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July 22, 2006

Let's Kill iPod and iTunes

Apple's iPod has almost 80 percent of the US music player market, while iTunes has 70 percent of US digital music sales. Other online music stores cannot sell music files encoded with Apple's DRM, and competing devices cannot play these files. With such a dominance, the rest of the competitors had to do something to increase their sales.

Microsoft decided to build their own music player. "Under the Zune brand, we will deliver a family of hardware and software products, the first of which will be available this year," said Chris Stephenson, general manager of market for entertainment and services at Microsoft. "We see a great opportunity to bring together technology and community to allow consumers to explore and discover music together." And, of course, a great opportunity to increase their small sales. Microsoft also has MSN Music Store and Urge, an online music store in partnership with MTV, that sell music for PlaysForSure devices like Zen Vision in WMA format and protected with Microsoft's DRM.

On the other hand, Yahoo thought it would be better to sell MP3s without DRM, not because they care too much about the consumer, but because they want to sell music to iPod users. Their first test is a Jessica Simpson MP3 that costs $1.99 and supports "customization": you can hear your name in the song. They basically do a digital watermarking to prevent file-sharing. The song will include watermarks that store information about the buyer, that's useful if the MP3 is found on a P2P network or on a site. What does Yahoo say? "As you know, we've been publicly trying to convince record labels that they should be selling MP3s for a while now. Our position is simple: DRM doesn't add any value for the artist, label (who are selling DRM-free music every day — the Compact Disc), or consumer, the only people it adds value to are the technology companies who are interested in locking consumers to a particular technology platform. We've also been saying that DRM has a cost. It's very expensive for companies like Yahoo! to implement. We'd much rather have our engineers building better personalization, recommendations, playlisting applications, community apps, etc, instead of complex provisioning systems which at the end of the day allow you to burn a CD and take the DRM back off, anyway!"

Files downloaded from Apple's music store come with Apple's DRM - called FairPlay (isn't that ironic?). Songs are encoded using FairPlay-encrypted 128 kbit/s AAC streams in an MP4 wrapper. Let's see the restrictions of FairPlay:
* number of machines allowed to use purchased music within 24 hours: 5
* number of times you can CDs of the same playlist: 7
* only iPod and a small number of Motorola phones (Motorola ROKR E1, Motorola RAZR V3i) can play the files.

One workaround to the DRM is to burn the file to a CD. Another way is to use Hymn, a software that removes FairPlay. "The purpose of the Hymn Project is to allow you to exercise your fair-use rights under copyright law. The various software provided on this web site allows you to free your iTunes Music Store purchases (protected AAC / .m4p) from their DRM restrictions with no loss of sound quality."

Michael Gartenberg, from Jupiter Research, says that "Microsoft is clearly going to face a battle here. It is going to be hard for them to create the same level of cachet that Apple has with the iPod."

Yahoo's project has its own restrictions: "You may transfer a Permanent Download an unlimited number of times to compatible portable devices that adhere to the Usage Rules and security requirements. Once you have transferred a Permanent Download to a compatible portable device, you agree not to copy, distribute, or transfer it from that device to any other media or device." Another issue is that the fingerprints added in the song may raise privacy concerns.

The problem of DRM is far from being solved and the solutions provided by companies like Yahoo and Microsoft aren't going to solve it. I'll conclude with Moby's opinions about file-sharing and an original campaign of David Berlind, ZDNet Executive Editor :

my thoughts on file-sharing?
well, as i've said before i'm happy and flattered if anyone makes the effort to listen to my music, regardless of the medium by which it's delivered.
i'm glad that the apple i-store exists, because that seems like a potentially healthy way of dealing with this situation, by offering downloads for a fairly reasonable price.
and in general i do not support the efforts of the riaa regarding file-sharing.
i didn't support them when they cracked down on internet radio (which really wasn't even their stated domain). and i don't support them now that they're cracking down on people who've engaged in file-sharing.
i know for a fact that a lot of people first heard my music by downloading it from napster or kazaa. and for this reason i'll always be glad that napster and kazaa have existed.
i'm sure that this is not a very popular thing for me to say, but it's the truth. i believe that we're moving towards some sort of resolution, though.
and i hope for happy endings for all involved: record companies, musicians, music lovers, record stores, file-sharing sites, etc. everyone just needs to bend a little bit and the situation will be remedied (i.e-supporting your local record store, supporting things like apple's i-store, charging less for cd's, recognizing that file-sharing has served a great promotional value for record companies, musicians not expecting to get rich from selling music, etc).
and the riaa certainly shouldn't prosecute people for listening to music. i can understand prosecuting people who copy and sell cd's, but i can't understand prosecuting someone because they love music and have a few illegally downloaded songs on their hard-drive.
thanks,
moby



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