U.S. lawmakers consider what to do about Apple’s stronghold on the digital music market

“A House panel appeared to rule out strict enforcement of digital music compatibility standards Wednesday, but left the door open for more indirect methods of curing the file-sharing industry’s iPod envy,” Elana Schor reports for Medill News Service. “Concerns had been mounting about Apple’s overwhelming hold on the digital music market after the company altered its iPod and iTunes technology to prevent the playing of files downloaded from competitor RealNetworks’ Harmony system.”

MacDailyNews Take: Okay, let’s get this straight: RealNetworks hacks a way to allow iPods to play music purchased from their online store without Apple’s permission, Apple continues to update iPod and iTunes as normal without considering (rightfully) if Real’s hack would break, and legislators are concerned about Apple, not RealNetworks? That’s pretty much par for the course in Washington.

“While considering action to force interoperability, which would ensure consumers greater access and would give artists greater royalties through a universal file-sharing network, lawmakers preferred to pursue competition as the answer. ‘Government intervention can probably prohibit innovation,’ said Rep. John Conyers, D-Mich., senior Democrat on the House Judiciary Committee. ‘Consumers will choose interoperability over closed platforms’ like the iPod,” Schor reports.

MacDailyNews Take: Consumers have already chosen and, in ever-increasing numbers, continue to choose the Apple iPod+iTunes solution that works on both Mac and PC platforms thereby providing more “interoperability” than the PC-only Napster, Real and other also-ran online music outfits. Perhaps legislators should consider action to force Napster, Real, and the rest to provide interoperability for Mac users? And, while they’re at it, are they going to legislate that Xbox titles should play on PlayStations, too?

Schor reports, “The iPod’s reign over the expanding digital music kingdom shows no signs of stopping yet, with Apple expecting to sell more than 15 million of its signature players this year. iPods can only play downloaded files from the iTunes online music store thanks to restrictions in digital rights management, or DRM. Both Rep. Lamar Smith, R-Texas, chairman of the subcommittee considering digital music regulation, and his Democratic counterpart Rep. Howard Berman, D-Calif., indicated their action would avoid forcing digital music providers into compatibility. That did not exclude forcing providers to warn consumers of their incompatibility, what Smith called ‘not a government mandate, but still full disclosure.'”

Schor continues, “Smith was as vocal as any in the industry in his skepticism of Apple’s closely guarded system. Turning down an invitation to appear before his panel did not endear Apple to Smith,” Schor reports. ‘Generally speaking, companies with 75 percent market share of any business … need to step up to the plate when it comes to testifying on policy issues that impact their industry,’ Smith said. ‘Failure to do so is a mistake.’ Dr. Mark Cooper, research director for the Consumer Federation of America, suggested a labeling program for digital music products, ‘but I wouldn’t necessarily want to get there,’ he added. ‘I may, if iPods had to be labeled, ‘This music can’t play on anything else.””

MacDailyNews Take: To label iPods as described above by the good doctor would be idiotic. iPods do not contain music at the point of sale and they support many formats for users to play once they are loaded with digital files. Apple iPod shuffle plays MP3 (8 to 320 Kbps), MP3 VBR, AAC (8 to 320 Kbps), Protected AAC (from iTunes Music Store, M4A, M4B, M4P), Audible (formats 2, 3, and 4) and WAV. Apple iPod mini, iPod, and iPod photo units play AAC (16 to 320 Kbps), Protected AAC (from iTunes Music Store), MP3 (16 to 320 Kbps), MP3 VBR, Audible (formats 2, 3, and 4), Apple Lossless, WAV, AIFF.

Schor continues, “William Pence, chief technology officer for Napster, the formerly illicit digital download program that has become Apple’s most legitimate competitor, was hardly threatened by Apple’s DRM dominance. ‘It does not seem prudent for [the] government to pick a winner in the continuing, but still quite early-stage, marketplace battle between Apple’s Fairplay DRM and its competitors,’ Pence said… Berman, who had gamely shared with Pence his young daughter’s troubles integrating Napster with the iPod, summed up his subcommittee’s conclusions. ‘I’ll quit bothering you and go to your message board,’ Berman quipped.”

Full article here.

MacDailyNews Take: It’s good that lawmakers seem to prefer a laissez-faire attitude towards digital music compatibility. Let the market decide; it’s doing a fine job all by itself. Consumers are making their choice, Napster, Real and Microsoft just don’t like the choice they’re making. If people decide that they really, really need to buy songs from Napster for some unknown reason, then they should buy a compatible player. Most people we know seem to choose the player first, not the online store, since playing music purchased from an online store is but one feature of the player. Napster and Real and the rest are understandably upset that everyone and their mother is buying an iPod. We have a surefire “iPod envy” cure: go make a better player, a better jukebox, and a better online music service than Apple’s iPod+iTunes+iTunes Music Store and stop whining about your inability to compete.

