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Virgin Accuses Apple of Abusing Monopoly
worm eater writes "The Register reports that VirginMega (Virgin Group's online music venture in France) is asking the French antitrust authorities to force Apple to license the FairPlay DRM. If France agrees with Virgin, will this be a blessing in disguise for Apple, making their DRM format the defacto standard, or will it be the downfall of the mighty iTunes Music Store?"
In this case, Apple is C). And, it's very very hard to say they have a 'monopoly' position, especially coming from a RECORD LABEL.
If said RECORD LABEL wants the monopoly to end, they should maybe consider the (literally) hundreds of companies willing to get into the online music distribution business. After all, a RECORD LABEL would have the power to license songs to any other business they choose.
This is absurd. If Apple has a monopoly, it's because the RECORD LABELS gave it to them. This is called playing both sides against the middle.
Well, it depends on where the market lies...
Is it in players?
Is it in content?
Is it in distribution?
See, with players they're already licensing the iPod to HP and Motorola.
In content they already have indies as well as major bands.
In distribution they have iTMS for Windows, Mac, and soon Motorola.
If they license Fairplay, that means other people's content is allowed on the network; it also means other people can create their own networks, and it means other people can create their own players!
However if Apple licenses FP in such a way to generate network effects... I would expect Apple to license FP for other players, and maintain control over content and distribution!
GPL Deconstructed
Seems like everyone keeps ranting on how "Real Networks hacking DRM" is good for apple, or how apple should open source their DRM, or how they should licence the technology to competitors.
To me it looks like they're making money, and maybe people should stop ranting about what Apple should do and look at what's working.
isn't Apple's DRM the sensible one apart from being WinXP/2000 (and Macs) only?
Virgin claims that Apple is abusing a "dominant" position by not licensing its own DRM.
But "dominant" is not really applcable yet. Are they dominant in music sales overall? No way. Are they dominant in being able to play music you buy online? Not even that is true, since the percentage of PC's is so much larger than Macs.
Perhaps at some distant point, when online music sales erally exceed physical CD sales (if ever?) then Apple might be called "dominant". In this case it's like a black hole calling the kettle black.
There is even an out if they REALLY want to sell music that can play on an iPod - MP3. Just because that format lacks technological features they would like, does that really give them cause to proclaim Apple is a monopoly that should be forced to share?
It will be interesting to see what the courts make of it.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
because PlayFair already cracked it and will allow us to unlock what we've purchased. The main site's taken down, but you can just google "playfair-0.5.0" or the like.
.m4a as well as .m4p files (as long as you have iTunes installed)
Or just burn to CD and re-encode, but who wants to waste cd's and time doing that?
There are also already plugins for Winamp that will play both
If they sold normal MP3 or AAC files, they would play perfectly on the iPod, and the customers were more pleased. So their claim that they could not sell songs "for the iPod" is absolutely ridiculous!
apple might be having some trepidation about cloning.
jobs is probably very aware that mac clones nearly killed apple. that's why he killed them when he was brought back on board.
however, with the iPod having lots more share of its market than the macintosh, i think apple has less to worry about if they can get a decent sum from fairplay.
if they can't make a lot of money by licensing fairplay, they do have a lot to lose. itms won't be selling to ipods exclusively anymore, and itms doesn't have the same high margin as the ipod.
methinks Virgin needs to go look up the definition of a monopoly: "Exclusive control by one group of the means of producing or selling a commodity or service."
There are a dozen online music stores. There are several dozens of portable music players. There are a half-dozen DRM solutions. Apple does not have anything even closely resembling a monopoly in any of these areas.
MORTAR COMBAT!
Supporting WMA isn't in Apple's best interest. Controlling the format means controlling royalties. If Apple licenses FairPlay they make money from those who use it. If Apple supports WMA then they make money only on iPods and not their intellectual capital that is FairPlay. You suggest supporting WMA will sell more iPods which I counter because WMA doesn't really help sell any music devices today. The standard is MP3 which the iPod already supports.
Of course we torture people, we need the information --Gen. Pinochet
"Just use the User-Agent Switcher, works for me."
Terrible advice IMHO. The more that other browsers identify as IE, the less likely these lazy designers will ever catch a clue. Do the world a favor and send them an e-mail explaining why you won't be back instead. It might not get through to them, but acquiescing definitely won't.
Just my 40% of a nickel...
