“If you’re Apple computers [sic], you’ll make more money by selling the iPods expensive and the music cheap. But if you’re (say) Vivendi Universal, you don’t get a slice of Apple’s hardware sales. So you want the iPod to be cheap enough that the punter buys into the technology but then spends the bulk of his money on downloading the music itself at a decent price,” Adam Livingstone writes for BBC Newsnight. “Now if you make either hardware or software you have the same two choices here. In a small controllable market you can sit down with your opposite number and work out a system that lets both of you make a profit. That might be illegal sometimes, but I’m sorry to say it has been known to happen anyway. Or you can let capitalism, red in tooth and claw, find a winner out in the jungle.”
“Which brings us back to iTunes. Apple’s fantastically successful music download service has been selling tracks by the billion to the public for three years now at low prices. The chaps from Silicon Valley have been making a pile of cash selling their iPods off the back of this while the poor music execs have had to cut down on the white powder deliveries by some margin. And for that they have the Internet and themselves to blame,” Livingstone writes.
“The billion dollar music download industry was spawned in the garage of a teenager called Shawn Fanning, just six years ago, when he dreamed up Napster, the very first mass peer to peer file sharing system,” Livingstone writes. “Napster had millions of people downloading music even before broadband got here, and because in those days it relied on piracy, the music was free and easy to download in the universally available format we now know as MP3. This was great news for Apple. They made a portable MP3 player, and the queues of customers in Apple stores with peg legs, parrots on their shoulders and who said ‘auuurgh Jim lad’ rather a lot soon stretched around the block. But if sales were built on the back of their customers’ piracy, that was hardly Apple’s fault. The fact that there were few strictly legal ways of filling an iPod with MP3 music was embarrassing but ultimately beside the point. The record companies were bleeding money to the pirates and Apple was cashing in. So when Apple finally offered to sell music online themselves, the befuddled record companies had no option but to try and claw back a few millions into the bank instead of the nothing they were currently making online.”
“How do Apple keep their competitive advantage? Their best answer is something called Digital Rights Management. They sell music online, but it isn’t sold in that universal MP3 format so beloved of pirates. iTunes music is only playable on an iPod, and then only by the person who pays for it. In other words iTunes is 80 per cent of the legal download market but you need an iPod to use it. But iPods don’t play the digitally protected formats used by other legal download services, so if you have an iPod and you’re law abiding then you’re locked into iTunes.”
Full article that’s centered on the proposed French copyright law here.
Livingstone’s piece would be a much more interesting and delightful work if based upon fact instead of fiction.
The facts:
• iPod owners are “substantially less likely to download using filesharing software with only 7% of iPod people downloading illegally compared to 25% on average. And they’re more likely to be buying CDs with your everyday iPodder buying 2.3 albums a month compared to the average of 1.8,” XTN Data reported in January 2006. XTN Data surveyed over 1,000 UK and US music buyers to arrive at the data. XTN Data also found that 50% of iPod owners regularly download music from Apple iTunes Music Store.
• Music purchased from Apple’s iTunes Music store (iTMS) is playable on Mac and Windows personal computers and Motorola phones, not “only playable on an iPod.” In fact, you don’t “need an iPod to use it [iTMS]” at all.
• iPods can play music transferred from regular audio CDs and accommodates the following formats: AAC, Protected AAC (from iTunes Music Store), MP3, MP3 VBR, Audible, Apple Lossless, WAV, and AIFF. Law abiding iPod users are not “locked into iTunes.”
• Livingstone needs to attend a class in basic journalism before he tries to report on anything again.
The BBC website states, “Your complaint is important to us. We hope you enjoy all the BBC’s programmes and services. But if you have a complaint, we want to know.”
Please send reasoned, level-headed comments to The BBC via this webpage form: http://news.bbc.co.uk/2/hi/programmes/newsnight/4349470.stm#form
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Related articles:
iPod owners significantly less likely to steal music than the average person – January 13, 2006
Microsoft CEO Ballmer: ‘Apple iPod users are music thieves’ – October 04, 2004
I, personally, listen to my music on my computer as well as my iPod…
OK, time to start filling up this guy’s email box. Another one has to be tought to actually use a product before you write about it. A shame that so many that are given the power of the press as a full time job don’t know how to use it responsibly. Let’s try to keep our emails clean, polite, and informative.
BC
But the facts don’t generate website hits. Why bother with simple research and the truth? I asked Marketplace (hosted by NPR.org) the same question a few days ago after their piece on France, iTMS, and the iPod. Same dribble.
“poor music execs”
I just finished eating lunch when I read this and promptly puked all over my monitor.
