftopoly currently distributes a version of Windows Media Player for Macintosh that does not allow Macintosh users this same functionality. This is not a repeat of the mid-to-late 1980’s when Steve Jobs was not at Apple. Apple will license FairPlay DRM when the time is right and Steve Jobs has not yet seen that time as being right now.

    Apple is in the process of building up a market that it largely created (legal music downloading) through a number of efforts.
    1- Mac & Windows versions of the iTunes software.
    2- The iPod, iPod mini, and HP iPod.
    3- Motorola smartphones that will be able to play AAC/FairPlay content.
    4-BMW iPod integration
    5-Aftermarket Car Stereo Manufacturer iPod integration.

    At current, Apple holds greater than a 90% market share (with HP iPod included) of disc based portable music players and almost a 60% market share when flash-memory players are counted. The market has obviously shown a strong preference for the iPod regardless of what Desktop OS the consumer uses. The iPod will drive iTMS sales just as PC sales drive the purchase of Windows PC software.

    Microsoft sees this as a roadblock to their plans for their proprietary Janus DRM system. M$ wants to attach Janus DRM to all forms of media and sit back and get rich off of the royalties. The success of FairPlay DRM puts a huge dent into their plans for future profit. The issue is DRM- not music. The current battlefield is music, but the War is over DRM. FairPlay is available to all Mac OS X & Windows 2000/XP users while Janus is Micoro$oftopoly only. The problem is a familiar one: Micro$oft trying to leverage it’s near monopoly in Desktop OS’s to kill off a competitor in the marketplace. Open your eyes.”

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