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Apple Rejects RealNetwork's Pleas
TheJoKell writes "In a followup to a previous article, Apple has denied a meeting with Rob Glaser, Chief Executive of Real Networks, to discuss an alliance between the two companies. In an interview with the Wall Street Journal, Steve Jobs said, 'The iPod already works with the No. 1 music service in the world, and the iTunes Music Store works with the No. 1 digital-music player in the world. The No. 2s are so far behind already. Why would we want to work with No. 2?'"
It may be overused, but if there was ever a situation where the word PWNED was called for, this is it...
Jobs just PWNED Real!
Goo goo g'joob.
Real offered Apple zero in return, they just wanted to free ride on the success of the iPod. At least the HP deal will sell iPods and direct people to the iTMS.
So, if microsoft says: why would we work with #2 and stop making office for macs? And if IBM says: why would we work with the #2 processos archeteture (powerpc)? ANd if users say: why would we buy those macs that are the #3 (linux is surpassing macs)? Man! Can't we please leran to get a bit humble?
Wow. I couldn't even consider them on a top 5 list...
Hunt your preferred prey at Aliens vs Predator MUD. Join the war at avpmud.com port 4000
I like Real's Rhapsody service a lot and wish that it integrated well with iPOD. Having said that, it is just a business decision that is both logical and obvious to follow. Why would apple who has the number one music delivery service bow down to real? Doesn't really make sense to me. Unlike most people in ./ I dont bear hostility against Real, I think their player is easy to use and portable across many platforms.
Activists United
Considering Apple doesn't make really make money on iTunes, and the real profit is in selling iPods - does this really make sense?
I may have had too many beers to see the obvious, but why wouldn't Apple want to do this? If it only meant that Real would convert it's music to be compatible with Fairplay then wouldn't that mean any customers of Real's music service would need to buy an iPod to play their music on the go since .m4p files are only playable on iPods? Isn't that why iTMS exists, to sell iPods? What's wrong with another online store that would, essentially, help sell iPods?
I can't say I blame them. Real Networks made such a crap product for so long they'll drag down consumer perception of any brand they're associated with.
A rotten apple in the barrel spoils the bunch they say.
/.) over their "free" player that's hard to find on their site. The "Hidden" options in the installer that you have to scroll down too see, and gouging stream providers on using their tools.
Real has been under a lot of scrutiny (especially here on
I think Jobs just didn't want to soil apples image.
What, exactly, does Microsoft have to offer in this area?
WMA? Sure, it's the "standard" for all the other services--whose combined sales pale in comparison to Apple's. It's also the "standard" for the other players, whose--again, combine--sales pale in comparison to the iPod.
What about Microsoft's own music download service? As yet, it's vaporware. When and if it does come out, you can bet it won't hold a candle to the ease of use and quality of service of the iTMS. It will also use WMA--see above. By the time MS is ready to launch it, though, it's likely that most non-iTMS music download services will be failing, and the remaining ones will be consolidating.
Sorry, but in this case Apple has out-Microsofted Microsoft.
I found the meaning of life the other day, but I had write-only access.
Apple Rejects RealNetwork's Pleas
... [BUFFERING]."
Actually, the headline here overstates it. Technically, Apple has not yet rejected Real's pleas.
Apple sent the following message to Rob Glaser:
"In response to your request of the 15th, Apple's categorical response is [BUFFERING]
Opinions on the Twiddler2 hand-held keyboard?
In short, teaming up with Real can only hurt Apple, or at least the perception of Apple.
I'm sure this page will fill up soon enough with near-flames about the arrogance of Apple and how it lost them the computer market last time and so on. What most of the people making those comments don't realize is that the Mac never had the market share that the iPod does. Apple really does dominate this market, and can afford to act like Microsoft for several years, at least. (That Microsoft is intent on entering the market soon does not necessarily mean they will be successful at taking it over, as the XBox has shown.)
Licensing to Real would have two negative effects that Apple should rightly be concerned about. First, this would at best steal sales that would otherwise have gone to the iTMS, and, while the bulk of the profits come from the iPod itself, the iTMS can only be helped by increased traffic. (In particular, economies of scale are probably rather important--certainly with respect to the infrastructure, possibly the underlying music licensing as well.) Secondly, Real has a long reputation as obnoxious crap that works poorly and pushes ads at the user all the time. Associating with them could taint Apple's image, which is a valuable commodity. If Real's store was anything other than flawless, it could damage the perception of how easy to use the iPod is, hurting long-term sales and brand image.