"A revolution without dancing is... a revolution not worth having"
submits to licensing FairPlay decoder for $400 per device and the encoder for $2,000,000 per song.
Seriously, though, what's preventing Virgin from selling songs that play on an iPod? The copyright holders. Is that Apple's fault?
There are no trails. There are no trees out here.
so, they're saying some monopolies are good because it lets their webmonkeys design for only one platform?
HIV Crosses Species Barrier... into Muppets
And isn't that the point in licensing it for other players? Get revenue in licensing and network effects, while minimising manufacturing costs?
GPL Deconstructed
We all know Apple has been screwed by the labels ever since this started. That's why the iTMS wasn't able to launch until after a bunch of other stores in different companies because the labels didn't want Apple to have the dominant position they deserve for being the first with the good idea and good marketing. This is probably also the reason why we STILL don't have the iTMS in Canada! Oh and for the record, if you're going to abbreviate it, the i is ALWAYS lower case, and everyone does it iTMS not IMS not anything else, and don't act like iTunes is only for selling music, I've been using iTunes since version 1, and the music store came in at version 4.
1. Branson is no longer CEO of Virgin Records, he sold it.
2. The question is not if Apple is a monopoly in any other market it participates in, but if it is a monopoly in the relevant market of selling music online and providing a player to play the music and if it is abusing its market share.
3. Just because you like Apple, something I can really understand, does not mean that they are acting the way they should in a market where they have an unusal big market share.
4. When it comes to anything else having to do with computers you as a Apple user (assuming you are one) would probably care a lot about open standards, why make an exeption when it comes to online music stores?
Apple has just as much as a monopoly on FairPlay as Nike has on Air Jordans. That is, they have a monopoly on a product, not a monopoly on the music player/music store market. By revenue, Apple has a 55 percent market share for mp3 players. By units, only 31 percent. I don't know how much of a market share iTunes has, but FairPlay songs are only able to be played on 31 percent of mp3 players. Good luck crying monopoly in court on a company whose market share isn't even close to a majority.
They do have competitors, and those competitors are obliged to compete. If they can't, tough.
He is nota hypocrite. He is a businessman.
Its good for apples business to keep fairplay locked away.
Virgin is just plain wrong. Forcing Apple to open FairPlay would be a miscarige of justice, there is no good reason to do it other than to stick it to Apple because other companies are mad they aren't as successfull.
Comment forecast: Bits of genius surrounded by a sea of mediocrity.
And if MS has a monopoly it's because PC MAKERS gave it to them. Look at what Gates did in the 80s with Windows and what Apple is doing with IMS now. Hmmm...food for thought...
http://jayceecorder.blogspot.com
- lower prices
- better
customer service
- more choice
As much as I love Apple, their vertical monopoly has been bad for consumers. Apple's prices are much higher than if they had direct competition. If Apple is more liberal with their DRM, more small labels will be able to enter the market. This is is very important as some of the most creative music is only available on small independent labels.This is Apple we're talking about, not another company. Apple doesn't license thing, they make an industry leading product only to have the rest of the world scramble to come out with something 'close enough' that everyone accepts and then go to a miniscule but violently loyal fan base.
As a rock-in-roll Physicist once said, No matter where you go, there you are.
Now what benifit would Apple see by helping Microsoft gain total dominance in the music format wars?
We're in the very fortunate position right now where the dominant music format has no digital rights management built into it (MP3), and where Apple's own format has fairly low restriction DRM built into it, and where there are other formats (ATRAC3, WMA) in competition.
But give Microsoft too much sway by making their format the ubequitous one and they'll be the ones in control. And we've already seen what sort of control they like to leverage given the opportunity -- just look at what happened once Windows became a defacto standard.
Sorry, but supporting WMA would be a terrible idea for Apple and for consumers. I applaud them from staying away from it.
Now if only my iPod would play Ogg Vorbis...
Yaz.
The site apparently isn't Windows only -- on a Mac running FireFox and Safari, I get:
Pour surfer sur ce site depuis un Mac vous devez utiliser Internet Explorer 5.2 et supérieur, comme navigateur.
IE has to be one of the absolute worst browsers available for Mac OS X. It's slow, looks terrible, and was the very first thing I deleted from my PowerBook.
The truly galling part is they recommend I use IE 5.2 or better. And I am -- FireFox is better.
So let me get this straight. They don't support Apple Mac OS X users using the default OS X browser (Safari), but they want access to Apple's DRM technology Apple originally created to service the same people who use OS X and Safari. Uh-huh.
