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journal: think
Apple should open its Fairplay format
The only losers will be the companies making iPod competitors, because they have little to no chance of taking over the market.
So it seems Apple is finding itself the defendant in an antitrust lawsuit of monopolistic proportions. As quoted:
Plaintiff Thomas Slattery’s lawsuit claims Apple configured the iPod so that it will play only iTunes files and not digital music files from competing vendors of online music. Apple has also encoded its iTunes files so they will only play on the iPod and not any other digital music player, the complaint says.
…
With respect to the “tying” allegations, the judge said Slattery was claiming Apple forces people who own iPods to buy music online only from iTunes and also forces iTunes customers to buy iPods to play the music they purchase.
So basically, since you can only purchase songs from the iTunes Music Store for your iPod, and since the iPod is so prevalent, Apple has a monopoly on iPod-compatible music store purchases. Nevermind that all the other music stores use a proprietary format from Microsoft that Apple is never going to support, regardless of whether they have an online music store or not; it removes the power of consumer choice because, while AAC is an open format, the DRM that Apple attaches to it is not.
So Apple should open up their Fairplay format, and allow other companies to license it for their own music stores. What do they have to lose? They already control the vast majority of the music player market, and it’s common knowledge that the iTunes Music Store is nothing if not a sales tool for selling more iPods. If Apple allowed other companies to sell songs in the same format as they already use, it would sell even more iPods because consumers would have a wide range of choices for buying songs online, from cheap 45¢ Real songs to Apple’s 99¢ to who knows what else would be out there. Companies would sell songs in AAC format because they would work with the leader in the MP3 player market, hyping the iPod more than it already is. Additionally, labels that aren’t on the iTMS (*cough* Apple Records *cough*) could sign up with another music provider, or sell their own protected songs, and still be usable on the iTMS.
Besides, it’s not like Apple has to worry about being put out of business by their competitors. The iTMS is currently one of the sleekest, smoothest stores out there, so people will keep coming back because of the great experiences they’ve had buying songs online there. Apple might lose a few customers, but they wouldn’t leave in droves just because other music stores have iPod-compatible protected songs. If anything, the graph will flatten a little bit in Steve Jobs’s keynote presentation, but the increased iPod sales graph will more than make up for it. Opening up Fairplay is a win-win for almost everyone… the only losers will be the companies making iPod competitors, because they have little to no chance of taking over the market.
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| Arden | comments | views |
thinkback
As Bryan points out, the iTMS is too powerful for Apple to consider screwing with if they don’t have to. They may have a good position in the online music world, but they’ve still got plenty of distance to go in terms of the overall music market. And when you consider that they are just now starting the battle over digital video, things get even more complicated. Again, Apple seems to be in good position there, but the race is about as early on as you can get. They won’t risk breaking a strategy that is working for them so far unless they have no other choice.
As a consumer, I’m for more choice. I would love to be able to play songs I’ve purchased from iTMS natively on any device—car stereo, home stereo, jam box, etc.
Right now, I can’t unless I also buy Apple’s iPod and then buy adapters or special devices, which totally sucks.
Result—I only listen to my iTMS songs on my computer and I have stopped purchasing songs from iTMS because of this limitation.
As an Apple executive in charge of making Apple the most profitable, I don’t know what my decision would be. I can’t believe that there are many people buying an iPod simply because they want to use iTMS. I think it’s the other way around. People love the iPod and use iTMS because they own an iPod (ignoring a lot of people who don’t even have or want a portable player but buy songs from iTMS).
Is WMV open?
Is Real open?
Without breaking my NDA - I can tell you one thing. Your argument would assume that other companies WANT to license fairplay. What I can say is this - for certain competitors (such as the one I used to work for) they actively choose NOT to pursue fairplay, in order to maintain a good relationship with ANOTHER channel partner. So EVEN if Apple were to GIVE AWAY fairplay - there are those entities (some rather large BTW) that CANNOT and WILL NOT utilize that format. To put it bluntly, if you believe Apple is in the drivers seat on this, you would be wrong. Ultimately, lawsuits of this kind serve a different master, and it has very little to do with customer choice, and it has everything to do with ensuring a particular formats entrenched supremacy.
Hey Shempzilla,
Get Airport Express and enjoy your tunes on your stereo (and a nice wireless network in your home as a bonus). You’ll wonder how you could ever live without it.
I can’t think of a channel partner that matters more than Apple. The iTMS sells the majority of the songs being purchased, and now video (12 million sold so far).
I think Sony and Creative would jump at the chance of being able to play iTMS songs and videos on their devices.
If you are saying that Microsoft would stop licensing their DRM to Creative if Creative started offering players with Fairplay, I’d say that’s what Microsoft got in trouble with the DoJ before and would again.
I can’t think of another DRM that matters more to audio/video players than Fairplay.
