BusinessWeek: Apple-backed AAC format beating Microsoft’s proprietary WMA in music standards war

Apple StoreApple’s deal with EMI to sell DRM-free, high-quality music “marks a fundamental change in the digital music landscape, a feat Apple is pulling off with increasing regularity of late. If I were an employee of Microsoft and involved with its confusing digital-music efforts, built around its highly DRM-protected WMA format, I’d be sweating right now,” Arik Hesseldahl writes for BusinessWeek.

“But one of the truly remarkable aspects of the pact is how Apple is pulling it off. Having floated the rhetorical trial balloon for selling unprotected music files via iTunes in his landmark essay ‘Thoughts on Music,’ Apple Chief Executive Steve Jobs in hindsight appears to have been deliberately ambiguous about the file format he preferred. It’s now clear why. He didn’t mean selling unprotected MP3s, but unprotected AAC songs. The decision will have important long-term effects, especially as more labels follow EMI’s lead.” Hesseldahl writes.

Hesseldahl writes, “Using AAC is brilliant for several reasons. First, for Apple, whose stated market aim is to do everything in its power to sell more of its highly profitable iPods (and beginning in June, presumably profitable iPhones), the choice of AAC means more non-Apple devices will be able to play songs purchased on iTunes.”

“AAC-format supporters include some notable names, including Microsoft’s Zune. So come May, the 16 people who own one will be able to buy EMI tracks from iTunes and presumably play them on that device. Sony’s PlayStation Portable also supports the format, as do a few of its Walkman-branded MP3 players. I can find one player each from SanDisk, Creative Technology, and Sharp that include AAC support. Palm and Research In Motion both support AAC via software that runs on the Treo and BlackBerry Pearl smartphones. IPod sales, which are crucial to Apple’s bottom line are unlikely to get much competition from these devices, as none are as good at the stripped-down interface, and none can touch the iPod’s inherent status factor,” Hesseldahl writes.

Hesseldahl writes, “The real target is Microsoft. What we now have is a good old-fashioned standards war heating up, and it is pitting the old foes Apple and Microsoft against each other once again. Saying Apple has the upper hand is giving Microsoft more credit than it deserves… All of those companies that have been ‘partners’ of Microsoft—Samsung, Creative, Archos, and SanDisk, to name a few—have been treated pretty poorly by Redmond recently… Those partners were all left holding the bag as Microsoft walked away from PlaysForSure, when it launched the Zune and the companion Zune Marketplace… The next generation of non-Apple MP3 players heading to market will be notable for two things: AAC support, and maybe, just maybe, a lack of WMA support.”

Full article here.

MacDailyNews Note: From EMI’s press release, April 2, 2007: “EMI expects that consumers will be able to purchase higher quality DRM-free downloads from a variety of digital music stores within the coming weeks, with each retailer choosing whether to sell downloads in AAC, WMA, MP3 or other unprotected formats of their choice.”

These retailers desperately want to sell music for the market-dominating device, Apple’s iPod, which supports AAC and MP3, among others, but not WMA.

Related articles:
InformationWeek blows it again: accuses Apple and EMI of ‘price gouging’ on DRM-free tunes – April 04, 2007
InformationWeek blows it: calls AAC Apple’s closed format – April 04, 2007
Red Herring reporter is quite confused about MP3 vs. AAC – April 03, 2007
JupiterResearch analyst blows it: ‘AAC isn’t supported by majority of digital music players’ – April 03, 2007
Apple’s DRM-free EMI deal ‘a master stroke that should cement Apple’s dominance’ – April 03, 2007
In Apple’s DRM-free EMI music deal, the big loser may be Microsoft – April 03, 2007
Apple’s DRM-free iTunes play trumps Microsoft’s huge bet on DRM – April 02, 2007
Norwegian Consumer Council senior advisor applauds Apple’s iTunes Store DRM-free music – April 02, 2007
CNBC video: Apple CEO Steve Jobs and EMI Group CEO Eric Nicoli – April 02, 2007
EMI’s Nicoli on DRM-free iTunes: ‘We have to trust our consumers,’ Apple’s Jobs: ‘right thing to do’ – April 02, 2007
Kudos to Steve Jobs and Apple for having courage to call for end of DRM and making it happen – April 02, 2007
Analyst Gartenberg: iTunes Store’s DRM-free music ‘a great win for Apple’ – April 02, 2007
Apple CEO Steve Jobs to appear live on CNBC within the hour – April 02, 2007
Apple: Higher quality 256 kbps AAC DRM-free music on iTunes Store coming in May – April 02, 2007
Warner’s DRM-loving Middlebronfman warns wireless industry it may lose music market to Apple iPhone – February 14, 2007
Monster Cable announces full support of Apple CEO Steve Jobs’ call for DRM-free music – February 13, 2007
BBC columnist doesn’t believe Steve Jobs’ Apple would stop using DRM if music labels would allow it – February 12, 2007
EMI may sell entire music catalog DRM-free – February 09, 2007
Recording Industry Association of America wants their DRM, calls for Apple to license FairPlay – February 08, 2007
Warner’s Middlebronfman: Jobs’ DRM-free music call ‘without logic and merit, we’ll not abandon DRM’ – February 08, 2007
Technology Review editor gets a lot wrong in his article about Apple CEO Jobs’ push to end DRM – February 07, 2007
Apple’s Jobs jolts music industry; Zune exec calls Jobs’ call for DRM-free music ‘irresponsible’ – February 07, 2007
Apple CEO Steve Jobs’ posts rare open letter: ‘Thoughts on Music’ – calls for DRM-free music – February 06, 2007

