“Nobody said the digital life would be easy. That’s a lesson the media industry is learning as its businesses erode thanks to file swappers on one side and the margin-squeezing dictates of Apple on the other. No matter what the industry does, when its products become digital, it loses control over them. Even with Apple and its amazingly successful iTunes store, the music labels have to sell their songs the way Apple tells them to: one at a time, for 99 cents each. Now, as Apple introduces video into the mix, the movie companies, too, are concerned about ceding control to Apple,” Erick Schonfeld writes for Business 2.0. “‘The content owners don’t like that,’ notes Stefan Roever, the CEO of a startup called Navio that wants to help shift the balance of power back to the media companies.”
Schonfeld then describes how a startup called Navio envisions people buying songs from artists’ websites, music blog affiliate sites, and any number of other sites using their DRM.
Schonfeld continues, “The key is getting around Apple. Come December, Navio will launch a new version of its service that will finally allow music companies to sell songs that will play on iPods without going through Apple’s iTunes store. How will Apple react to this news? “I think they will go ballistic,” Roever predicts, before adding, “There is nothing Apple can do to prevent this.” (Like RealNetworks before it, Navio has reverse-engineered the iPod’s Fairplay [sic] software so that Navio can deliver copy-protected songs in a format that will play on the device.) If nothing else, though, Apple can at least try to bury Navio with lawyers.”
Full article here.
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Buying songs from tons of independent web sites would be a royal mess. iTunes offers a single place and tools for finding and organizing media. A hodgepodge of web sites would offer nothing, but a massive step backwards into confusion and chaos. Sorry, record companies, but you can’t stuff this genie back into the bottle. It’s likelier that Rob Glaser will never again inhale a Krispy Kreme doughnut, Bill Gates will stop trying to mix the word “innovation” into sentences involving Microsoft, and Rob Enderle will win the Pulitzer Prize for journalism before startup Navio helps the record companies do an end-around Apple.
Apple won’t go ballistic over Navio’s reverse-engineered FairPlay. As with Real, nobody even noticed for a month and a half when Apple broke Real’s ironically-named “Harmony” hack, because nobody bought the songs. And Apple can easily prevent this sort of stuff, despite the typical hyperbole from a startup’s CEO. Apple can unleash the lawyers, but they can also update iPods ad infinitum to break any reverse-engineered FairPlay schemes from unauthorized, unlicensed third-parties.
Related articles:
RealNetworks ‘Harmony’ stops working on iPods but nobody notices for a month and a half – December 15, 2004
Real’s CEO Glaser: ‘Harmony’ hack legal, Mac lovers are very sensitive to Apple criticism, and more – September 14, 2004
Analyst: Rob Glaser’s ill-advised war against Apple ‘is going to bite RealNetworks on the ass’ – August 30, 2004
RealNetwork’s CEO Glaser crashes Apple’s music party – July 30, 2004
Definition of ‘hubris’:
“There is nothing Apple can do to prevent this.”
Stefan Roever, meet Apple Legal; Apple Legal, meet Stefan Roever…
still with the krispy kreme-glaser jokes? they’re not even funny anymore…if it all.
i’ll admit, the guy is a loser and the company stinks, but enough with the donuts. the guy’s company is tanking. make fun of that.
Another also-ran…Until FireFox can detect my iPod and automatically sync music I buy from a website to my “FireFoxMusicLibrary”, this will not be as convenient. And what will be the cost of this inconvenience? What, access to tons of old music no one listens to anymore for just $0.89? What, give record companies the ability to raise prices to $1.49 for new hits? Come on, bad business model.
The best thing record companies can do is embrace iTMS and get MORE of their catalogs on there. I just used Limewire to steel two popular songs because they weren’t on iTMS. I’m not about to buy a CD and get a virus, so that was my alternative because the music companies wouldn’t sell them to me when I tried to buy ’em.
MDN word: but
Quote:
“sell their songs the way Apple tells them to: one at a time, for 99 cents each”
Has this guy never used iTMS? Anyone who has knows that many songs (if not most) are also available in ‘albums’. The price is often even cheaper to buy the whole album.
What the record companies know but will never admit is that most albums aren’t worth buying. Consumers really just want one or a few songs from an album. This is one reason why the iTMS is such a hit. Consumers have choice and are not forced to buy a whole cd just to get one or two songs. This same reason is why P2P downloading is so popular: lack of coersion by the record companies.
