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April 4, 2007

itunes_store

Where there’s smoke, there’s…mirrors?

Posted Apr. 4, ’07, 9:36 AM PT by Dan Moren
Category | iTunes » iTunes Store

Evil JobsSteve Jobs is evil. Let’s get that out of the way. The man has a black pit where his heart should be, and he loves nothing more than to crush the dreams of consumers around the world, whilst laughing maniacally away, high on his floating orbital destruction platform. In his spare moments, he enjoys kicking puppies, stealing candy from babies, and generally undermining peace and happiness around the world.

Or so Fast Company’s Alex Pasquariello would have you believe.

Pay no attention to that man in the mock turtleneck behind the curtain. Too much fanfare, [sic] Apple’s Steve Jobs and British music giant EMI Group announced that for an extra $.30 they will sell songs on iTunes without copy protection. But this is all smoke and mirrors—Jobs and EMI are simply selling you the rights they took from you in the first place.
Life, liberty, the pursuit of happiness. That’s what they’re selling you. All at $1.29 a track. Oh and double the audio quality. What? What? Pretend you didn’t hear that.
Now you can buy the Rolling Stones’ Satisfaction and play it on your iPod or your…wait a minute. What else is there?

Instead of protecting copyrighted music, Digital Rights Management (DRM) has been the device by which Apple has put the strangle hold on the digital download and music player industry. Ask the fools who bought Microsoft’s Zune. Until yesterday, DRM dictated that when you downloaded a song on iTunes it could only be played on an iPod. And iTunes has more than 70 percent of the market for music downloads, according to market research firm NPD. So who’s really benefiting from DRM? Apple.

You see, without DRM the iPod would have been a failure. A blip. Gone the way of the Diamond Rio or Crystal Pepsi. And iTunes? Pshhh. Nothing more than a fad. We’d have gone back to our 8-track tapes in no time.

To the dismay of consumer advocates and music fans, the music industry has pushed DRM as the only way of reducing piracy of copyrighted music. But DRM codes have been cracked left and right, providing little satisfaction to artists and record labels trying to make an honest buck.
Putting “record labels” and “honest buck” in the same sentence is a little bit like mixing yourself a drink of matter and anti-matter. Give it a try: you’ll never find a better drink. Ever. Because you, and everything you care about, will have been wiped off the face of the universe. Anyway, what happened to that $1.5 billion that record companies have made from iTunes sale? I realize it might be a small portion of the recording industry’s total honest bucks, but it’s not a figure I’m going to sneeze at. Was it squandered away on yachts and trips into outer space?

Seriously, though, I’m liking this whole “honest buck” thing. Think of the marketing campaign the RIAA could turn this into: a music exec on his way home from the coal mine, covered in soot. Working all day to extract just an ounce of precious musical talent from the raw, unformed, would-be popstars lined up at his door. Because, you know, it’s hard out there for a pimp.

So, if DRM is such a boon to Apple, then why were they so quick to drop it? Tell me that, smartypants (no, really, those are sharp slacks—what are those, khakis?):

Jobs’ recent rants against DRM are a ploy to distract us from the increasing number of legal challenges to its business practices, especially in Europe. And no sooner had Jobs made his announcement yesterday than European commission officials confirmed that Apple and the record companies that sell songs on iTunes are facing an antitrust inquiry over the pricing of songs on the iTunes service.
Ah ha! That’s right. A ploy to distract us. Nothing whatsoever to do with, say, making more money by giving consumers what they want. Just a convoluted variation on the old “Look over there!” trick. Then Apple scampers off in the other direction to wreak more havoc on an unsuspecting populace, charging prices willy-nilly all over Europe with sometimes up to 10 cents difference.
The commissions’ statement of objections does not allege that Apple is in a dominant market position and is not about Apple’s use of its proprietary DRM to control usage rights for downloads. Yet DRM provides the curtain behind which Apple is all too happy hide.
What is it with you and curtains? Were you attacked by one as a child? Is that where the monsters hid? Apple’s not hiding behind DRM; they’re pointing out that the record companies control the licensing of the music, which prevented them from opening a pan-European store. Could it be that the record companies also control the wholesale pricing of tracks from country to country? Does Apple really need to charge the equivalent of 10 Euro cents more for the UK? Are they in that dire straits? Are these all pretty rhetorical questions?
So, DRM may soon be a thing of the past—but not until Apple used it to put other music downloading and listening platforms under their thumb.
Well isn’t that just like a computer company. Sure, they were all about protected AAC when it was young and pretty, but now that it’s the uggo at the party, they’re off with its hot sister, unprotected AAC.

