COMMENT Apple wants to dominate the digital music business. It's off to a good start with the iPod and the iTunes Music Store. But, says Charles Cooper, it could ruin it all by forgetting that the customer must always come first.
When Napster shut down in July 2001, remember how loudly the recording industry cheered?
After working long and hard to defeat their number one enemy, the music moguls celebrated their victory over the renegade download website.
Funny how the wheel turns. Three years later, the music industry is looking to digital downloading to help it end a years-long slump. At just less than $100m, the digital music market still constitutes a relative drop in the bucket when compared with the nearly $12bn CD business. But downloaders are now projected to make up 20 per cent of the music-buying universe within the next five years, according to JupiterResearch.
That shows how far the needle has moved. During the height of the Napster controversy, the sides remained too far apart to figure out how to make it work: You either believed that bits and bytes should be free or dismissed Napster as the epitome of corrosive cyberanarchism.
What a stale conversation - and one that missed the bigger point: Napster had the technology, Hollywood had the music and something big was on the horizon. If only the opposing sides could ever see the forest for the trees. That was not to be. The music industry was too afraid of losing control, and Napster couldn't run away from the fact that it was a clearinghouse for stolen intellectual property.
The future was put on hold until Apple helped break the stalemate with the introduction of the iTunes Music Store. Just as only Nixon could go to China, Steve Jobs had the credibility with both the Silicon Valley and Hollywood communities to change the debate terms. Apple deserves the kudos it's gotten - but will squander a lot of that good will if it goes ahead with an ill-considered jihad against RealNetworks.
The company had a classic hissy fit last week, after RealNetworks released its Harmony software.
RealNetworks had sold songs from its digital song store since the start of the year. But the files only ran on a handful of portable devices. With Harmony, songs sold from RealNetworks' online store will now work on a variety of portable players, including the iPod.
Apple came unhinged. A few days after the RealNetworks announcement, Apple hinted about possible legal action and threatened to block Harmony from access to the iPod the next time it updates the device's software.
The truth is that RealNetworks poses little competition to Apple, which has a huge hit on its hands with the iPod. Ditto for the company's music store, which has rung up more than 100 million downloads.
A history of bad blood between Steve Jobs and Rob Glaser, his opposite number at RealNetworks, no doubt plays into this developing novella. But ego takes a back seat to a bigger consideration: power. Apple would like nothing better than to exert Microsoft-like domination of the music business.
Too bad. In the struggle over Napster, the music companies turned out to be their own worst enemies. So intent on kneecapping Napster, they ignored the best interests of their customers - which would have been to find a way to coexist with the new internet technology. Is Apple going to go down a similar path?
Maybe big companies periodically can't help conducting business as if Tony Soprano were running the show. But I can't figure out who's looking out for the best interests of the user in this cockamamy story. It's a question that Apple can't answer with a straight face.
Charles Cooper is the executive editor of commentary at CNET News.com
Comments
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1. anonymous
Meanwhile Microsoft continues to crush competition wherever it begins to take root using any means it deems necessary. The Redmond giant gorilla forces hardware companies to bow to their will or suffer the loss of Windows licenses. Websites use proprietary Microsoft technology that forces their customers to use only Windows and Internet Explorer. The trail is littered with dead startups and innovation crushed by Microsoft F.U.D. Microsoft's customers are held hostage, unable to do anything but humbly plead for more security patches. "Please, sir, may I have some more."
And not a single word from Charles Cooper about it. No, it's Apple that is the source of evil in cyberspace. Gimme a break!
2. Kent Myhre
Again, the writer has little or no contact with the history of Apple and the Macintosh going back to 1982. History will not repeat itself. Steve Jobs did not make the decision to not clone Mac OS for x86 PCs. That decision was made after Jobs was removed by John Sculley and his crew of BOZOs in suits in 1985. Jobs will not make that mistake.
When the timing is right Apple will license it's DRM to others. The market place has already voted for iTunes...not Real or Sony or MusicMatch or Rio or Napster or and or and or....
The reality, that you and your colleagues choose to ignore, is that an iTunes/iPod user is not locked into the iPod. I can buy my iTunes tracks and move same anywhere I want and onto any player I want in minutes. The capabilities are built into the iTunes application whether it is mounted on a Mac or a PC.
Shame on you for giving your readers the impression that they have no choice via iTunes.
Do the research and quit reporting perspective. Do the facts.
And doing business with Rob Glaser and his crew it right up there with trying to deal with your friendly home town used car dealer.