But maybe I’m just ignorant on this. Maybe I’m missing something.
But HP and Dell had no problems selling iPods. Motorola has no problem selling Fairplay phones.
Is WMV open?
Is Real open?
It’s not about the file format being open. It’s about licensing the DRM to other vendors.
Microsoft has always licensed their format. Car stereos, boom boxes, portable players...all play Microsoft’s audio and video formats.
I don’t know if there are any devices that play Real at all. I think Real is in a different market. Maybe I’m wrong on that.
Neither Microsoft nor Real sell portable players.
If Sony were so eager to license Fairplay - (BTW not created by Apple - try veridisc) than why did they create ATTRAC?
Do not assume everything is cut and dry.
Also, ask yourself who orignally asked for DRM? Was it Apple....or was it the content providers?
And if they were so hell bent on a different DRM - why not hold out in the beginning when they had definitive leverage (remember this was before the Ipod was the monster success) The answers prove illuminating.
I’m really still amazed at all of this. The iPod was not the first mp3 player to hit the market. All of these other companies came out with products that effectivley shut out a Mac user - hardly any to no support at all. As a matter of fact, people would rudely say “go buy a PC” just to listen to music on the go.
So Apple purchases one of the Mac’s best mp3 player software and makes iTunes and makes the the iPod so MAC USERS can have an mp3 player. That does so well that they open it up Windows users.
It becomes HUGE. And through all of this, did any Mac support appear from all of these other companies? NO - except for REAL, after they tried to hack Fairplay.
Now we gotta deal with this whining (boo-hoo, I have buy an ipod to listen to my music)?
Deal with it, suckers. As a Mac user, I’m very happy with this arraingment.
Folks of the Entitlement Generation, Now Hear This:
TOO BAD that it’s a pain in the ass to convert proprietary formatted music to OPEN STANDARD-FORMATTED music files, so ya’ll can sustain the thievery of valid music property rights. But you can! Just burn from an iTunes Library to MP3s on a CD. Awwww, but ya’ll don’t wanna have to do this. Boo hoo.
Don’t like iPod & iTunes? Don’t buy one nor use iTMS.
If Sony were so eager to license Fairplay - (BTW not created by Apple - try veridisc) than why did they create ATTRAC?
I don’t see your point. Apple isn’t licensing Fairplay to anyone except Motorola. Correct me if I’m wrong. So Sony had no ability to license Fairplay.
Sony owns a music and movie business, so they have a lot of their own content. It behooves them to create a DRM for that content.
Also, ask yourself who orignally asked for DRM? Was it Apple....or was it the content providers?
Again, I don’t really get how this relates to whether or not other developers would like it if their devices could play files from the #1 music and video store.
I don’t really know if other DRM software did what iTMS needed when it debuted, and I don’t understand how that matters to our discussion.
Maybe I’m not the sharpest knife in the room today...
Who said Apple created Fairplay, anyway, and how does that matter?
I don’t recall the legal reason why tying in the IE browser into the Windows OS was considered illegal by the courts. I think it was primarily because MS, told Dell, HP and others that they could not do that without violating their contracts with MS regarding the OS. By the same token I am not sure on what grounds the EU wants MS to un-tie the WMA player either.
But this is not the case with Apple. Apple is not telling any other hardware of service provider they can have fairplay if they agree to do some thing else. Or that they can’t have it if they do something. I think their answer other than with Audiobooks and Motorola has been its not available for license. I can’t see why that should be illegal in the US. Can anyone educate us on why the argument Slattery makes has merit?
The iTunes store is potentially the most valuable property on the internet. It’s what was envisioned when the early media players (WM, QT, Real) were introduced. Many competitors want a piece of this property, and will do almost anything to get it. Some of them are the wrong people.
Look at it from a non-geek’s perspective.
A person goes to Best Buy for this newfangled iPod thing he’s been hearing so much about from his friends. Thanks to the iPod’s massive popularity, it’s easy to find and prominently featured, along with oodles of accessories. So he buys one and takes it home.
Let’s say he uses it for a while, and then one day he sees an ad somewhere for an online music store that isn’t the iTunes Music Store. He goes to this site and buys some music, only to find out that it won’t work on this dang iPod thingy that he spent so much money on. He doesn’t know or care about the difference between WMA and AAC; he just knows that he wants to be able to buy songs from this store and use them on his iPod.
I think that is the problem most geeks make when they look at this issue. The iPod is marketed toward normal, non-geeky people as well as us geeks, and normal people don’t know or care about WMA, AAC, DRM, or any other 3-letter acronyms. Hence, by essentially forcing users to buy songs from the iTunes Music Store for online iPod distribution, Apple is guilty of anti-competitive practices.
At least, that’s the merit of the argument.