[UPDATED, 9:48AM]

Related MacDailyNews articles:
Napster is a joke – April 05, 2005
Napster CEO Gorog: ‘it’s stupid to buy an iPod’ – February 10, 2005
Napster’s ‘iPodlessness’ doesn’t bode well for its future – February 10, 2005
Napster CEO: We’re ‘the biggest brand in digital music, much more exciting than Apple’s iTunes’ – February 03, 2005
Cornell University’s Mac users ‘uniformly unhappy’ with Napster – January 19, 2005
RealNetworks ‘Harmony’ stops working on iPods but nobody notices for a month and a half – December 15, 2004
Apple’s latest iPod updates render RealNetworks’ ‘Harmony’ songs unplayable – December 14, 2004
Bono-Glaser photo caption contest now open – October 25, 2004
Real’s CEO Glaser: ‘Harmony’ hack legal, Mac lovers are very sensitive to Apple criticism, and more – September 14, 2004
Cornell University wrestles with Napster’s exclusion of Mac and iPod-using students – September 08, 2004
Why are Cornell’s Mac students being forced to pay for useless Napster? – September 07, 2004
Analyst: Rob Glaser’s ill-advised war against Apple ‘is going to bite RealNetworks on the ass’ – August 30, 2004
Rob Glaser interviewed about achieving harmony with Steve Jobs – August 17, 2004
RealNetwork’s CEO Glaser crashes Apple’s music party – July 30, 2004
Real CEO Glaser: Steve Jobs’ comments on Real ‘not succeeding’ are ‘ridiculously humorous’ – April 29, 2004
NY Times: Real CEO Glaser was close to having ‘iPod’ before Apple, but let it ‘slip through his fingers – April 24, 2004
Real’s CEO Glaser: Apple’s iPod/iTunes combo ‘threatens to turn off consumers’ – April 20, 2004
Jobs to Glaser: go pound sand – April 16, 2004
Real CEO Glaser begs Apple to make iPod play nice with other music services – March 24, 2004
Napster CEO: ‘it would be great’ if Apple iPod supported WMA – March 09, 2004
Napster CEO: Apple iTunes, iPod ‘consumer-unfriendly experiences’ – March 09, 2004

73 Comments

  1. It’s interesting they are considering this sort of action at such an early stage… yet they have been, and continue to be so lax on Microsoft’s strangle hold (and complete predatory behavior) in all other markets.

    I guess I’ll never figure out how a politician’s mind works.

  2. These guys make so many mistakes in their statements it is obvious they don’t have a handle on the real situations themselves. One of their staff probaby is “briefing” them and they are just manufacturing sound bytes based on their sketchy understanding.

    I can’t believe that forcing the iPod to play Microsofts proprietary WMA DRM files will ever be possible from a legal standpoint. So they are left with this bogus labeling thing which would would probably not do much to change the situation since the only label they could probably legally enforce would read: “This product can only play the following file formats: bla bla bla” or at worst “The only legal download service this player is compatible with is the iTunes Music Store” Neither of these would probably hurt iPod sales much.

    Now if they REALLY wanted to make a difference they would force Apple to license out AAC/Fairplay to other download services. But I think that this would be very difficult to push through legally also and I am not sure how they would handle pricing. But personally, I am of the opinion that Apple should eventually do this anyway and sew up the entire market but who am I to second guess them at their own game, especially when it is going so well so far without me (except as a consumer of course). ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

    All that aside it really makes me wonder if Microshaft isn’t perhaps doing some under the table lobbying to have something like this occuring at all when the industry is still so small compared to CD sales.

  3. dukemeiser

    I would bother to make a rational comment to your idiocy, but prefer not to waste my time on someone who would not understand.

    STFU.

    On a more constructive note, it’s nice to see that Rep. Conyers at least realizes that the iPod is not a closed model, even if Dr. Cooper and Ms. Schor don’t. Honestly, I don’t expect much of “journalists” anymore, but apparently they don’t require Logic and Critical Thinking in whatever school Dr. Cooper happened to graduate from.

    For a better article on this:

    http://www.internetnews.com/ec-news/article.php/3495791

  4. Let me get this straight:
    It’s o.k. for Microsoft to operate a monopoly on computer client and server software, but it’s NOT o.k. for Apple to do the same with Digital Music Players. Smells like a political I.O.U. being called in.

  5. Didn’t I read a story here about how the music industry is trying to INCREASE the price of download songs? And that Steve Jobs is the one fighting the increase?
    How much success will the music industry have if they can play the online stores against each other?

    “If you don’t like our record company’s price increase then we will just sell to Napster and you (Apple) will be left out!”

    They can’t do that now because Apple won’t let them.

  6. i can just see the flood of email and faxed petitions these guys are going to start getting from the mac and ipod faithful to stop what their doing. i agree w/schor apple should have sent a representative to speak to the committee, i don’t know may be a former vice president/board member. it’s give a sense of arrogance that could bite apple on the arse later.

