Windows Media Player for Macintosh lagged behind WMP for Windows, and never in its lifespan as a shipping product reached feature parity with the current version of WMP for Windows [...] Uh... so in other words, no, you don't have any evidence that MS actually refused to license PlaysForSure to Mac developers?
...that's life. Yes - just like monopolies and other market abuses are "life". That's why we have governments, because sometimes "life" involves one party abusing another, and as humans we can take action to remedy it and prevent it from happening again.
You're right; logically, there's no implication that the logo has to be shiny. It could justify its cost some other way, for example by coming with a coupon for a free 20" HDTV.
and FWIW, the manufacturers in the market aren't whining about Apple either; they're just competing on features and price, which is exactly what they should be doing. Yes, and just look at how much market share it's gotten them. The price they have to compete on is not the price on the sticker; it's the total cost of buying a new player and then converting your library. The difference between the total cost and the sticker price is the barrier to competition, because the manufacturer has to make it up by providing extra features for free.
If Apple had whined to regulatory bodies about Microsoft's refusal to license its Windows Media DRM for Macintosh, then they'd be roughly equivalent. Did Microsoft actually do that?
Apple didn't have to magically make an iPod that met some imagined dollar value - this is the point you keep ignoring - they just had to get the featureset right. I'm not ignoring it: you're wrong. "Getting the featureset right" means providing enough value to justify the cost. If it's going to cost me $300 cash and $300 of my time to get an iPod, then the "right featureset", by definition, is the one that I believe provides $600 worth of value.
The more I'm going to have to spend--whether it's time or money--the more value the manufacturer has to cram into the product to get me to buy it. You're getting hung up on my representation of value as a dollar amount, but the underlying premise doesn't depend on that.
The next player that knocks Apple out of the dominant position will get the next featureset right, whatever that may be. Exactly. Now, what I'm saying, and what you still seem to be ignoring, is that Apple's artificial cost means that in order to have the "right featureset", a manufacturer has to provide a whole bunch of extra value for free. They have to give away enough value to offset the time spend converting their music libraries, because they can't get paid for it. That cost just disappears into thin air.
They won't have to meet your fantasy dollar amounts with regard to the "hidden" cost of converting from FairPlay, because the featureset - whatever that will be - will make it worth folks' time to convert their existing libraries for the new device. Again, other manufacturers will have to provide extra features for free in order to compete: of all the cost that a customer incurs when buying their product, only some of it goes to the manufacturer, even though all of it has to be justified by the product's feature set. The rest is simply wasted as the customer sits there clicking "burn, rip, burn, rip" for a solid week.
People said similar things in the PSone to PS2 transition. "I just want a game machine, not a DVD plaeyer, it ups the price." I guess they weren't the ones annoyed by the multidisc PSone RPG's or the tow GT2 discs. However, DVDs worked with the TVs everyone already had. At worst, you needed a $10 RF modulator. Even if you thought at first you didn't want a DVD player, maybe a year down the road, you'd change your mind, and you'd be able to take advantage of it immediately for free.
Blu-Ray makes little or no difference to the 89% of American households that don't own an HDTV. DVDs hold plenty of data already, particularly if you use a modern video codec instead of MPEG-2; the extra space is basically only good for HD content, which most people won't be able to use without spending hundreds or thousands of dollars on a new TV.
The iPod didn't have to meet some imagined dollar value equivalent to the cost of my CD collection to justify its purchase. It had to have the right mix of features to make me want it enough to justify whatever time I was willing to spend converting my music collection for it. That's exactly what I'm saying! The iPod had to provide enough value to justify the expense you'd personally incur in converting your CD collection. If you had to spend $300 for the iPod and another $300 worth of your own time, then the iPod had to provide $600 worth of subjective value to you.
I'll repeat this again because you seem to have missed it: the extra $300 is not the value of your music collection, it's the value of the time you have to spend converting it.