MW: dark as in the dark forces of the record labels
I wonder where the price per song tipping point would be before folks, willing to pay for music, would go back to P2P? If I had to pay 2 bucks for a song I certainly wouldn’t be buying as much music as I am now.
Apple will have to let others use fairplay sooner or later. Apple will be better off letting them in on their terms than being forced to by court order.
Starting with a different music store, all using AAC/ with fairplay then letting hardware companies try and use those formats basically guarantee the ipod’s continued success.
And yes Apple will quickly turn into MSFT if they don’t share. Besides Apple sells two quailty products. Any other store will have to compete with both of those even if they are 100% compatible. And if Record labels try raising prices those stores will see less sales than Itunes Music store.
Lets see these guys come up with their own system then. Make your own iPod and iTunes like distribution system. Ha! In the meantime, since Apple has created both the hardware and software, they can run it as they see fit. And if they try to piggyback with their own reverse engineered DRM, Apple will simply break it with the next iPod/iTunes update, so who cares.
Those poor defenceless Media companies, being taken advantage of by Apple, not making enough money…surprised we don’t see them on the streets with begging bowls.
As far as Apple and iTunes squeezing Record companies profits, I thought it was the Record companies who took the lion share of the price…as Apple make their money via the iPods sold.
Makes you weep, poor little Record companies, down to their last few $ Billion, maybe someone will record a song to raise funds for them (no wait, that is every record)
MND- If nobody bought RealNetwork’s songs and nobody cared, why bother ranting about Real or Navio? Just let them support iPods! If someone living in the back of beyond wants a song that’s not on ITMS heck- just let them, and if they can get it cheaper… well that’s good ol’ competition for you, and that’s the real reason Apple WILL go ballistic. So what if Navio’s interface is lousy? Give the punters the choice. Let them vote with their feet (or fingers). Better still… license FairPlay. I’m telling you- Apple will sell more iPods, not less- and that’s where the profit is!
This quote just slays me:
“Imagine if you went to a music site to buy a single download for 99 cents, but instead you were offered the option to purchase the perpetual right to that song. With this right, you could download the song to your PC, your iPod, or your cell phone in whatever format was appropriate. And if you got a new computer, or if the digital-rights-management software protecting the file changed one day, you wouldn’t need to buy the song again. Your rights to the song would be stored online. Pay once, and it would be yours forever. “
If the record companies had embraced this concept 5 years ago (instead of trying to”rent” music to us) Apple wouldn’t have the dominance it now enjoys. I do not believe the record companies will ever agree to this model.
yeah, let’s not forget Apple owns the iPod and can update it as much as they want. Did this Navio not even read what happened with Real?
I’m going to write it one more time because I think it’s the last time I’ll ever write or hear this word:
Navio.
Geez, all record companys have to do is sell mp3 or AAC with no DRM. Now that would show some balls. They are way too paranoid for that.
“the margin-squeezing dictates of Apple”
…my understanding was that the record companies got a fairly good portion of sales via iTMS. Do they share in the cost of bandwidth, storage, or maintenance of iTMS? Didn’t think so.
” A hodgepodge of web sites would offer nothing, but a massive step backwards into confusion and chaos. “
This is true is the IF songs have their own DRM. There are sites that offer music <<gasp>> without DRM (!!!) and they are nearly as straightforward and as simple to use as iTMS. It does require the extra step of adding them to the iTunes library, but there is no confusion or chaos.
Obviously, none of the majors will ever give up on shoving their DRM down the throats of consumers or stop dreaming of charging $3 per track (this is what they call “creative” pricing), so confusion and chaos will probably be a theme in the record label created stores. Not only that, but their last efforts were pretty ridiculous.
When things go wrong and consumers again thumb their noses at these sites, they’ll then scream how Apple is evil for keeping fairplay closed. Boo fucking hoo. Sure, Apple should open the standard at some point, but wait until downloads are at > 30% of music sales and the digital music player market is at > 50% of its potential. Until then, Apple would be committing iPod-icide by opening Fairplay.
nah, i vote to keep the Krispy Kreme jokes going.
“And yes Apple will quickly turn into MSFT if they don’t share.”