31 Comments

  1. “Using AAC is brilliant for several reasons. First, for Apple, whose stated market aim is to do everything in its power to sell more of its highly profitable iPods, the choice of AAC means more non-Apple devices will be able to play songs purchased on iTunes.”

    Am I the only one for whom this sentence makes no sense at all? Don’t these folks have editors?

  2. AAC: License available from Dolby Labortories.

    http://www.dolby.com/assets/pdf/press_releases/723_aac_pr_0203_MPEG4.pdf

    Better quality, smaller files, better licensing agreement

    MP3:

    http://mp3licensing.com/royalty/software.html

    Average quality, larger files, average royalty rates

    WMA: from “Big Evil” Microsoft. Need I say more?

    Wasn’t too hard to figure out what to choose.

    Nowhere does anything say these are Apple owned formats, so the implication that AAC is a format war between Apple and Microsoft is wrong.

    Apple is just backing a superior format that is open for license from Dolby.

    Now Dolby most likely gave a pretty sweet deal to Apple for advancing this format, but Apple has no control. Dolby could go rogue and gouge Apple later.

  3. They’re not going to stock suckling at the WMA teat. It’s a package deal– they get to associate with M$, the “giant” of the tech world in hopes of getting some extra scraps once M$ is done chewing up its partners. Oops, I mean competitors.

  4. The big picture is that Microsoft’s partners are looking for ways to distinguish themselves as separate entities from Microsoft. Indeed, the forward-looking execs know that change is in the air and that the boys from Redmond no longer have the cachet they once had. Look for Creative to lead the charge, followed by others, who will be branding their players as “platform independent”, avoiding the whole EU/US antitrust thing, and hyping up the whole mobility/freedom aspect.

  5. Quote DLMeyer– “This was from Business Week? The Reader’s Digest/Time for C-class execs and wanna-bees? That’s getting the word out to where it can do some good!!”

    That kind of press does Apple good wherever it is printed.

    PS–Regardless of your opinion of Business Week, it is worth noting that it has the highest circulation amoun general business publications (numbers from MDS):
    Business Week 971,435
    Forbes 907,266
    Fortune 855,208
    Mutual Funds 818,231
    Fast Company 683,499
    Inc. 658,788
    Entrepreneur 555,831
    Barron’s 302,722
    Industry Week 249,940
    Business Today 200,000

  6. “Using AAC is brilliant for several reasons. First, for Apple, whose stated market aim is to do everything in its power to sell more of its highly profitable iPods (and beginning in June, presumably profitable iPhones), the choice of AAC means more non-Apple devices will be able to play songs purchased on iTunes.”

    I don’t understand that statement. If Apple wanted more non-iPods to be able to play tunes from ITMS then they would’ve gone with MP3. I think they went AAC for 2 reasons. The obvious one is because that’s iPod’s preferred format since everything from ITMS is AAC already. But the 2nd reason just might be because AAC sounds a little better than an equivalent bit-rate MP3 according to blind listening tests. (And a LOT better than WMA.)

    http://www.rjamorim.com/test/multiformat128/results.html

  7. Mobile audio device makers are now free to release software for the Macintosh that will load these AAC songs onto their players! Previously there was no point because they needed protected-WMA format support which MS has never released for Mac. Maybe it could use AppleEvents to call iTunes and list unprotected songs and playlists?

    Here’s hoping for even more Mac software and innovation.

  8. Shogun
    “”Using AAC is brilliant for several reasons. First, for Apple, whose stated market aim is to do everything in its power to sell more of its highly profitable iPods, the choice of AAC means more non-Apple devices will be able to play songs purchased on iTunes.”

    Am I the only one for whom this sentence makes no sense at all? Don’t these folks have editors?”

    It makes absolutely no sense to me either. It’s a contradiction in a sentence.

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