It is amazing to me how often the press reports about things they know nothing about. It makes a person wonder how much you can believe anything that comes from the media.
The iPod’s dominance was because of it’s ease of use compared to the other options on the market. Over 95% of the music on my iPod is DRM-free and just ripped from my CD collection. Asian tech companies can launch a thousand £50 iPodalikes, but if it’s too much bother to get the music onto the thing, nobody is going to buy it.
This appears to be lost on all the tech commentators. Adam Livingstone mentions MP3 as if it’s in the past rather than the most common music format in use, and MP3 is as portable as it has always been.
If the music industry would just sell their corporate shit tunes in MP3, nobody would be locked into any device. People want their tracks to be cheap, reliable and easy to find. As long as the service offers these benefits, people will choose to pay a few cents for a non-DRM’d track rather than wade through mountains of porn, broken files and viruses on Limewire.
My God. The British accent comes through perfectly in his writing.
Hitler had a rule about dumb and aggressive execs. Apparently, BBC doesn’t.
Macromancer, I think he was being sarcastic about the “poor music execs” line. I don’t think he really believes they had to cut down on their cocaine habits because of Napster. (Or if he does believe it, I he doesn’t sound upset by it.)
Where is the bloke’s email address? What a git!
Sorry, MDN, but expecting a level-headed response from this bunch might be asking a bit much.
“Where is the bloke’s email address? What a git!”
Isn’t it ericdano@gmail.com ?
Here is the “factual correction” link. They ask to not use this for commentary, but factual corrections. Well, I see a lot of correcting to do. I’m going here.
http://news.bbc.co.uk/2/hi/programmes/newsnight/4349470.stm
Smeghead.
What do you expect from the British press? They are always looking for controversies where there are none. The bad thing is, the BBC is about the best news source Britain has.
His £20 a pop DVD players are made from recycled parts. Mostly old computer DVD drives since replaced by DVD writers!
Dopn’t quote me but I’m pretty sure Apple uses new parts in it’s iPods not to mention DVD’s have been around for longer and soon to be replaced by HD-DVD or Blue Ray.
I’m not surprised by this level of reporting, the BBC has been going down hill for some time now.
I am MacDude!
I am a waste.
A simplistic piece from a non-tech journalist who hasn’t done his research.
Kelso:
What do you expect from the American press? They are always looking for controversies where there are none. The bad thing is, NPR is about the best news source American has.
Just as relevant, just as pertinent and just as pointless a comment to make. You’re obviously NOT British then…? Clearly you don’t know there are good news sources in the UK, as most other places in Europe…. [e.g. The Guardian, The Observer, The Independent, Libération, Le Monde, Corrierre de la Sera].
Good article. Why not take up the points he raises rather than the usual MDN hysterical over-take? Apple need to open up or shut up.
Whatever the accuracy or bias of its news reportage, the BBC tends to rile the bosses of whichever political party happens to be in power — so this broadcaster is probably doing a tolerable job, some of the time anyway!
However, it would be nice if the BBC was a little more Mac-friendly — even the videos are not in sensible QT format.
And sad to say, this article is no more accurate than dozens of other pieces I’ve seen on the subject…
The Financial Times, the Daily Telegraph etc are all excellent news publications..
and the BBC isn’t. The IT reporting is hopeless so this is par for the course.
I will advise them to read this page.
Ever since Itunes came out I have bought more music than I ever have in my whole life. I use to get music for free by ripping them off winmx and all the other filesharing sites. Because of Itunes I feel that I have started to give a little back to the artists even if they don’t actually get it. Itunes has changed the way I get music and I am sure I am not alone.
The biggest problem with this article is that it’s largely correct, but with a few major in accurracies:
1. It suggests that an iPod can be made for the same price as a crapo DVD player and therefore Apple is somehow ripping people off, but doesn’t mention that components like flash RAM or miniture high capacity hard drives are very expensive and not used in DVD players. DVD players are extremely mature products which have been around for a decade, components are cheap, that said, it will still cost at least £100 for one that gives a good picture and plays all DVD’s
2. 0.79p is no cost for a music track, but in fact is much more profiable than selling music on CD with the associated distribution costs
3. It also suggests record execs are happy about no DRM on their music, DRM is not there to prevent piracy, but to make it possible to sell you and I the same content over and over again. They are much more unhappy about what France is doing than Apple.
Unfortunately most people will not know enough about this subject and will come away with the idea that Apple is simply greedy and ripping them off, Job done.
…the poor music execs have had to cut down on the white powder deliveries by some margin.
You have to admit that’s pretty funny and truthfull!