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

21 years ago

“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]