  7. “Generally speaking, companies with 75 percent market share of any business…”
    -they should really be looking at the entire music industry. Right now the far majority of songs are purchased through CDs, which can play on anything. iTunes is such a small portion of the entire market that it can harldy be considered a monopoly. I can see only two conditions that could make this a monopoly.
    1.) If Apple made it so that the iPod could only play songs purchased from the iTunes Music Store and not songs from CDs or other sources.
    2.) If Apple made it so that songs purchased from the Music Store can only be played on an iPod and not be burned to a CD.

    Even if either if these things came about, it’s not like the consumer is forced into buying an iPod. If they don’t like it, then they won’t buy it. The market will work itself out.

  8. dukemeiser says:
    “leave it to a liberal to impose regulation”

    The reality is that politicians of all kinds of persuasions can seem to like to impose regulations (especially if we personally don’t like those regulations). So called “liberal” or “conservative” concepts are emotional/intellectual knee-jerk fantasies.

  9. I’ll testify here.

    This is a stalking horse for Microsoft. They are behind this in an attempt to use the very laws they were prosecuted with to attack a competitor so they can create a monopoly out of WMA. Lord knows they couldn’t possibly do it on the merits of the technology.

  10. we should not be suprised,

    al gore is a democrat in the board of apple, bush is republican … and republicans are only in favor of freedom when they can make a good profit out of it …

  11. With the idiotic war in iraq and then congress intruding into the life of that poor woman who was terminally ill it is clear that the American system of government is starting to falter – politicians are starting to intrude into areas that they should not and the truth is the first casualty.

  12. This article reminds me of the Ayn Rand classic book, Atlas Shrugged.

    Stupid *$%(#*%# bureaucrats. Before Apple there was NO legal music download ecommerce. Can’t they find some good to do for their proper constituency for a change, instead of perpetrating favoritism for their lobbyist controllers?

  13. henry:

    You got that right. What frightened me the most was when I read a quote from a Republican legislator (don’t recall who) railing against the Judiciary stating how insulted he was that the courts were “thumbing their noses” at the legislative and executive branches by not reversing the Schiavo rulings, and “something must be done”. ummmmm, I think the point of the Constitution was separation of powers, rather than rubber stamping, no?

  14. Hold on, how can any of this be the fault of “liberals”.

    I distinctly remember last November that the Republicans on this board were crowing that they’d won convincingly and that “liberals” were in retreat at every level of government.

    So, given majorities in both houses, how could it ever be the fault of “liberals” if Apple gets shafted. This, of course, in contrast to the last “liberal” administration which did at least try to hold Microsoft to account, and the “liberal” socialists in Europe that are now the only governmental body keeping an eye on MS.

    So, to recap, when “liberals” are running the Executive branch, but nothing else – everything is the fault of liberals. And when liberals are running nothing – everything is the fault of liberals.

    Some people really need to get their meds checked out…

  15. When is Ford’s day in court for having a 4 bolt rim insdead of a five bolt rim. What about dvd-r, dvd+r, who gets it there. Steve Jobs post just before mine is 100% right. Microshit can go F@#k themselves.

    PS. I will kick Bill Gates in the balls for a shinny new quarter.

  16. “leave it to a liberal to impose regulations”

    Oh yeah, conservatives NEVER impose regulations. I believe it was a conservative who just last week proposed criminalizing indecency violations at the networks. Instead of a fine for saying “shit” on NBC, you’ll go to JAIL for it. And it was conservatives who proposed exanding FCC jurisdiction (along with expanding definitions of indecency) to cable and satellite companies.

    Liberals aren’t exactly against regulation, but at least they don’t LIE about being against it like conservatives do.

  17. http://www.house.gov/conyers/

    2426 Rayburn Building
    Washington, DC 20515
    (202) 225-5126
    (202) 225-0072 Fax

    DCC Building, Suite 257
    15100 Northline Road
    Southgate, MI 48195 (734) 285-5624
    (734) 285-5943 Fax

    669 Federal Building
    231 W. Lafayette
    Detroit, MI 48226
    (313) 961-5670
    (313) 226-2085 Fax

    And all of your local reps are there too. Also check out http://www.senate.gov for your senators. I can’t believe that you didn’t all know this already. This is the real reason that crap like this happens, because us average joes don’t write anymore. Just write them a letter saying “Hi” once in a while, let them know who their people really are. Be an American, not a lazy dumbass who isn’t even registered to vote.

    No offense to those who do this, lots to those who don’t, and to those who can’t, well, you can still write a letter if you can’t vote.

    And no, I’m not a liberal hippie pot smoker, I happen to believe in more money in MY pocket, less in yours, and more than one car per person in my driveway. Money may not be important, but what it buys sure as heck is.

  18. Funny how you same hypocrites wanted them to jump all over M$ with sanctions and regulations, but you want them to keep their hands off on this issue now that Apple is involved. For the record, the government needs to stay the hell out of ALL technology business dealings period because all they’ll do is screw everything up royally. Let the market take care of itself, it seems to be doing pretty damn well so far…

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