Methinks VirginMega needs to fix their own support for Apple before they worry about Apple supporting them.
Yaz.
Or does Apple stand to make a pretty penny by licensing FairPlay to the world?
Think back about two decades. Apple had come cool tech and wanted to keep it all for themselves. Microsoft had recently acquired some tech that wasn't nearly as cool or groundbreaking as Apple's BUT they let the other children play with it.
Look at where those two companies are today. Both are going strong, but the one who shared with the other children is in a much stronger position.
LK
"Hi. This is my friend, Jack Shit, and you don't know him." - Lord Kano
No, they never will. At least they won't if they value their company, their products, their income, and the people who support all that. The Apple clone market was a resounding fuckup. That idiot CEO should be flogged for what he did. He caused an absolute nightmare for support. People didn't call Epson or Umax for tech support. Oh no. They saw the Apple logo and called Apple for support. The Umax and Epson clones were the worst of the lot. At an Apple Service Center I worked at we had racks of dead Epson and Umax clones. They couldn't be fixed. The companies refused to honor the warranties. They were POSs. DayStar and Power Computing did a pretty damned good job of making clones (especially the SMP DayStar boxes) but that still didn't fix the support issue. The Radius machines were also junk. The clone "experiment" was far and away a horrible fuckup that we all should hope never happens again.
And it wasn't Jean that licensed the OS and CHRP platform to the cloners. It was Spindler.
Not because of product lock-in.. because as downloading music becomes more and more popular, and more people have the devices, and more places begin to sell it, you'll see the market will move to make a profit instead of decrease like typical goods. So buy your music now, before its US$2.50 a song.
ok.. so heads you lose tails I win. right?
I bought about seven songs, then decided that the hassle factor (burning songs to CD, then converting to MP3 or OGG for my portable device) was too high. If they become the standard, then I'll give up completely on downloadable music, and stick to buying CDs from non-RIAA labels.
Gotta go - my high horse has the munchies.
- Jack
"will this be a blessing in disguise for Apple, making their DRM format the defacto standard, or will it be the downfall of the mighty iTunes Music Store?"
What it WILL be, is a perfect reason for Virgin to buy up Real -- who recently reverse-engineered FairPlay -- as a new outlet for Virgin's catalogue, bypassing Apple.
Why will players be profitless?
Right now there is plenty of competition in the player market. Many players have the same storage capacities as the Ipod, and are cheaper than the ipod.
The storage of the ipod has nothing to do with the profits!
The design of the ipod (and itunes) has everything to do with the profits.
If the FairPlay DRM is opened up for music stores, wouldn't also be possible for hardware manufacturers to then adopt it for their hardware? That would allow 3rd party devices to use iTunes Music Store and be one less advantage that the iPod would have.
Buy Steampunk Clothing Online!
In this particular instance of "vertical monopoly", there are DOZENS of other music players and online music stores. How does this particular monopoly infringe consumer choice?
I'm an iPod owner, and that hasn't infringed my choice to tell all the online music vendors to go screw.
Virgin's making a money-grab. Apple is not a monopoly in any meaningful sense of the term (except for the fact that they seem to be the only firm employing good industrial designers).
Why yes, I AM a rocket scientist!
Yes you are missing something, it's called DRM!
the whole point of NOT using mp3s is to restrict people to when/where/how they can use their purchase.
It would be good for me. FairPlay-AAC and WMA are the two DRM formats available. Microsoft seems to be licnesing out since I can buy home or car audo/vedio elecrtonics to play WMA files. But I can't buy any of that stuff to play FairPlay-AAC files. And I wish I could. Also that Vergin-whatever company has no angle on providing me with a FairPlay-AAC home/car audio device. They are just in it for settlement money. As for Apple, it would be good for them to choose their partnerships, not get forced to lincens to anyone who fills out the court order form. They should get their buddies, Phillips, to start making FairPlay-AAC compatible DVD and CD players.
" Yes you are missing something, it's called DRM! the whole point of NOT using mp3s is to restrict people to when/where/how they can use their purchase."
Well I realize that, but I don't understand how Apple refusing to share their particular DRM scheme hurts Virgin in any way since you can play *any* mp3 on an iPod, no matter where you get it. So I don't understand how specifically Apple is hurting Virgin's business. I mean, Virgin can still start up an online music store to sell me music and I'll be able to play it on my iPod. It's not like the iPod is DRM locked so that I can't play other people's music on it.
