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The Quest to Break iTunes
March 21, 2006
The Apple iPod has become the definitive MP3 player on a near global scale. Other than minor inconveniences concerning easily scratched displays, it’s difficult to find any wide spread disappointment with the quality or performance of these units. This image persists despite more moderately priced units such at the Creative Zen.But the iPod has something the Creative Zen doesn’t – exclusive, member’s only access to Apple’s proprietary DRM (Digital Rights Management) – otherwise known as FairPlay. Unlike its name suggests, FairPlay only plays fairly on the Apple iPod. The only place to obtain AAC files graced with FairPlay DRM is the iTunes music store.
For most people, this matters very little. For Apple’s competition, this is a very serious problem. As the iPod has gained MP3 player supremacy, most people are finding very little reason to venture outside iTunes to find the music they want.
Here’s the foundation to this logic. iPod music players are only compatible with the MP3, AAC, and WAV file formats. The kicker is they are not compatible with Windows Secure WMA file format. This file format is the standard of virtually every other authorized service, such as Napster and Rhapsody. Yet with the iPod the undisputed leader in MP3 player prevalence, the question of WMA compatibility for many becomes moot.
This situation in turn helped ignite the iTunes music store. With the MP3 market flooded with iPods, the well marketed integration of the iPod and the iTunes music store becomes seamless. It doesn’t hurt the iPod isn’t capable of participating on other authorized music services either - but interestingly enough functions just fine with unauthorized music.
So we have a situation where the iPod is the dominant MP3 player, which helped turn iTunes into the dominant music store. With over 80% of the market share, competitive services such as Napster and Rhapsody have been struggling to maintain a viable presence in the authorized digital marketplace. The solution, they claim, is to force Apple to open their proprietary FairPlay format.
The result of forcing Apple to open their format, proponents theorize, would level the competitive playing field. iPod owners could trek to Napster and download their favorite WMA encumbered files, while Creative Zen owners download FairPlay tunes. In the United States, legislation forcing Apple to open their format has been met tepidly, even from iTunes’ competition. Faith in the capitalist market system, rather than government intervention, is the current preferred course of action.
Where faith in capitalism isn’t as strong, an alternative course of action may be implemented. Such is the case in France.
France has caused a string of turbulence since December 2005, when the National Assembly marginally passed a P2P reform amendment. The amendment aimed to legitimize P2P participation by placing an 8 Euro levy on Internet access. The levy would be used to compensate artists and copyright owners, yet the entertainment industry lobbied heavily against it. Although part of the same legislation as the iTunes amendment, the P2P section was eliminated.
Today the French National Assembly will vote on the iTunes amendment, where it is expected to pass onto the Senate. The amendment, part of a much larger copyright reform bill, would force all authorized distributors to open proprietary formats. Although designed for a wide range of companies, the most obvious impact will be on Apple Computers.
As momentum is building for this amendment to become law, the repercussions from such a reform are unclear. The music industry’s leading trade organization in Europe, the IFPI, has expressed support for the bill, as it would weaken Apple’s music dominance. Yet Apple’s position on the issue is unclear. Slyck.com’s repeated requests for comment, as have all requests from various media outlets, have gone unanswered. Left only with speculation, if the French government does enact this amendment, Apple Computer’s could be placed in tight situation. They could opt to close iTunes France, yet that may allow the remaining competition to flourish. Alternatively, Apple could decide to open their format to the competition; however that would strike at the very heart of their near flawless marketing strategy. Rather than give up such a precious trade secrete, the more likely scenario would force iTune’s departure from France.
Whatever the outcome today, all sides of the online digital music debate stand to be affected. France is encouraging other members of the European Union to introduce similar legislation, which could eventually limit Apple’s strategy to simply pack up and leave an unfavorable market. The entertainment industry would enjoy seeing Apple pushed to the wall, giving an important bargaining chip to the music industry and their desire to implement variable pricing. File-sharers are also monitoring the progress of this amendment, as it too has implications for the P2P world.
Apple’s position as the lead authorized music service has given an unforeseen advantage to P2P, as it not only forces alternatives such as Napster to compete against free file-sharing, but Apple as well. Eliminating Apple’s position would reduce the two hurdle obstacle to only one in their effort to win over the hearts and minds of the free file-sharing world. While consumer advocates may be championing the French government to legislate Apple into submission, many file-sharers are more apprehensive. Keeping the cross-incompatibility status quo intact has benefited the P2P world – dissolving that may not.
Update: French lawmakers have approved the new copyright bill, which will force Apple to open its proprietary format. The bill also introduces new penalties for music piracy, but the real question is how Apple will react.
France has caused a string of turbulence since December 2005, when the National Assembly marginally passed a P2P reform amendment. The amendment aimed to legitimize P2P participation by placing an 8 Euro levy on Internet access. The levy would be used to compensate artists and copyright owners, yet the entertainment industry lobbied heavily against it. Although part of the same legislation as the iTunes amendment, the P2P section was eliminated.
Today the French National Assembly will vote on the iTunes amendment, where it is expected to pass onto the Senate. The amendment, part of a much larger copyright reform bill, would force all authorized distributors to open proprietary formats. Although designed for a wide range of companies, the most obvious impact will be on Apple Computers.
As momentum is building for this amendment to become law, the repercussions from such a reform are unclear. The music industry’s leading trade organization in Europe, the IFPI, has expressed support for the bill, as it would weaken Apple’s music dominance. Yet Apple’s position on the issue is unclear. Slyck.com’s repeated requests for comment, as have all requests from various media outlets, have gone unanswered. Left only with speculation, if the French government does enact this amendment, Apple Computer’s could be placed in tight situation. They could opt to close iTunes France, yet that may allow the remaining competition to flourish. Alternatively, Apple could decide to open their format to the competition; however that would strike at the very heart of their near flawless marketing strategy. Rather than give up such a precious trade secrete, the more likely scenario would force iTune’s departure from France.
Whatever the outcome today, all sides of the online digital music debate stand to be affected. France is encouraging other members of the European Union to introduce similar legislation, which could eventually limit Apple’s strategy to simply pack up and leave an unfavorable market. The entertainment industry would enjoy seeing Apple pushed to the wall, giving an important bargaining chip to the music industry and their desire to implement variable pricing. File-sharers are also monitoring the progress of this amendment, as it too has implications for the P2P world.
Apple’s position as the lead authorized music service has given an unforeseen advantage to P2P, as it not only forces alternatives such as Napster to compete against free file-sharing, but Apple as well. Eliminating Apple’s position would reduce the two hurdle obstacle to only one in their effort to win over the hearts and minds of the free file-sharing world. While consumer advocates may be championing the French government to legislate Apple into submission, many file-sharers are more apprehensive. Keeping the cross-incompatibility status quo intact has benefited the P2P world – dissolving that may not.
Update: French lawmakers have approved the new copyright bill, which will force Apple to open its proprietary format. The bill also introduces new penalties for music piracy, but the real question is how Apple will react.
This story is filed in these Slyck News categories
Authorized Music Store :: iTunes
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