Isn't this some story where Gates came to Next computers with a plan to develop for the platform, and then they made him wait in the waiting room for ages or something stupid like that.... and then Gates vowed to never develop for the
Next platform? I'm paraphrasing here, but maybe someone can fill in the details.
Really, Steve Jobs can decide what he wants. But it's bad PR to be that cocky. He might as well shout out, "I'm king of the hill, try to knock me off!" Here's a hint in PR, Steve: act contrite and humble even as you crush your opponents. They won't realize what you're doing until it's too late. But if you are unapologetically domineering, you'll find you get three responses:
Hmmm. I wonder which one is Microsoft? And which one is Real?
My Greasemonkey scripts for Digg &
Its not even bowing down, its a partnership. Real is synonymous with poorly written software, nagware 'message centers' most people cant turn off, messing up file associations, hiding the free product on the website, etc. These guys are one step removed from penis pump spammers.
Apple's approach is user-centric and user friendly. Real hates the user and does *everything* it can to fool you buy their product when you just need the free one. They'll do anything to take over your system. They'll push 'message center' ads for a penny an ad.
In short: fuck Real. The sooner they go bankrupt the better off everyone is. There is room for a good company with a nice media player out there and Real has shown itself over the years that they are not this company.
More FUD, more FUD, more FUD.
This has been bandied about so much that it's taken the place of real, critical thought.
Think about this: when Apple attempted to license its OS, it sales were immediately cannibalized by its licensees.
When Palm did the same thing, the same thing happened.
Name one company besides Microsoft that's succeeded financially in licensing its stuff to others. I can think of one, but they were already in a dominant market position and were/are licensing to stave off anti-trust issues.
Go ahead, find examples and post them.
That's exactly what I was wondering. What is the benefit for Apple? Music players are a dime a dozen. Why partner with the most hated name in player software when they could come up with their own very easily? Unless Real comes up with a new business model that actually adds some value to the process, and offers something that their competitors dont have, they are finished.
It is not arrogance. In what way is Real number 2 even? Things could have been different for Real, there was a time when they were at the forefront of streaming technology. They lost this spot in my eyes when the began to lose focus an instead of concentrating on technology and finding sustainable revenue streams, went for the cheap shots of getting people to pay for what others offered for free, making it very difficult to find the free version of their product, and above all loading people's desktop with tons of garbage. I have lived life without the Real player and when a site does not give me a choice, I show them my contempt by leaving the site.
Can you name one CEO that's not an arrogant SOB? To get to the top, you've got to make yourself the number one priority. I'm no Jobs fan, but I find his intolerance much more annoying than his arrogance. Jobs has zero tolerance for anyone with an IQ under 120. I'm sure he would have his own, "final solution", if he had the power.
I think the idea was if some of the cool kids on the block such as Apple agree to talk to Real, then the bullies will stop throwing garbage at Real during recess.
It's turtles all the way down.
yeah... apple is a living highly profitable company with many popular products and a lot of industry mind-share.
had they licensed, they would have died before 1992.
I am the Alpha and the Omega-3
So....Apple is hammered on for years barely hanging on. Jobs comes back, stabilizes the company, gets it moving again, delivers a great *nix OS and a sh&tload of great apps (iPhoto, iDVD, iTunes, Final Cut, iMovie) plus the most lusted after digital audio player coupled with an online music store that hits the sweet spot, is getting great buzz and people love it.
Finally....Apple has a competitive advantage in *something* and you get after him for being arrogant!?!
Oh pleez...
This is just a pissing contest. It started with Glaser insulting Jobs and calling him "afraid". Jobs just returned the favor by reminding Glaser of his place.
Lots of people are comparing this to licensing the OS or not. Of course that's a flawed analogy because
1) the OS is a whole platform that needs developers, etc... All the iPod needs is songs
2) it ignores the real reasons for the failure of MacOS which had nothing to do with licensing
The bottom line is that Real has nothing to offer at the table. So Glaser tries to goad Jobs into cutting a deal by offering insults and threats. Jobs is not the type to fall for that.
This is an excellent comment! It was just as good when *I* posted it YESTERDAY on the original thread here.
Couldn't you have at least tried putting a different sig on it?
Mac OS is "second place in market share." Windows OS is number two. There's a difference.