3. anonymous
Apple has built a complete system that works, Real had to hack ACC because its losing millions and Napster is the cause of billions of dollars of lost revenue for the music business.
Why should Apple allow slackers take business away? Can you play Playstation games on an XBox? Can you take a pirnter cartridge out of a HP printer and put it in a Epson? These business are doing very well. Apple is doing the same.
A song is a song, people want a great experience, Real and Napster does not provide this.
Steve company figured it out, too bad for the rest.
4. anonymous
You might want to go to Real's site and check out their music store. It's Windows only. Same thing with Napster and most others. And you're promoting Real's position of choice?
You article just feeds the Real illusion that they are truly out for the good of the customer in promoting choice as their number 1 aim at 'creating' Harmony. It's more like a desperate attempt to save a dying music store.
iPods will play any of a number of music formats, including MP3, which is apparently the most popular format.
Apple has a right to profit from their own R & D and products. Why should Real be permitted to leech off Apple's hard work? I don't hear you complaining about the various music stores that only offer WMA encoding.
5. Apple_Master
Who really cares?? Speaking for myself I have obtained less than .5% of my music via online music stores. About 60% are from CDs that I owned, and the rest from "Other Sources".
Of the .5%, 100% of those were obtained from the iTunes music store. Why? Because it's simple, easy to use, and it just works.
Every one of my songs is in MP3 format.
Oh, and Glaser really is more of an "opposite", as you said, to Jobs. Glaser is a desperate man looking to for a way to make a sinking ship stay afloat a little longer.
Jobs has revolutionized, or rather CREATED, an industry and they want to protect their intellectual property. Why should Real, riding Apple's coat-tails, be allowed to profit (or attempt to) from something that they obviously can't do on their own.
Good for Apple. Why would I want plastic seat covers in my BMW?
6. anonymous
Articles like this are so off base it isn't funny. A Jihad by Apple? What a joke. Apple has every right to defend itself against criminal behavior such as RealPlay just as the RIAA had to defend itself against the criminals at Napster. Napster still hasn't recovered because of the stigma it will live with forever as those who aid and abet in the commission of crimes. I think the owners were lucky to escape jailtime. Just because they have the technology doesn't make it right. Counterfeiting money is easy to do with the technology, but those who create the technology also HAVE to ensure safeguards so that it can't be done. Napster refused to do that. As for RealNetworks, they're just as criminally liable for theft and reverse engineering.
7. anonymous
Cooper's opinion is crap! Apple has always been protective of its hardware and software, and although much predicted, has yet to meet its domize! Apple is THE innovater that everyone else tries to copy. IF the consumer doesn't want an iPod, then the consumer doesn't have to buy one. Hasn't stopped the iPod yet, has it?
8. anonymous
Charles, I think your commentary is a bit sensational and your conclusions that somehow Apple is being anti-consumer are off the mark.
Apple's response to Real was rather measured, I thought. They said they were stunned that Real would resort to "hacking" a solution when they were rebuffed in their effort to license Fairplay. And they said they would explore their legal options. As you rightly note, Real is no threat to Apple. Which is exactly why Real is not the sort of business partner Apple would pick to start a licensing program. That deal would hugely benefit Real and provide Apple with nothing.
This is about controlling business relationships, not the music market.
On the broader issue, as to whether Apple should license Fairplay to other music stores, it's not clear they should. If you buy an iPod, you can fill it with music at the iTunes store. It's the same music you buy at other stores. Is it really so consumer-unfriendly to limit where you buy the music? Especially if it allows Apple to focus on other things? I'm not sure there is a great hue and cry from iPod owners to have more choice in music stores. Can you point to evidence of that?
What I'd like to see Apple do is make the music I buy at iTMS and use on my iPod also work on other non-iPod-competitive devices. That I do see evidence for, in the recent Motorola deal. Or provide an Apple solution, as in Airport Express.
The jury is out on whether Apple will play this right, but the Real tempest in a teapot is NOT the test.
9. H.D. Ley
Last time I looked, iTunes and the iPod were the only tools that allow universal access to downloadable music by both mac and windows users. Everybody can use it to download and play music. Now, do you know that Real will not even allow a mac user to even enter its site for browsing or buying? Only windows users can enter, mac users are not welcome.