Now, if the iPod could have magically converted all your CDs the moment you bought it, then you'd only be spending $300, and it wouldn't have to provide as much value for you to be willing to buy it. (Presuming you're a rational actor.)
OTOH, if some other party came in and imposed an extra cost, then the iPod would have to provide even more value for you to be willing to buy it. That is, if you had to pay $1000 to the neighborhood bully to keep him from stealing your iPod on the way home from the store, the iPod would have to provide $1600 worth of value instead of $600. That's a barrier to Apple, because if they want to sell you an iPod, they have to cram in an extra $1000 worth of value that they won't get paid for.
What you're defending, really, is the idea that Apple should give away the product of all of the risk they took in developing the iPod and iTunes into billion dollar businesses. For all of your sturm and drang about Apple's supposedly anticompetitive tactics, you don't seem to expect the rest of the market to have to compete. No, opening the DRM allows the rest of the market to compete fairly. It takes away the "neighborhood bully" forcing them to cram in extra value for free.
No, that's not how it works. Even if you're selling consoles at a loss, you're still better off selling them than letting them gather dust on the shelves.
The cost is incurred when you manufacture the consoles, not when you sell them. If you spend $500 to make the console and sell it for $200, you lose $300. But if you spend $500 to make the console and then don't sell it, you lose the whole $500.
I don't use Bluetooth. After getting ripped off with a Bluetooth mouse and keyboard that barely work, I'm not about to make my cell phone decisions based on that mangled abortion of a wireless technology. I can use a USB cable to transfer ringtones and connect to the internet.
So what self respecting/. user uses Verizon? And if you use it and pay for it out of pocket... WHY??? I do, mainly because of data services. When the cable modem goes out, I can get online at tolerable speeds with 1xRTT, and it's totally free at night or on the weekends. Once I upgrade my phone, I'll be able to get online at usable speeds with EVDO.
EDGE and GPRS are a joke, so no Cingular or T-Mobile for me. That leaves only Sprint, but after the billing nightmare they put me through a few years ago, I'm not going back.
There are no barriers to "competition" in the current market. Of course there are. Suppose I design a music player that's about the same as the iPod, but it has one cool new feature. Since most digital music listeners already have an iPod, my target market is mostly iPod owners looking to replace their old player. If I sell mine for $100 more than a new iPod, then my new feature has to be cool enough to justify that price - the player has to be "$100 better" than the iPod.
But now suppose that my average customer will incur a cost of $500 to convert his iTunes library. Now my player doesn't just have to be $100 better, it has to be $600 better. That's a significant barrier that I have to overcome. I have to cram an extra $500 of value into my product for free if I want to compete with the iPod.
Can I demand that Microsoft be forced to interoperate with OS X in specific ways that I demand? Can I demand that Microsoft provide me with a way to run shrink-wrapped Windows apps on my Mac without incurring any additional costs (Parallels or a copy of XP or Vista?)
Reasonably, no, I just can't. Should Apple be forced by this notion of "interoperability" into allowing OS X on whitebox PC's at the cost of it's Macintosh business? Hogwash. You continue to ignore the difference between compatibility problems that are inherent in various technologies, and compatibility problems intentionally caused by a company going out of its way to prevent interoperability... and amusingly enough, it involves another case of the latter in another Apple product this time.
What do consumers actually want? The freedom to switch to a better product if one comes along.
Consider phone service again. A few years ago, if you switched cell phone companies, you lost your phone number. You were technically free to switch, but you had to pay a pretty hefty price, which meant that you weren't really all that free. Carriers could offer poor service, safe in the knowledge that their customers would put up with a lot of hassle just to keep their phone numbers.
Today, you can keep your phone number even if you switch, with the result that switching is more common and phone service is more competitive. Consumers benefit across the board.
But by your logic, local number portability was unnecessary, because everyone knew when they signed up that they'd have to pay this price if they ever left - and besides, it's just a huge inconvenience, nothing "harmful", and a mobile phone is a luxury anyway, so everyone should've just sucked it up...