WSJ
"Consider the economics of the iTunes store. Apple charges 99 cents per song that is downloaded by a consumer. Of that 99 cents, Apple pays the record label about 65 cents for licensing rights to the song, estimates Charlie Wolf, an analyst at brokerage firm Needham & Co. Other analysts come up with similar figures. In addition, Apple incurs costs such as credit-card fees, which typically amount to 25 cents a transaction (which can include several songs), plus 2% to 3% of the amount charged. The result: On average, Apple earns less than a dime for each song it sells from the store."
CNET
"Apple said it doesn't have any illusions that it can make great profits from selling songs over the Internet: Instead, Apple is counting on the store as a key part of an overall music business for the company that can produce substantial profits--mainly through sales of its iPod digital music player. 'The iPod makes money. The iTunes Music Store doesn't,' Apple Senior VP Phil Schiller told CNET News.com...Schiller said the music store is close to profitability but is still losing money. Apple doesn't see the business as having much long-term profit potential either."
"it won't hold a candle to the ease of use and quality of service of the iTMS"
Don't see how you can say that. The service doesn't even exist yet.
iTunes for windows is a me-too application that's not better than Media Player. The current iPods are surpassed easily by the Rio Karma. Why would I want to use a music store through an inferior application that only supports and inferior mp3 jukebox? Not that I have any interest in online music stores but there's no way I'm interested in the Apple one. It's pure vendor lockin.
The market is young and there's a lot of the game left to play. People are so ready to conceed victory to Apple on this but history shows that not to be wise.
segment because a decent competitor hasn't come along, YET. Apple doesn't have the muscle of MS and when something cheaper, well inetgraed with WMP9 and meets more closely the DRM wishes of the major labels it will be all over. I don't necessarily think working with Real is the answer, but people love to watch Steve Jobs eat his words and statements like this deserve to be served up on large platters.
I think part of Apple's reluctance to team up with Real is because Apple want to make QuickTime ubiquitous. The latest stats I can find about media players place QT at the number 3 slot (WMP is #1 and Real is #2). Keeping in mind that Apple is trying to fortify itself as THE media creation company. For Apple to have more clout in the creative industry, especially in motion pictures and music, it needs to make sure its formats (even though they are all pretty much based on open standards) are the standards. And the only way to really do that is to have QT become much more popular than it is today.
Think about it. How does iTunes work? By using QuickTime. QT has had very bad rep in the PC world (flaky player, etc.), and many Windows users don't install it before. But now, with the iPod and iTunes Music Store, people are starting to install QuickTime again. iTMS won't work without it! Now if Real comes in and offers the same service but bypassing QT, people would no longer be installing QuickTime.
-B
As an astute observer of human behavoir, I have noticed that people to not respond well to threats, especially those like Steve Jobs. To write a threatening email personally to him is like saying, "Steve, I think you are like crap. No, you reek of it. Now, as a good little piece of crap, I'd like you to do XXX or I'll flush you down the toilet." I learned I never got anything by threatening someone (as Real did Apple with the Microsoft ploy) in a better position than me.
Real Networks acts like a child, and Apple happily refuses to grant them a piece of the pie. Maybe had Real asked Apple more nicely, as HP did, they might have had more inroads, although the deal still would probably fall through.
This sounds to me as meaningless as the argument that if Macs of Linux boxes were more popular they would surely have more viruses.
The simple answer is: Apple is not a monopoly, period. If they were dominant, no-one knows what they would be doing. And so far I haven't seen any behaviour that would make me think they wouldn't play by the rules if they were dominant.
And seriously, what would Apple ever want from Real Networks? The guys at Real Networks are loosing a lot of customers for making their free player too hard to find, and by putting way too many ads around. Why would Apple want to have anything to do with them now?
Maybe the words were a bit harsh, but they did make sense.
Diego Rey
diegoT
Name any publisher of sheet music. They license music to radio stations, to record labels, and to movie studios.
Interesting to note, they don't have full control of their copyrights. Once sheet music and lyrics are published, anybody has a right to perform them in public on a recording for a price that is set by law. This is what's known as the "mechanical royalties" because there's no barganing in the mater, the songwriter (or holder of the songwriter's copyright) gets paid the price the law says they're owed and that's that.
Britney Spears's recording company, therefore, has the exclusive rights to her performance of Baby One More Time... but absolutely any artist can do a cover of the song at the mechanical rates, and there's nothing Britney's label can do about it.