Now, I’m not advocating that Apple completely open up Fairplay to anyone who wants to use it. They should limit it to online content distributors, because people will still have to use it on their iPods. If Apple allowed companies like Creative to build iTMS support into their players, people would be able to use iTMS songs on other MP3 players, which would eat into iPod sales. But if they limited it to companies like Napster and Rhapsody, they’d have the advantages of a large, competitive market for buying songs with only one line of products they work on.
Yes, the iTMS is a great asset, and I’m sure Apple doesn’t want to lose their foothold. But if this suit goes through and something has to give, this is the best way for it to happen.
iTMS is not the only store where you can download music compatible with the iPod. You can go to EMusic as well.
Apple will probably win the lawsuit. iPod users are not limited to the iTMS, they can load music from CDs by ripping to MP3s, which is an industry standard.
The fact that iPod owners cannot use other music stores, is just as much (if not more) the fault of the other music stores for not supporting MP3. There are many examples in the computer industry of applications having a proprietary file format (protected AAC) as well as supporting an industry standard format (MP3).
And iTMS customers can listen to their purchases on any Mac or Windows machine using the free iTunes app, or burn them to industry standard CDs that will play in any CD player. So there’s no lock in for music purchases. In fact, Apple has the most liberal policies of any online music store in terms of moving music to different computers and burning CDs.
It might even be hard to establish that Apple has a monopoly in either music players or online music stores. I don’t think it’s sufficient that a company has a high market share; there has to be some evidence of monopoly power such as the ability to raise prices. But the price of iPods has been going down (see latest Nano/Shuffle). And other music store owners have been touting subscriptions as superior to purchases, and Apple doesn’t offer subscriptions at all.
Yeah, Larry brings up a good point.
Should Adobe be sued because Photoshop won’t open native Painter files?
3DS Max won’t open native Maya files…
MS Word won’t open native Nissus Writer files…
I kinda saw this coming, though I don’t much care. If it means that soon I will be able to play the songs I bought from iTMS on my PSP (0NG $0NY!!11!), I’ll be happy.
Don’t like iPod & iTunes? Don’t buy one nor use iTMS.
Bingo! This is basically where I am, and it’s where I’ll stay for a while.
It’s not even so much that I have some dislike for the iPod itself, iTunes itself or the iTMS itself. All are perfectly decent options on their own, and combined, for a lot of people. But for me, it just doesn’t make sense. Most of what I like to listen to isn’t on iTMS. I prefer WinAmp as a music jukebox over iTunes. I would rather spend far less money on a device that relies on non-proprietary batteries, easy hard drive upgrades and allows me to manage my music adnd data through a file browser on any system as a removable HDD storage device.
So I just pretty much ignore it all, and i haven’t lost any quality of life - or more on this topic, music - by doing so.
Of course, this does come from a person who doesn’t buy much music at all, but rather prefers to swap and share livesets of electronica with some of the online communities out there. And that means that it doesn’t directly affect me - and that also means that it’s really easy for me to sit here and say that it’s not a big deal.
So that said, I realize that it’s easy for me to blow it off. But if I wanted an iPod but didn’t want to lock into iTMS, I’d be pretty upset. I would see that to this point, Apple had to do that to build a little legacy. But now that they’ve seemingly got things wrapped up marketshare-wise so tightly, why not open up the iPod? You could make it so iTMS is still locked to the iPod, but open the iPod so that any music vendor’s content could work with it. After all, the iPod does have WMA decoding capabilities built into the chipset - but turns it off. So it’s not like the iPod would need much added to it to allow this, and it could conceivably garner more sales of the hardware (which is what the money comes from, no?) to folks like this guy - who only seems to want to have a bit of choice.
In the end, business is business - and what a company does will be mainly to affect the overall success of the company from a monetary standpoint. And if Apple feels this way about it, I’m not sure what can be done.
It might be a dicey situation for some years.
For the record AAC (the DRMless format) was created by the Fraunhofer Institute w/ technology partners, Dolby Labs, AT&T;, and Sony. So why did Sony go with ATRAC.
Because they, like Apple, wanted something to call their own.
It’s not the music per se, it’s the broader entertainment of movies and TV. It’s going to involve subscriptions as well. While Apple makes little profit on songs there may be more profit in the upcoming multimedia entertainment on demand market. Apple isn’t going to give away the keys to music downloads and compromise their profitable future markets.
Bingo! This is basically where I am, and it’s where I’ll stay for a while.
OK. So it doesn’t even matter if Fairplay is licensed or not (the subject of the thread), you won’t ever use iTMS or the iPod.
Thanks!









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Arden, the idea that the store is just an iPod-selling device is just that, an idea. Spin. Apple has the ability to use it for whatever it wants...the store is power to them. I see no reason to limit the company unless it starts remotely exploding iPods on subway trains. So-called non-violent monopolies of this nature are nothing we can’t opt out of just like Windows.