The arrogance of assuming that your assessment of Apple's practices as "bad" and the rest of us as "dumb" and in need of being saved from big bad Apple is fairly silly? Yes, it is silly, which makes me wonder why you made it up. It certainly isn't something I wrote.
An implied cost in a platform switch is not a threat. It's an implied cost. It's up to me to decide if that cost is worth it. Uh huh. Just like the school bully doesn't threaten to beat you up if you don't hand over your lunch money, he just implies that hanging onto your money might come with the cost of getting beat up. He leaves it up to you to decide whether that cost is worth it. The fact that he's the one imposing the cost is completely irrelevant, right?
You seem to have a very different definition of "harm" than, well, everyone else on the face of the earth. As such, I don't think any argument will convince you that someone is harmed when you force them to choose between paying one unnecessary cost and another. In fact, I doubt you'd consider any economic action harmful.
It's a symbiosis, as I said at the beginning. Apple uses iPods to sell iTunes tracks and iTunes tracks to sell iPods. It's the razor and razorblades model. But the iPod is profitable on its own, and the iTunes store is at least breaking even. Where's the need for lock-in?
Without inflated prices on the blades, the razors themselves have to be profitable on their own, and folks balk at the higher cost of both -- and the whole business falls apart. They can't both have a higher cost. The profit margin on the blades subsidizes the free razor; take away the subsidy, and you have to pay for the razor, but the blades can be cheaper.
The main advantage of the razor-and-blades model is that it reduces the up front cost. Take subsidized cell phones, for example: you might be able to buy a phone for $500 and pay $20/mo for service, or get the phone for free and pay $50/mo. In the long run, it's cheaper to buy the phone outright, but people prefer the latter because it's easier to spend $40 initially than $520.
This doesn't apply to iPod and iTunes, because the iPod itself is sold at full price, and the store doesn't operate at a loss. FairPlay lock-in doesn't translate into more attractive pricing, it only provides a barrier to switching in the future.
I willingly accept being "locked in" to my Shick Sensor, because the blades are cheap enough that even at their inflated cost they're a value for my money and the features outweigh the "switching cost." There's no DRM preventing you from sticking a third-party blade in your Schick razor.
My use of iTunes DRM is entirely voluntary. It's not the sole method of getting content FOR my iPod, and the DRM is simple to circumvent, by design. I don't see how you can call it "simple". It may only involve pressing a couple buttons, but you have to press them over and over for hours, days, or weeks if you have a decent sized library. Calling a week-long burning process "simple" is stretching the word to the point of meaninglessness.
It honestly doesn't matter that the platform switching costs are a consequence of Apple's DRM and not some other underlying technology, because iTunes DRM is part of the bargian when you purchase iTunes music. Explaining the costs up front is no excuse. There's a long history of making parts of an agreement unenforceable because they're just too one-sided.
They have a right to engage in practices you deem "anticompetitive" up to the point that those practices are ruled a violation of relevant law. Legally, yes, but the philosophy that anticompetitive actions are unfair is the very reason why those laws exist in the first place. What you're saying here is not an effective argument for restricting the law's scope, or even for keeping it where it is; it's only the observation that actions are legal if they don't violate the law.
The regulatory angle here does far more harm than good, if we really look at it carefully. At what point, under such proposed laws, am I permitted to sue somebody for not properly anticipating my future needs? At the point where they start imposing artificial barriers to competition or interoperability.
As you know, I don't buy your cost analysis as a substantive example of actual harm. You're going to have to either agree to disagree or try again. Inconvenient isn't the same thing as harmful. You keep calling it "inconvenience", but it's an expense like any other. Imagine if your landlord tried to charge you for moving out, giving you the option of staying there and renting an inferior apartment forever, or paying a hefty fee to go somewhere else. That sort of abuse is generally prohibited by tenant rights laws, because society has decided that "you agreed to it when you moved in" isn't a good excuse for extortion.