But you’ve yet to answer this question to my satisfaction: how did DRM really enable Apple to destroy its competition? I mean, there were plenty of other stores, like Napster and Rhapsody, who made music that didn’t work on the iPod. How come they didn’t end up with the bigger marketshare? There’s this odd idea floating around that somehow Jobs and co. injected the iPod and iTunes with some sort of nicotine-like addictive substance, and that the hapless consumers had no choice but to drink from the Kool-Aid.

Look, the market was chock full of music services and players. There was plenty of competition, and plenty of options for music lovers. So why did the iPod and iTunes succeed? Because it was the best. Not because it was perfect, but because it was better than everything else. And isn’t that how things are supposed to work? If you think that dropping DRM was nothing more than Apple billowing clouds of smoke, well, I think you might want to look in the mirror.


11 Comments

John said:

You see, without DRM the iPod would have been a failure. A blip. Gone the way of the Diamond Rio or Crystal Pepsi. And iTunes? Pshhh. Nothing more than a fad. We’d have gone back to our 8-track tapes in no time.

Ba,ha,ha,ha,ha,ha,ha,ha!!
I don't think so. What a bunch of FUD. iTunes and the iPod is the best product on the market and that's why Apple is number 1 today. DRM has nothing to do with it's success

April 4, 2007 10:54 AM
jayH said:

OH MY GOD I THINK I JUST DIED LAUGHING.

crystal PEPSI is the best thing since the macintosh.

but anyway.. does DRM REALLY make people THIS upset? i'll never understand.

would ANYONE explain to me who is forcing ANYONE to buy songs from iTunes? :dizzy:

April 4, 2007 11:52 AM
John said:

Again, people Jobs NEVER wanted DRM. Read the interview give immediately after the music store was finally announced for Mac and Windows.

There is not change of heart. He's simply saying what he has always said.

http://www.rollingstone.com/news/story/5939600/steve_jobs_the_rolling_stone_interview/

April 4, 2007 12:01 PM
hawkman said:

Whilst I have to agree that this is frankly ludicrous, I have to say I'm glad that the pricing differential is being looked into. The differences across europe are about 17¢ US, and the British price equates to about $1.56 per track... I can't help but feel it's unfair.

They probably should be going after the record labels not Apple, but I'm glad they're at least trying.

April 4, 2007 4:21 PM
Hawkman said:

An addendum to my comment - that's based on DRMed tracks, which are $0.99 in the US :(

April 4, 2007 4:23 PM
allgood2 said:
Well isn’t that just like a computer company. Sure, they were all about protected AAC when it was young and pretty, but now that it’s the uggo at the party, they’re off with its hot sister, unprotected AAC.
LOL! I'm stating unequivocally, that if your a male choosing between a protected and unprotected sister, go with protected. Now as a female...
April 4, 2007 5:45 PM
jackfrost Author Profile Page said:

Well put, Dan.

April 4, 2007 6:21 PM
Marc said:

I would recognize that writing style anywhere!

I have met the Macalope,... and it's Dan Moren!

Good job, Dan.

April 4, 2007 8:13 PM
marcos said:

I tried to post this at fastco, but it didn't take.

I think the real weakness of your argument, or perhaps your ability to mount an argument, is your bringing in the matter of different pricing between regions in the EU, which is an unrelated issue. You would know this if you had a basic knowledge of music IP issues. You would know that the price differentials have their foundation in byzantine copyright agreements that occur not just on a per country basis, but in some cases on a per artist basis. So we can't even blame the labels for this one. Hell, they're actually trying to rationalize the system and hide the mess from the enduser.

I think everyone else pretty much covered the other weaknesses of this blog entry, so I won't belabor the point, other than to wonder how people like you get jobs writing nonfiction. (Zing!!)

There is plenty about Apple and Jobs to criticize (as well as a lot that they get right), but you are barking up the wrong tree in this case.

----

I guess it would be fair to further note that Pasquariello tries to buttress his (extremely weak) argument by invoking the EFF, but the EFF has in fact come out in hearty support of this deal, as well as Jobs' earlier pronouncements.

I think it's fair to say that Pasquariello doesn't know what the hell he is talking about. He should be sacked, and replaced with a crew of llamas. Then the llamas should be sacked. Then the person doing the sacking should be sacked.

April 5, 2007 1:22 AM
JulesLt said:

The only danger in saying that the best product wins is that . . . well it justifies Windows.

Of course, it's the knowledge that you can use market dominance to force sub-standard products (like IE) on the market that probably leads to half the suspicion about the iPod.

BTW - the pricing differential isn't the issue. CDs are different prices across Europe. However, there is no restriction on you buying a Spanish CD in the UK, which is what the debate is about. (The idea being that an open market should, in itself, drive price harmonisation through competition).

April 5, 2007 4:32 AM
Derik said:

No, clearly Dan is drunkenbatman.

April 5, 2007 5:14 AM

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