I’m sorry but you couldn’t be any more wrong about that. Microsoft doesn’t make hardware. What they do is strong arm 3rd party hardware manufacturers into making their hardware work with only Microsoft software.
On the other hand, Apple provides both the hardware AND the software. Therefore it’s their choice how proprietary they want to make it. You simply cannot compare what Apple is doing to what Microsoft is doing in any way.
If margins are being squeezed its more likely that now people buy just the 2 maybe 3 songs on an album that are good for 3 bucks as opposed to wasting 17-20 bucks buying those same songs wrapped in the same package as 7-10 pieces of garbage.
Thats why they are mad. They dont like it that people are no longer forced to buy all the crap they’ve been forcing people to buy all these years.
If MDN ever stops with the Glaser-Krispy Kreme jokes, I’ll be very disappointed. We need some constants in life.
MDN MW: “central” – I used to visit Mac”Central,” but then I found MDN!
Amazing. Apple delivers THE music buying, listening flexibility and quality that was only dreamed about and half of the world wants to stick it to them.
As MDN says, it’ll be hard or impossible for the media companies to put the genie back in the bottle – or in other words – to get us to accept a worse, more expensive option than Apple’s!
MDN MW = JOB: Good job Jobs. Be a job to find better than Jobs.
Meant to give a shout to Bleep.com
No DRM. Enconding with VBR. Back catalog of stuff I’ve never been able to find on CD. Every major needs to learn from that site.
There are others, too, but that’s my favorite.
Keep the Krispy Kream jokes coming they are the best no matter what Carl says!!!! I love all things to do with Krispy Kream!!!
Synthmeister, that quote slays me as well, but for different reasons. He’s describing a scenario that already exists: Audio CD’s, Tapes, Minidiscs, Vinyl, basically anything without DRM. When you buy an audio CD, you have the perpetual right to everything on that CD (for personal use). You can convert it into any format you want. Hell, if you bought a vinyl record 40 years ago, there is no need to buy it again, just hook-up your stereo to your computer and create a digital copy that can be encoded in any format.
DRM is an attempt to take away certain rights we already have towards copyrighted material. Piracy is a weak excuse to take away personal rights, you could lock down the music all you want and there will still be piracy. I could pirate a song by recording the audio from free music videos on MTV or the radio, bootleg live recordings at concerts, and make copies from any device that has an audio output jack.
Now that $ony has and is being pimp slapped, Apple hand is stronger than ever!
Rock on SJ
I think that the guy missed the brief history lesson. The Dave Matthews Band (DMB), Madonna, and other acts, initially refused to participate in iTunes Music Store, and to sell their own music. The problem: who wants to go to fifty, sixty, or even 1000 websites, just to fine the music you want. Then lets multiple that by not being able to explore new music. I’m not seeing DMB recommending and selling Jack Johnson, Aqualung, or Interpol. Why do they think music stores were created in the first place, so people can explore and more likely spend more money.
That’s not to say, artist shouldn’t sell music from their websites, I just think it should be a combined effort. Songs available directly on the web and through iTunes.
Though in all honesty, I personally think artists who have access to sell via iTunes or even CDBaby, should then use their websites to give away promotional material or sell other items, like behind the scene videos, or pre-release material.
Yo, Carl
I still like the donut references and jokes.
emaN—that’s the crux of the problem. We see the ability to copy/transfer/record CDs and LPs (yes I have digitally recorded LPs) as a right and the record companies see that option as a detriment to milking profits out of their artists from now to eternity.
CDs will be the last form of semi-high quality distribution without some form of copy protection. Apple simply has the least onerous DRM.
talk about pissing in the wind…
Apple has no more right to dictate what SOFTWARE you run on your iPod than Dell, H-P, Sony or Apple have over what software you can run on your desktop/laptop computer. PERIOD. Apple can say that uploading software to the iPod that changes the installed software voids your warranty, but nothing more. PERIOD.
If Microsoft, or anybody else, wants to play hardball with Apple they can develop software that replaces the iPod software with their own and support WMA with Janus DRM or whatever. Apple can throw a fit, but ultimately it’s YOUR hardware. PERIOD.
Just remember, if you put unauthorized software on your iPod, Apple can refuse to support it. They can also void your warranty.
Reverse engineering Apple’s DRM is another matter and they could sue on that basis.