The implied switching cost is only added should I find that iPods no longer meet my needs. Likewise, it's only necessary for Apple to add this cost if they're afraid that iPods won't meet your needs. If they're confident that the iPod can stand on its own, they don't need to threaten you with a $600 fee, because you won't switch anyway.
If they cave and absorb the cost of needless regulation in a few European cases, I have to expect that cases will pop up in jurisdictions around the world, and that truly will mean the end of the iPod. If regulating lock-in leads to the death of the iPod, then I will have overestimated Apple. I believe the iPod and iTMS can compete on their own merits, without one needing to be tied to the other. The only way this regulation could kill the iPod is if that's not true: if some other player really is a lot better than the iPod, and the only thing keeping everyone from switching away is the cost of converting their libraries.
As you said, "most consumers find the iPod and iTunes to be good, fulfilling choices that meet their needs" - if that's true, then won't those consumers keep using Apple's products even when they aren't being forced to stay (at the point of a $600 library conversion gun)?
I mean, you can't have it both ways. Either Apple's products can compete on their own, or the FairPlay lock-in is necessary for Apple to make money.
Yes, there are platform switching costs associated with moving away from FairPlay DRM. But those costs - however inconvenient - do not (yet) fit the bill for a platform "lock-in." They may, if Apple removes the presently simple method that exists for re-encoding iTunes DRM tracks. As you know, that "simple method" is actually quite expensive for anyone with a large library. By forcing users to spend days or weeks burning and re-ripping discs, Apple effectively adds hundreds of dollars to the cost of a competing player - an anticompetitive move under any honest analysis.
You may be befuddled by that choice [to buy an iPod], but it's not up to you to force people to make choices that you agree with. Now you're drifting off into persecution fantasy land again. As you know, I own an iPod myself. I'm not befuddled by anyone's choice to buy one.
The problem with your assertion here is that Apple is doing something nefarious and forcing costs of a platform change on users. Platform switching costs are a fact of life, not a regulatable offense. Sometimes, but not in this case. You see, in your examples...
Can I get Apple to pay me for the costs of changing platforms if I decide to switch from OS X to Windows Vista? Can I call for Adobe to pay for the costs of switching platforms if I decide to stop using Creative Suite? ...the costs are unavoidable consequences of the technology. Apple hasn't gone out of their way to make it more expensive for you to switch to Vista, and Adobe hasn't imposed any artificial costs to keep you from switching away from CS.
You know this. I know you know it.
The costs of switching away from iTunes, however, are 100% artificial. Apple has gone out of their way to keep your iTunes music from working on other players, by encrypting it with a system that no one else is allowed to decrypt. They've also gone out of their way to keep iPods from playing music from other stores, by changing the details of their encryption to stay ahead of other stores that tried to use FairPlay.
Again: you know this, and I know you know it. You're just wasting your time and mine pretending the situations are the same.
Yes, there are costs associated with changing platforms, but that's a fact of life, not a consipracy on the part of Apple to force people to use iPods. This is different and you know it. In this case, the costs have nothing to do with inherent differences between platforms, and everything to do with Apple's anticompetitive behavior.
Your original shrill ranting seemed to claim that Apple's iTunes business had been summarily deemed illegal with no possible recourse for Apple. Wow, another wacky misinterpretation of my posts. Are you trying to set a record?
Apple's main recourse is to stop violating the law. I suppose they could also try convincing a judge that the CO has misinterpreted the law, and that their actions aren't actually in violation, but that doesn't seem likely - interpreting the law is the CO's job.
The office of the Consumer Ombudsman isn't empowered to declare anything illegal with no recourse to the challenged party. Once again, you fail to understand what makes an action illegal. It's the law, not a judge's gavel.
Regurgitating blog posts You misspelled "news articles", and I understand why you have such little respect for them: they contradict your ridiculous stance.