I don't think you realize what's going on here....
Virgin (nor any other big lable) will not sell non-drm music.
If their DRM music can't be played on the iPod they lose out on millions of potential customers.
A French company want to take away an American company's inalienable right to private property, what a surprise. FairPlay is Apple's private intellectual property, which they can use as they see fit. If it is Apple's best interests to license their IP then it is up to Apple to make that decision. It is not up to government to nationalize anyone's property, intellectual or tangible.
It was determined a long time ago that requiring someone to purchase a second item with a first item was a monopolistic tactic. IBM lost that one when they were requiring a service contract with their computers.
Interface patents do the same thing. It allows a company on one side of that interface to monopolize the sale of the software or hardware on the other side of the interface.
This comes up a lot, expecially when people attempt to use the DMCA to protect their right to do these things.
Interfaces are essentially a language. It has already been tested in court that you can't patent a language, simply because you need to release it into the public domain for it to be useful. Interfaces are a little different - you don't have to release them into the public domain for them to be useful, but you do have to do so if you aren't attempting to hold a monopoly on both ends of its use.
Wake up - the future is arriving faster than you think.
I don't disagree with this statement. But I've started to feel that Apple IS missing an opportunity here. I see the question as two-fold: "Will licensing Fairplay lessen Apple's current dominance in the Music market? and Will licensing Fairplay seal AAC and Fairplay as the format and DRM standards for the current music wars?
I don't believe that licensing Fairplay would lessen Apple's current dominance that much. The Mac OS license issue was a different ballgame. It seemed everyone but the high paid business people all agreed that it would sucker punch Apple sales. More importantly, it sucker punched hardware sales which are Apple's bread and butter. Unless you own the market or are a smalltime vendor there just is much money to be made in OS sales.
But for iTMS the hardware is the iPod, and licensing Fairplay will ensure the iPods dominance as a MP3 player for years. I see this as a good thing. People will still use iTunes and iTMS because of the ease of use and tight integration with the iPod. Those who won't probably aren't using iTMS currently, but also DON'T have an iPod. If they purchased an iPod, the likelihood is that they would eventually start purchasing from iTMS. It means Apple has to keep on its toes about the music store features, functions, and all around user experience, but the iPod would dominate for at least another 2-5yrs.
While this first issue is VERY IMPORTANT. I think the second question is JUST AS, if not MORE SO important for Apple, especially at this juncture.
Will licensing Fairplay seal AAC and Fairplay as the format and DRM standards for the current music wars?
Licensing Fairplay before Microsoft hits the music scene would be good for Apple, because currently a lot of people are looking for Microsoft and businesses using Microsoft technologies to save them from Apple. Who knows what the likelihood of success of a Microsoft music store would be? I don't. But I can say, that even if it failed completely (less likely), it still gives Microsoft the ability to promote Windows Media DRM as the de-facto delivery standard, which does nothing but contribute to the future decline of iPod sales.
Imagine if RealNetworks, Napster, and OD2 started offering iPod compatible offerings. That would push iPod sales. But also satisfy a number of people's needs for compatibility. Many of those people who want Apple to support WMV would just shut-up, because they don't care about wmv, they care about playing their music on their mp3 player. (It wouldn't satisfy the
I think the time is coming for Apple to license Fairplay. I don't want
"[Regarding the 'cloud,'] ownership was what made America different than Russia." -- Woz
Knowing what an outright bastard Jobs is (and I mean that in a good way), you may be right. He seems the kind to piss off an entire country at the cost of his bottom line, and I respect that.
'Standards' in computing only impress those who are impressed by things like 'standards'.
...and Virgin Megastores haven't sold Mac software since their inception. Virgin never cared about Apple! Why should Apple give the time of day to Virgin? The point of iTMS/iPod is TO PUT THE BRICK AND MORTER STORES OUT OF BUSINESS! They're obsolete...cry all they want...they didn't come up with ANY of the technology to make this happen so why do they think Apple owes them ANYTHING?!?
Did they get turned away or did they not agree to the licensing offered by Apple in the first place? Motorola has a long-standing relationship with Apple and most likely agreed to an exclusive DRM license deal that Apple agreed with and allowed them to distribute. The long term goals of the iTMS and iPod appear to be getting the Fairplay DRM distributed to the masses without interference from some other competing DRM.