“When you buy a song, an album, or a movie, are you buying the content only in the form it comes in? If you purchase a song from Apple’s iTunes store, should you be able to play it on any hardware you want? Not according to Apple, which bundles each download with a ‘digital rights management’ scheme called FairPlay. When you pay 99 cents for the latest Sheryl Crow hit, it’s stored on your hard drive as an encrypted file. Every time you play it on your computer with iTunes or on your iPod, it is unlocked with a random encryption key supplied by Apple. FairPlay allows you to load a song on up to five computers and an unlimited number of iPods and burn as many CDs as you please. But you can’t e-mail a song to a friend, you can’t distribute it over the Web, and you can’t play it on anything but iTunes or an iPod,” Adam L. Penenberg writes for Slate.
“Companies like Apple claim that digital rights management—’digital restrictions management’ to critics—is a tool to dampen the threat of piracy, which the record industry claims has cost it billions in revenues. But DRM also locks consumers into using their technologies over those of competitors. The term ‘FairPlay’ is a classic example of technological doublespeak. Since Apple sells about 80 percent of legal music downloads in the United States, FairPlay effectively stunts competition and consumer choice,” Penenberg writes. “Besides Apple’s FairPlay, there are two other prominent digital-rights-management technologies on the market. On the software side, Microsoft has licensed Windows Media Audio, which comes equipped with a proprietary copy protection scheme, to Apple rivals like Samsung, the most popular digital music player in Asia. On the compact disc side is Sony’s “XCP” anti-piracy technology, which quickly earned a reputation as the most draconian system of them all.”
“While Apple stands alone and Sony self-destructs, Microsoft is practically giving away its digital-rights-management tool in an effort to pick up market share against Apple (so far with little success). We may even see a replay of the Apple-Microsoft battle over the desktop, which ended with Apple holding on to a tiny sliver of the computer market. There is, however, a big difference between then and now. Steve Jobs has a hefty market share and a massive content library made up of millions of songs at a price that people like. As long as the record companies license their content to Apple and consumers flock to the iPod, Apple is in a powerful—some might say Gatesian—position,” Penenberg writes. “What’s hardest for the consumer to swallow, then, is that anti-piracy schemes like DRM look like the subtle tactic of the monopolist. Neither Apple nor Microsoft is hurt by music piracy. Instead, they use it as a marketing ploy to force people to use their products. It doesn’t have to be this way. The companies could agree on one standard that allows people to play the music they lawfully purchase on whichever player they choose. The music industry is supposed to sell music, not the medium it comes in, right?”
Full article here.
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Okay, Apple and Microsoft could agree on one standard. Let’s travel to that Bizarro Universe, shall we? Welcome, how was your trip through the black hole? Now, since the de facto standard is Apple’s FairPlay (MPEG-4 Audio or Protected Advanced Audio Coding (AAC), .m4p) with nearly 3/4 of a billion files sold and 80% market share), shouldn’t Microsoft admit defeat? It follows that Apple should then license FairPlay to Napster, Real, Microsoft, Yahoo, and immeasurably hurt their own iTunes Music Store while giving their competitors access to tens of millions of Apple’s own iPods, right? Do you think Apple shareholders will go for that one? It is not in Apple’s best interest to help competitors take market share away from them. What does Penenberg want Apple to do next, contract out Jonathan Ive to design music players for Creative?
This is business. Not a commune.
The consumer isn’t finding anything hard to swallow, by the looks of Apple’s iPod and iTunes Music Store sales. Apple’s competition, what’s left of it, finds it very hard to swallow, for sure. Does Apple demand that Microsoft license them Windows API’s so that Windows-only software can run natively on Mac OS X? Did Apple admit defeat and drop their Mac OS for Windows? No, thank God, Apple does their best to compete in a lopsided market. So, now that the shoe’s on the other foot, Microsoft, Napster, Yahoo, Creative, Samsung, and the rest need to figure out a way to make a better product. Apple has done it with the Mac and today they are gaining share against Windows.
Why should Apple, or any company for that matter, give up what they have built simply for the altruistic benefit of their competitors? What’s in it for Apple? There’s precious little in it for the consumer. Oh sure, you might be able to save 10-cents on a single here or there, but it’s not like Apple is charging $2.50 per song. It’s 99-cents, folks. If you don’t like it, get another portable music player and pick your WMA-based store. Hope you don’t have a Mac, because those stores don’t support Macs (even though Apple’s iTunes and iTunes Music Store supports both Mac and Windows PCs). Oh, some might say they want a music subscription service instead. Okay, so go buy a compatible player, make sure you get a Windows PC, and sign up then. Nobody’s stopping you. “But I want it on an iPod,” some whine. Too bad. iPods don’t do subscriptions. Apple has chosen not to compete in that market. You might want a Sony PlayStation 3 that plays “Halo,” but that doesn’t mean you’re going to get it. Microsoft bought Bungie Studios for Halo because it helps to sell their Xbox, not Sony PlayStations.
Eventually, we’ll arrive at a unified music DRM. But, it’s not time, yet. Apple, of course, needs to continue on with what they’re doing: adding features to iPods and their iTunes Music Store and driving competitors into the ground mercilessly. It is not illegal to build a monopoly. It is illegal to abuse that monopoly to hurt competition. Ask Microsoft about that one. There are plenty of portable music players to choose from and plenty of online music stores operating from which to buy music. Apple’s not forcing anyone to buy an iPod or use the iTunes Music Store (iTMS). If you buy an iPod, you can rip CDs all day long and never touch the iTMS. Conversely, you can buy from the iTMS all day long and never use an iPod. iTunes software is free and available to both Mac and Windows PC users.
Obviously, Apple has built the near perfect mousetrap with iPod+iTunes+iTunes Music Store and competitors will have to figure out how to build a better one or die trying. Welcome to capitalism.
Related articles:
Newsweek columnist describes Apple as ‘self-serving perpetrators of toxic incompatibilities’ – November 14, 2005
Apple’s roadkill whine in unison: ‘incompatibility is slowing growth of digital music’ – August 12, 2005
The de facto standard for legal digital online music files: Apple’s protected MPEG-4 Audio (.m4p) – December 15, 2004