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...that's life. Yes - just like monopolies and other market abuses are "life". That's why we have governments, because sometimes "life" involves one party abusing another, and as humans we can take action to remedy it and prevent it from happening again.You're right; logically, there's no implication that the logo has to be shiny. It could justify its cost some other way, for example by coming with a coupon for a free 20" HDTV.
The same place I can buy a 15" Mac notebook with a Core 2 Duo for under $1500.
Well, since you're spending an extra $500 for that logo, it'd better be shiny!
The more I'm going to have to spend--whether it's time or money--the more value the manufacturer has to cram into the product to get me to buy it. You're getting hung up on my representation of value as a dollar amount, but the underlying premise doesn't depend on that. The next player that knocks Apple out of the dominant position will get the next featureset right, whatever that may be. Exactly. Now, what I'm saying, and what you still seem to be ignoring, is that Apple's artificial cost means that in order to have the "right featureset", a manufacturer has to provide a whole bunch of extra value for free. They have to give away enough value to offset the time spend converting their music libraries, because they can't get paid for it. That cost just disappears into thin air. They won't have to meet your fantasy dollar amounts with regard to the "hidden" cost of converting from FairPlay, because the featureset - whatever that will be - will make it worth folks' time to convert their existing libraries for the new device. Again, other manufacturers will have to provide extra features for free in order to compete: of all the cost that a customer incurs when buying their product, only some of it goes to the manufacturer, even though all of it has to be justified by the product's feature set. The rest is simply wasted as the customer sits there clicking "burn, rip, burn, rip" for a solid week.
Blu-Ray makes little or no difference to the 89% of American households that don't own an HDTV. DVDs hold plenty of data already, particularly if you use a modern video codec instead of MPEG-2; the extra space is basically only good for HD content, which most people won't be able to use without spending hundreds or thousands of dollars on a new TV.
I'll repeat this again because you seem to have missed it: the extra $300 is not the value of your music collection, it's the value of the time you have to spend converting it.
Now, if the iPod could have magically converted all your CDs the moment you bought it, then you'd only be spending $300, and it wouldn't have to provide as much value for you to be willing to buy it. (Presuming you're a rational actor.)
OTOH, if some other party came in and imposed an extra cost, then the iPod would have to provide even more value for you to be willing to buy it. That is, if you had to pay $1000 to the neighborhood bully to keep him from stealing your iPod on the way home from the store, the iPod would have to provide $1600 worth of value instead of $600. That's a barrier to Apple, because if they want to sell you an iPod, they have to cram in an extra $1000 worth of value that they won't get paid for. What you're defending, really, is the idea that Apple should give away the product of all of the risk they took in developing the iPod and iTunes into billion dollar businesses. For all of your sturm and drang about Apple's supposedly anticompetitive tactics, you don't seem to expect the rest of the market to have to compete. No, opening the DRM allows the rest of the market to compete fairly. It takes away the "neighborhood bully" forcing them to cram in extra value for free.
No, that's not how it works. Even if you're selling consoles at a loss, you're still better off selling them than letting them gather dust on the shelves.
The cost is incurred when you manufacture the consoles, not when you sell them. If you spend $500 to make the console and sell it for $200, you lose $300. But if you spend $500 to make the console and then don't sell it, you lose the whole $500.
I don't use Bluetooth. After getting ripped off with a Bluetooth mouse and keyboard that barely work, I'm not about to make my cell phone decisions based on that mangled abortion of a wireless technology. I can use a USB cable to transfer ringtones and connect to the internet.
EDGE and GPRS are a joke, so no Cingular or T-Mobile for me. That leaves only Sprint, but after the billing nightmare they put me through a few years ago, I'm not going back.