Based in Cupertino, Ca, USA
http://www.navio.com/pages/index.html
Based in Cupertino, Ca, USA
http://www.navio.com/pages/index.html
Based in Cupertino, Ca, USA
http://www.navio.com/pages/index.html
Based in Cupertino, Ca, USA
http://www.navio.com/pages/index.html
“…Stefan Roever, the CEO of a startup called Navio that wants to help shift the balance of power back to the media companies.”
That’s funny. It seems to me that this guy is basically creating his business to make the record companies happy by allowing them to charge more for songs than iTMS does. So exactly what is in it for the consumer? Hello, Earth to Stefan, you need customers to be successful! If you charge more than Apple, you aren’t going to have any customers. I mean come on, Real actually knocked their price down to 49¢ a song for awhile and no one cared.
I’m sure we’ll be hearing about Navio’s demise in the next six months.
Oh come on.. wait a minute… what company would actually make the investment into doing what you suggest? where is their return?
How many consumers would actually void their iPod warranties to “take advantage” of this?
In theory, you are probably correct, they COULD do it… but in practice? I think not.
“What the record companies know but will never admit is that most albums aren’t worth buying. Consumers really just want one or a few songs from an album. This is one reason why the iTMS is such a hit. Consumers have choice and are not forced to buy a whole cd just to get one or two songs. This same reason is why P2P downloading is so popular: lack of coersion by the record companies.”
cptnkirk,
Very, very well said. That’s the entire argument in a nutshell. People just can’t seem to grasp the fact that the iPod is popular because of the ease of use of iTunes, in the same way that they can’t get it through their heads that iTMS is so successful because it offers the convenience of one-stop shopping, a clean interface and consistent pricing model. A hodge-podge of websites and prices will turn off consumers quicker than a turd in a punch bowl, not to mention Navio’s stated intention of “shifting the balance of power back to the media companies.” Navio will win no friends among consumers with that mission statement. Navio, we hardly knew ye. RIP. Until somebody or bodies can come up with something not just better than the iTunes/iTMS killer combo, it’s all over but shooting the cripples.
Sorry, meant to say “Until somebody or bodies can come up with something not just better than the iTunes/iTMS killer combo, but dramatically better, it’s all over but shooting the cripples.” cptnkirk, that was a neat summary of the situation.
My, my. The irony: MW is “record”.
Record companies have screwed enough artists. I’m glad Apple has such a strong presence in their business and the success of artists. More obscure music can be heard, and sell songs. Not just the bold and beautiful model types who are the low level talent, the “processed cheese” musiciancs of today who provide eye-candy on MTV. MTV did kill the true musican who’s musical talent far exceeded any good looks or cover girl statistics.
We’ve taken a superficial step back in music, to the days of the 40’s era when handsome singers were hand picked by studios, who handed them songs and told them to sing into the movie screens and everything had the same cloned look and sound.
yea i can still handle the crispy creme references too, kinda goes with the fat lard-ass muthas that use dulls. (and create them)
This is so bizarre.
The bottom ine is media companies want to charge more.
So this new upstart will allow them to charge $2 and up for individual songs.
The media companies will probably stop selling on iTMS.
Don’t they realize people will refuse to buy music from any service at a higher price as much as they do at $0.99?
The Media companies will get their wish to raise prices but return to their downward trend.
Am I the only one that sees this happening?
Plus, if you buy a song from a competing service now and burn it to a CD. You can upload it into iTunes.
Yes, it’s not elegant but this sorta kills the claims that only Apple purchased music can play on an iPod.
– Guess this is the FUD the media is pushing as to why Apple is the bad guy.
Navio is a brief bandaid that will fail quickly
there is no consumer clammering to allow them to play their music bought from other services on the ipod….show me the evidence! Columnists and vendors don’t count. This is nothing about consumer freedom….the DRM and WMA compatible issue is a red-herring.
….Consumers simply aren’t buying their music from other services. The numbers show that. The union of folks who own an ipod and who buy music downloads from non-Apple sources is incredibly small. There is no evidence to the contrary.
….and it is not just because they love the ipod — the device.