And what's up with this monopoly thing. Apple only has about 70 percent of the music download market. Why doesn't Real tries to go after the 30%. Now, maybe 30 % doesn't sound that great, but then consider that apple makes a living with only 2% of the PC market. Is apple throwing a temper tantrum to the government, or filing frivolous lawsuits, in order to gain market share? Nope. They just continue to work hard and innovate; like we are all supposed to do.
And why don't reporters complain that windows enjoys such a monopoly market in operating systems? Most analysts even seem to think that it is best to standardize on a single platform. Is this a double standard whereas when microsoft does it, it is good, but when apple does it is bad?
And why doesn't the government makes Microsoft stop selling windows for five years, or at least until apple can gain fifty percent of the OS market. Wouldn't that be fair and give the consumer more choice?
OK, enough with the sarcasm, the bottomline is that I am an iPod customer. I have two of them. As an iPod customer I am not in the least interested in shoppping anywhere other than the iTunes music store, the best purchasing experience. Apple should not squander time nor resources in making iTunes compatible just because some seedy company wants them to.
All apple needs to do is to focus on me, the consumer and customer, to make my buying and listening of legally downloadable music the best and most enjoyable experience possible. That's all.
10. anonymous
So let me get this straight... if my company makes a product, and a competitor hacks it so they can make a product that will take business away from me, I'm supposed to see that as a good thing? Even when that competitor talks about licensing that hack to my other competitors too? Come on.
11. anonymous
How do you keep a job?
12. anonymous
Actually, Apple's stance is GOOD for iPod users. Trying to intermix lower quality Real files with AAC is a bad idea all around. The iPod works because of its consistency. (Remember what happened to Windows PC users??) Muck with that and you could harm the iPod experience. Enough said, case closed. Apple did the right thing.
13. Anon
... Apple is keeping the customer absolutely first. Apple's iPod and iTunes combination is the easiest, safest and, so far, the best way to carry your music collection with you. With the iTunes music store you don't even have to buy the CD. The iTunes music store is a service Apple provides to it iPod customers, it is not intended to be all things to all people. Stop trying to make it out as the only source of music for the iPod. There is absolutely nothing stopping anyone from buying the CDs from Amazon.com for music that isn't available from the iTunes Music store and buying the CD comes with some tangible benefits that downloaded music lacks, such as better quality and no DRM. Aside from not having every published bit of music available for download from the iTunes music store, what reason would any iPod owner want to use any other music store. That just doen't make any sense.
14. anonymous
Real Audio is acting pretty hypocratic by complaining about Apple iPod/iTunes closed nature (for not accepting other DRM contained file formats), because Real Audio's .ra files are the most proprietary around and can only be played with the proprietary and costly Real Audio Player.
Long Live http://www.rogueamoeba.com and their Audio Hijack. I am sure Real Audio do not mind me ripping and converting their files ;-);-);-)
15. Jerry Koszut
Charles, it's time you get a grip on reality! Corporations only consider the best interests of the user if it coincides with maximization of profit...it's nothing more than a concidence when it happens.
16. David Richards
To hell with Realnetworks:
When they made new media players they did not think of the Mac users. It was always Windows, Windows, Windows, now that Steve Jobs and Apple have their own proprietary offerings and it is a market leader Real want to cry foul play.
Screw them.
17. anonymous
1. Misleading Headline peddles Fear.
2. Content does not live up to Headline.
3. "Little Threat to Apple" statement does not consider future support costs if Real is allowed to steal via Reverse Engineering.
4. Real has always provided predator software that hijacked your browser on install.
6. Real's Harmony site suports Windows users running iTunes, but Apple users are locked out.
5. The Customer has not been King for some time by the majority of Corporate America. Greed holds down that Crown.
6. Windows Press continues to advance the "Greater Good" concept against anything they want but cannot have legally.
18. Duncan Koss
I completely disagree. Harmony doesn't allow you to do anything you couldn't do already, but it has the potential to create a technical support nightmare. You could play song's from other stores already, all you had to do was convert the filetypes, which could be easily accomplished by burning then ripping. Since RealPlayer isn't controlled in the slightest by Apple, it could randomly not work (I've heard that Harmony isn't too reliable) and chances are that Apple's tech support would get the calls.
Also, on a side note, this seems to be making people forget that the iPod is not locked at all... it supports numerous open formats.
19. anonymous
I can buy a CD in any store I want to & it will play on any CD player I feel like playing in on...
I'd hate to have to buy Apple CDs & only be able to play them on an Apple CD player.
20. anonymous
Rip out any DRM for compatibility. That is the only answer for us, the consumers.