But now suppose that my average customer will incur a cost of $500 to convert his iTunes library. Now my player doesn't just have to be $100 better, it has to be $600 better. That's a significant barrier that I have to overcome. I have to cram an extra $500 of value into my product for free if I want to compete with the iPod. Can I demand that Microsoft be forced to interoperate with OS X in specific ways that I demand? Can I demand that Microsoft provide me with a way to run shrink-wrapped Windows apps on my Mac without incurring any additional costs (Parallels or a copy of XP or Vista?)
Reasonably, no, I just can't. Should Apple be forced by this notion of "interoperability" into allowing OS X on whitebox PC's at the cost of it's Macintosh business? Hogwash. You continue to ignore the difference between compatibility problems that are inherent in various technologies, and compatibility problems intentionally caused by a company going out of its way to prevent interoperability... and amusingly enough, it involves another case of the latter in another Apple product this time.
Consider phone service again. A few years ago, if you switched cell phone companies, you lost your phone number. You were technically free to switch, but you had to pay a pretty hefty price, which meant that you weren't really all that free. Carriers could offer poor service, safe in the knowledge that their customers would put up with a lot of hassle just to keep their phone numbers.
Today, you can keep your phone number even if you switch, with the result that switching is more common and phone service is more competitive. Consumers benefit across the board.
But by your logic, local number portability was unnecessary, because everyone knew when they signed up that they'd have to pay this price if they ever left - and besides, it's just a huge inconvenience, nothing "harmful", and a mobile phone is a luxury anyway, so everyone should've just sucked it up... The arrogance of assuming that your assessment of Apple's practices as "bad" and the rest of us as "dumb" and in need of being saved from big bad Apple is fairly silly? Yes, it is silly, which makes me wonder why you made it up. It certainly isn't something I wrote.
You seem to have a very different definition of "harm" than, well, everyone else on the face of the earth. As such, I don't think any argument will convince you that someone is harmed when you force them to choose between paying one unnecessary cost and another. In fact, I doubt you'd consider any economic action harmful.
The main advantage of the razor-and-blades model is that it reduces the up front cost. Take subsidized cell phones, for example: you might be able to buy a phone for $500 and pay $20/mo for service, or get the phone for free and pay $50/mo. In the long run, it's cheaper to buy the phone outright, but people prefer the latter because it's easier to spend $40 initially than $520.
This doesn't apply to iPod and iTunes, because the iPod itself is sold at full price, and the store doesn't operate at a loss. FairPlay lock-in doesn't translate into more attractive pricing, it only provides a barrier to switching in the future. I willingly accept being "locked in" to my Shick Sensor, because the blades are cheap enough that even at their inflated cost they're a value for my money and the features outweigh the "switching cost." There's no DRM preventing you from sticking a third-party blade in your Schick razor.
As you said, "most consumers find the iPod and iTunes to be good, fulfilling choices that meet their needs" - if that's true, then won't those consumers keep using Apple's products even when they aren't being forced to stay (at the point of a $600 library conversion gun)?
I mean, you can't have it both ways. Either Apple's products can compete on their own, or the FairPlay lock-in is necessary for Apple to make money.
You know this. I know you know it.
The costs of switching away from iTunes, however, are 100% artificial. Apple has gone out of their way to keep your iTunes music from working on other players, by encrypting it with a system that no one else is allowed to decrypt. They've also gone out of their way to keep iPods from playing music from other stores, by changing the details of their encryption to stay ahead of other stores that tried to use FairPlay.
Again: you know this, and I know you know it. You're just wasting your time and mine pretending the situations are the same. Yes, there are costs associated with changing platforms, but that's a fact of life, not a consipracy on the part of Apple to force people to use iPods. This is different and you know it. In this case, the costs have nothing to do with inherent differences between platforms, and everything to do with Apple's anticompetitive behavior.
Apple's main recourse is to stop violating the law. I suppose they could also try convincing a judge that the CO has misinterpreted the law, and that their actions aren't actually in violation, but that doesn't seem likely - interpreting the law is the CO's job.
Sure is. Unfortunately I was quoting the original MSNBC article. Oops!