Consumers love the full experience — from itunes (which came first), ipod (which came second) and the itunes music store (which came third). There is no value add – dollarwise or intangible feature — that the non-apple download sources bring to the table:
— they aren’t cheaper
— they aren’t cradle to grave – you don’t own the music
— they aren’t fully integrated every step of the way
— they don’t meet the quality expectations
There is no monopoly issue here either – there are other music players, there are other juke boxes, there are download services. Apple simply has the best and hottest product for now.
The market is talking — break Apple’s dominance by inventing a better/cheaper product and process. Become the next hot product. No one is stopping anyone from doing it.
…and last time I checked, I couldn’t turn my LPs into 8-tracks into cassettes into CDs into mp3s without jumping thru the same hoops you need to do to go from DRM AAC to AAC to MP3 to WAV to WMA, etc. You either jump thru the hoops or buy the songs again in the form and format you want.
Every startup -talks about breaking the grip of Apple becasue
the mention of the word Apple and DRM in the same sentence offer publicity on the net through sites like this.
So, they do work, Big deal. How much cheaper are they going to offer content – 95 cents ? 92 cents ?
and who exactly is going to risk failing to transfer a DRM crippled tune back and forth onto their iPod – to save 5 cents a tune.
They still don’t get it, – its the one click purchase & instant download experience that they have to match, not just the cents per tune.
And if the report are true, Apple’s per song margin is wafer thin, so anyone else will only survive if the big five (SONY BMG etc. ) offer the new start-up a special price per track; and that means the record companies will be subsidising the competition. I don’t see SJ getting upset about that too soon
“Buying songs from tons of independent web sites would be a royal mess. iTunes offers a single place and tools for finding and organizing media. A hodgepodge of web sites would offer nothing, but a massive step backwards into confusion and chaos.”
Wow. Look at all those independent companies selling things on the web. The odd thing is that no one would even consider coming up with some sort of scanner for these sites that would catalog the whole thing and create one destination that people could go to and comparison shop.
Well, except for <A >Froogle</A>.
So I could say, “Hey, I want last week’s ‘Lost'”. Fire up Froogle and I find that I can buy it from Apple at 320 x 240 for $1.99, I can buy it from HDVideosRUs at 1080p for $7.99, I can buy it from Microsoft Video store at 64 x 48 for $11.99, or I can buy it from Real at 480 x 320 for $1.99.
I know, I know. Competition is bad.
If they’ll offer better quality like 192kbps, I am in …
So, Mikko, what good is a tune at 192 kbps at $1.29 if it won’t work on your iPod the next time the software is updated?
“Productizing”? Navio using brain dead biz buzz words shows their true colors. They should stay in the Windows world.
This quote is great too:
“The key is getting around Apple.“ That sounds so innocuous.
It should really read: “The one enormous, breathtaking and almost insurmountable problem is that Apple has a death-lock on this market and it will take incredibly creative thinking and vast amounts of cash to even think of catching with them.”
Magic word: personal, as in “personally I’d would rather invest that kind of time, energy and money somewhere else.”
Buying songs from tons of independent web sites The labels start websites for their artists – selling from there is a form of direct sales. Independent websites would meet with the labels’ lawyers toute suite.
Crispy Creme was coined by a Japanese Canadian girl I knew in the 80’s or late 70’s. She used to kick her (cough) bloomers into a corner of the room and check if they landed Crispy Creme side up. Krispy Kreme’s one good donut is more lethal in the long run. No matter where you kick it, it always ends up trying to clog someone’s veins.
iTunes is not cheap at all, it sucks you into buying volume.
There is almost 3,000 items in my purchased playlist.
Also I wouldn’t have bought hundreds of cd’s before iTMS existed and it was just iTunes.
iTunes created the demand for media, I was quite happy watching TV and listening to the radio.
Navio will never get off the ground. Labels do NOT want to sell you universal rights in perpetuity. Why would they? History has shown, they want to sell you the same song, over and over and over again. They sold us LPs. They sold us casettes. They sold us CDs. They tried to sell us SACDs. And, now they sell us AAC files. The same song over and over again.
Navio is going against the tide here. Labels will not agree to their little scheme, certainly not for 99cents a track. And, what are these “bundles” that they want to sell? Doesn’t sound cheaper to me at all.
MDN–
Buying songs from tons of independent web sites would be a royal mess. iTunes offers a single place and tools for finding and organizing media. A hodgepodge of web sites would offer nothing, but a massive step backwards into confusion and chaos.
This was my first thought as well.