Streaming radio's problem right now is that their mechanical payment process has too high a rate set, and far too detailed of a reporting requirement because they have to pay per actual person listening to the stream while the song is playing, while radio stations by comparision just have to pay by their average daily listeners according to the ratings. They're basically on a fixed playing field tilted against them, while songwriters seem to have a level one with the rest of the world.
If only there was a way to measure and collect mechanical royalties fairly for the unencumbered transfer of MP3s/ACCs/OGGs...
normally i would agree with you here. steve jobs is an arogant asshole, and i don't agree with his reasoning i do agree with him not teaming up with real. real was basicly offering apple nothing in return for apple saving their business. and real's past history shows them to be the kind of company no one will miss in the market place.
If you mod me down, I will become more powerful than you can imagine....
According to their quarterly report, which was released earlier this week, the iTunes music store did make a small profit. I don't think details were released as to how much of a profit, but they did say it was.
Presumably, the more they can grow the user base of the store, the more money they can make on it. Allowing Real to set up shop in their turf with their tools would only likely decrease the user base of their store.
Real just wants a free ride, but Apple wisely won't give it to them.
-- Fighting mediocrity one bad post at a time.
Actually, it happens all the time. After all, you think Gateway and Dell really make their own TVs? :-)
On a more serious note, HP licenses their handheld designs to a number of folks, Philips never would have gotten very far without licensing CD player designs, Fraunhofer and Unisys did quite well licensing their respective compression technologies, Samsung licensed the design of their laptops to Best Buy (to create the "VPR Matrix" line of machines), and one of the real reasons VHS beat out Beta was that Sony (like Apple) refused to license Beta widely (I think they did, but only in a very limited fashion).
It happens even more in the vertical markets.
Jobs was kicked out of Apple right after the Mac shipped. Even when he was there, he was *not* the CEO and was *not* in charge of those type of decisions. In the 80s, Jobs was never the president or CEO of Apple once they got funding. He was the chairman of the board and the largest stockholder and he had enough power to be able to contribute to some projects (Apple III, Lisa, and the Mac), he was actually *kicked off* the Lisa project before taking over the Mac project. You're blaming jobs for a decision he didn't make and had no control over.
Personally, I think that if he had been given absolute control over Apple in the 80s, things would probably have turned out better for Apple. I have no evidence to back that up obviously.
Avoid Missing Ball for High Score
"Apple puilled a Sony!"
Right--except that Apple already supports an open standard (AAC), as well as mp3, for their players. Since no one is insane enough to make a system that doesn't work with mp3s, there's little risk that Apple is going to end up "Betamaxed". Different dynamic.
How many of you have bought SCO linux licenses?
In other words, Apple's iPod/iTunes success has created a Quicktime distribution juggernaut.
And that is exactly what Apple meant way back when about a Trojan Horse. Not only is QuickTime installed, but QuickTime contains the entire QuickTime Media Layer (QTML), basically a subset of the original Mac Toolbox APIs. I've ported a number of native Mac apps to Windows with minimal changes by riding on QTML's coattails. This is definitely a major win for Apple. They don't need Real by a long shot.
Oh really? When I'm in Windows and have to use their movie players, I honestly see no difference between Quicktime and Real. Both are ugly, heavy, loaded with advertisement, and nagging me to "buy" something. I don't know which is worse. Both are a nightmare. I want my MPlayer.
And no, I never used the iTunes stuff, and I'm not going to. It's outright funny that they want me to give them money for music which I cannot play on any player I like. It's an obvious scam - binding the music and the player together and profit from player sales. I hate lock-ins and "smart business decisions" like this. And now with that "we're #1" attitude... Fuck Apple is all I can say.
This is assuming that consumers will buy Micosoft DRM. Microsoft could theoretically blanket the globe with stores and players, but if their product isn't as desirable, it's all wasted effort. Apple already has the most lenient DRM and it's clear that Microsoft's will not be as free. Nobody will want to buy more expensive tracks that are locked down by the RIAA and don't play on the best player.
The iPod and iTunes also already play non-DRM files very well and it will be a long time before another company meets that standard. I think the pressure for Apple to license FairPlay or open up the iPod is far overestimated. They have the best product, will protect it, and it's what customers want now and for the foreseeable future. It's rare you get such a potent mix and such a great product this early.