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BusinessWeek on Opening Apple's iTunes DRM
hype7 writes "BusinessWeek is running a very interesting story on Apple's foray into music, with a different bent to everyone else's. BW suggests that, instead of opening the iPod up to the world, Apple should instead license its DRM - 'Fairplay' - to anyone who wants to start up a music store. The upside is obvious: it would mean that Apple's music format, AAC, would become ubiquitous; Apple could quite feasibly make money on licensing fees (say 1 cent per song sold); and, it would just happen to stick it to Microsoft and the Windows Media Format. As the iTunes Music Store isn't running at a profit (or forecast to make a big one), having the Music Store clones eat into Apple's existing market share wouldn't be a problem; all these stores would be doing is building a bigger potential market for the iPod."
I agree with this article. Adding WMA to the iPod is ludicrous (as is Rob Glaser's plea to add other support....Real.....get real!). However, licensing the DRM to AAC that Apple uses would nothing but grow the iPod marketshare because no one could complain that the iTMS is the only place to buy music for the iPod.
However,.......based on Steve's stubborness and protectiveness of Apple, I am not going to hold my breath on this one. Having clones to Apple hardware is one thing and I can understand Steve killing that idea but this is so totally different. Steve readily admits that iTMS is not a breadwinner. But Steve is a just a bit too protective still to license FairPlay.
Here's to hoping.....
No trees were harmed in the composition of this; however, numerous electrons were inconvenienced.
Apple's DRM technology is FairPlay, and the files they offer for download on iTunes Music Store are AAC files wrapped in the FairPlay encoding.
I think that Jobs has his own plan in mind, though I hope he's included "flexibility".
Option 1: Stay Alone
This basically has the iPod and the iTunes Music Store (iTMS) working only together. So far, this situation has proven to be the case, and it's working pretty well: the iPod is the #1 selling MP3 player out there, it's making Apple a butt load of cash (and when you try to carry money in your butt you'll know what I mean), and iTMS is the #1 online music sales system by far - 50 million songs sold compared to Roxio's 5 million. Even comaring apples to , er, apples, just within the 6 months since Napster has been out Apple has made 5 to 1 sales.
If this continues, then eventually Jobs can force out all of the "for profit" music shops out there, and boil it down to just the "for advertising" places, like Wal-Mart, Coke, and Microsoft (which would really be looking to make Windows Media Audio the default standard).
From this, Apple makes AAC the next MP3, and their DRM becomes the "de facto standard" - even though nobody else can use it. Apple makes all the money, and they like it.
This will only come true, however, if Apple keeps a huge lead. What happens when Microsoft (MS) unveals their own online music store (didn't originally they tell folks like Napster that they wouldn't? Well, nevermind that....), sells songs for $0.50 each, takes a hit on profits, and basically acts like they did with Internet Explorer. (Ignoring any antitrust issues - not that Microsoft ever has had to in the past.)
So that goes to Option 2: License the DRM
I have the feeling that Jobs will release this if and only if iTMS and iPod sales start taking a dive. It's his "ace in the hole" to keep iPod sales alive. All it will take is him going to the other stores, making an offer, and then everybody can use the iPod with any service. Sure, it could hurt iTMS removing the one thing that makes it different from everybody else - but Apple is about the hardware.
But what happens if someone like Dell or Gateway come out with their own MP3 player that starts to make the iPod look like yesterday's bulky cell phone? That's when option 3 kicks in:
Option 3: License WMV for the iPod
This one only happens when things are dire and Apple feels they finally have to put in their chips.
The question is, how likely is either option to be? I can see Option 2 and 3 as "someday, maybe" futures. But as of right now, iTMS and the iPod rules the roost, and as long as Apple keeps that up for another 12-24 months, everybody else just in it to "make money selling music" will be so marginalized it won't matter. We're more likely to see Pepsi style promotions than anything else - though Apple had already keep an eye on possible cracks in their popularity: McDonald's may have dumped a iTMS deal in favor of a Sony Online Music one already, though of course nothing is official yet.
2 years I think the dust will be settled. Until then, I'll keep saving up to buy my wife an iPod mini. Hey, if nothing else, they're cute. And she still buys lots of CD's.
52 Weeks, 52 Religions with John Hummel
They've left a tantalizing hint - if you look inside the iTunes application bundle, you'll see an icon for ogg files. It looks like they were at least considering supporting it enough to provide artwork. It's possible it supported it internally, but the feature might have been removed before shipping for some reason.
Let's see...Apple puts only what you call an ineffective lock on the music you download, yet this is the reason you haven't signed up for iTunes?
What, are you waiting for a store to come out with *effective* protection which gives you even less of what you want? "Federal take-it-up-the-@$$" protection?
Apple has to put some kind of protection on their downloads to reassure the labels. You claim that it is only a token effort. Isn't that the best you can hope for? Sounds like Apple is slying doing you a favor, as opposed to the draconian measures they could be taking.