“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!
Oh and email him direct at: adam.livingstone@bbc.co.uk
I guess Dan Rather also caused the standard of ” journalism” in UK to tank as well!!!!
Yes, but there’s only one thing wrong with all of this indignation.
And that’s the fact that his story is largely based on reality, not MDN’s perception of reality which is based on someone else’s market research.
I live in the UK, and I know one advertising agency where a huge number of people have iPods stuffed to the gills with illegally-downloaded music because of any number of reasons, but including…
a) The user doesn’t have a PC at home, and the PC at work is locked down by – what I have to say is – the most self-important IT manager I’ve ever come across (and that’s saying something).
b) They do have a PC at home, but its an old spec and they don’t want to spend 8-10 minutes/disc ripping into iTunes.
c) They wouldn’t mind the 10 minutes, but their music collection is still “at home” i.e with their parents and they don’t have the space to store it at the shoebox which laughingly passes for their flat/apartment.
So before you go nuts, have a think that not everything MDN says is true – after all, where do they get their advertising revenue.
“If you’re Apple computers [sic]…”
Why the [sic] in this particular phrase? There’s no misspellings or anything…unless you want it to read
“If you’re Apple…”
or
“If you’re Apple Computers, Inc…”
Pretty pedantic to me…just like this post.
^
Its Apple Computer, Inc
Indicates an error by the author.
duper:
Yup, I just thought it was rather petty to use the [sic] tag there. We all know it’s Apple; just childish and high-handed of MDN to point it out (given that they don’t even know the difference between “cajones” and “cojones”).
But let’s move on, since it’s childish and high-handed of me to point this out anyway.
Wow, this guy is so wrong!
People don’t buy iPods because they have Fairplay songs. At least not today, and likely not for a long time. Let’s do the math: 42 million iPods/1 billion songs downloaded/25 downloaded songs average per iPod. But averages lie – it’s more likely that 90% of the people have less than 200 downloaded songs each. Would you choose another last year’s ho-hum iPod over the latest and greatest music player because you’re locked-in to a library of music that would less than 200 bucks to reacquire?
People buy Fairplay songs because they already have or want to have iPods. That’s why those really cheap knockoff MP3 players have made no headway against the iPod. And why the the more expensive, similarly priced knockoff MP3 players have made no headway against the iPod.
iPod, Killer.
OK MCCFR, what has Apple done to encourage that practise??
Nayway, the thread of the article is not freebooting songs, it’s Apple ability to rip off consumers by controlling the hardware as well as the software.
Apple is fighting the music companies to keep prices sensible. Livingstone is a complete and utter idiot.
@ Macaday >
1) I never said that Apple had done anything to encourage the practise.
2) Neither does the article: “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.”. This is especially true in the UK, where it is against the copyright laws to copy your own CDs to any other medium including a hard drive. The problem with too many people reading this website is that they think US federal law regarding fair use applies to everyone: here’s a newsflash, it doesn’t.
It’s nothing much, it’s called reading and comprehension…
I am out of the office. Please contact me via adaml@clickvision.co.uk
There is lock-in with iTunes. However it is not caused by DRM. It is caused by the ease of import/synch between the iPod and iTunes. As has been discussed, most of the music on peoples iPods was either imported off of a CD or otherwise procured, not purchased via iTMS.
As long as Apple can keep the iTunes/iPod synch proprietary, Apple has nothing to fear.
Now…if Apple has to open up the iPod to synch with other programs or to write software to enable other players to synch via iTunes, those scenarios are HUGE problems for Apple.
Who cares?
I mean really, is your life all about reading too much into every little thing that happens at Apple and Microsoft?
It’s like MDN’s sole purpose is to be Apple’s propoganda machine.
Pump up the brainwashed morons and send them after some dumb writer who wouldn’t get a hit traffic in the world if they didn’t create some FUD.
I say this, go out and get yourself a girlfriend, they are easy to find. Just ask if they are available and would they like to do something sometime.
It’s easy, if they say yes, they like you.
So everytime you get the urge to spout your dribble on this site, go find a new girl and ask her out.
Eventually you’ll be so good at meeting girls you wouldn’t think twice about coming to this miserable website.
Bye, I need to shag mine now.
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Hey other mark, agree with you 100%.
Apple knows that price and just works convenience are the keys to moving people to download music legally. DRM interoperability without a single standard will surely muck up just works.
It’s hard enough making a system with a single DRM standard but multiple players and stores work – i’m referring to the playsforsuremaybe system from MS. Imagine the mess if you have to work with multiple DRM standards. That’s why Apple says people will revert to piracy.
When will people ever learn?
I read this and I imagine Geico’s talking Gecko.
This guy obviously does all his reseach in the nearby pub. It’s all just a drunken round up of popular opinion.
‘Geeez another pint, Gov’
so apple have a monopoly , big deal
what aboot ms ??
ms own the bbc , thats why they’re going after them
i’d disband the bbc and stop the license fee , bbc = shyte
oh
and bring back the goodies !
It’s no secret that DRM was created by apple to convince,reasure and persuade the major labels to go along with the whole online music venture in the first place. However what a lot of people don’t know is there are other services like http://www.intomusic.co.uk is a good example, which offer mp3 format in higher sound quality which can be used on iPods, any mp3 player, mp3 phones. This is admitedly from independent labels, who in my opinion other the more interesting and credible music anyway. So instead of trying to force apples hand, people should vote with their feet or mouse.
I still don’t understand what all the fuss is about.
1. Buy DRM music from iTMS
2. Rip to CD, using ‘Audio CD’ as Disc Format in Advanced Preferences
3. Rip back into iTunes, using MP3, AAC (unprotected), AIFF or WAV.
4. You now have the DRM AAC files, a CD continaing music that can play on ANY CD PLAYER IN THE WORLD and also some unprotected MP3 files that you can do what you like with.
Is it me, or are all governments completely retarded?
MW: school, get back to school you silly French politicians.
Man you guys really need to chill out. I think that just because someone expresses an opinion that is not strictly in accordance with the mac doctrine he is going to slammed.
I love MDN and my mac but there is a real danger sometimes that the tribe exhibits real ‘you’re either with us or against us attitude’ so beloved of the certain neo con republicans i could mention.
and to state that the BBC is going down hill is just plain wrong. yes im a Brit and by default protective of the BBC, but this is an organisation that went head to head with the government of the day over the war in iraq.
name me one other global media organisation that has the whit to have an independent editorial policy and make that stand.
Which bring me around to where I feel MDN is going off line over the past year or so. The art of reason and Critique is a way to debate both side of an argument. No to slam immediately someone who’s point of view happen to be at odds or slight details are inaccurate.
Mac zealot yes.
Mac fundamentalism no.
As the saying goes. Not in my name.
oh and i forgot.
he nails the business model for itunes perfectly.
and i should know.
alimacsaid: “. . . but this is an organisation that went head to head with the government of the day over the war in iraq.”
Please. It grovelled at Blair’s feet, then bent over and let him have his way with it.
It isn’t tribalism when a reporter for the once-respected BBC screws up that badly — if he did. Who knows who paid him to write that FUD?