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Current | Archives
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Friday, February 23, 2007
Download What?
According to a column in the USA today, the music download business is yet to take off. In the article Kevin Maney goes as far as to calling it a failure. He is talking to both purchase models like Apple's iTunes Store or rental models like Yahoo music and Rhapsody. The idea is that none of these business have really taken off. I am not sure what Kevin Maney would call a success but Steve Jobs admits that a low percentage of songs on iPods are bought off iTunesSome have argued that once a consumer purchases a body of music from one of the proprietary music stores, they are forever locked into only using music players from that one company. Or, if they buy a specific player, they are locked into buying music only from that company’s music store. Is this true? Let’s look at the data for iPods and the iTunes store – they are the industry’s most popular products and we have accurate data for them. Through the end of 2006, customers purchased a total of 90 million iPods and 2 billion songs from the iTunes store. On average, that’s 22 songs purchased from the iTunes store for each iPod ever sold. Today’s most popular iPod holds 1000 songs, and research tells us that the average iPod is nearly full. This means that only 22 out of 1000 songs, or under 3% of the music on the average iPod, is purchased from the iTunes store and protected with a DRM. The remaining 97% of the music is unprotected and playable on any player that can play the open formats. It’s hard to believe that just 3% of the music on the average iPod is enough to lock users into buying only iPods in the future. And since 97% of the music on the average iPod was not purchased from the iTunes store, iPod users are clearly not locked into the iTunes store to acquire their music. One of the first big problems here is that the CD has yet to die. When the iTunes Music store launched in 2004 I did not expect to be buying non protected CDs in 2007. Part of that is that all the CD protection schemes have sucked. The worst of all was the Sony BMG XCP. That was so bad that companies might have scurried away from DRM CDs in fear forever. I think iPods have become so big that most the people I know will not buy CDs that they cannot rip to iTunes. Everyone wants MP3 so they can take their music with them. I would return any CD I could not Rip. For my friends who do not use iTunes, they usually give me three reasons. DRM is the first reason. Everyone knows that iTunes DRM is easy to beat. All you need to do is burn it to a CD and Rip it again. This is still too much of a hassle. We want it without any DRM. They would also like it better if it was MP3 The second reason is because of the Backup policy. If you buy a song from iTunes and lose it, you have to buy it again. That really sucks. This is an electronic world. If I am really buying the music license I should be able to re-download the song. The third and maybe more important is the quality of the music. AAC, the iTunes music format, is not a lossless format. For me the discount is not deep enough for me to buy the music in a lossy format. If it is an album I am excited about I will buy the CD. If it is something I just want to try, I will buy it from eMusic. I only buy music from iTunes when I have a gift card. To be honest I think it is too early to call download music service failures. If they are still in business they are not a failure yet. I know that everyone wants everything to move in internet time, but I think this is a sign that real world time still counts for something. We are still in the first generation of these services. I think that they 2.0 versions might surprise us. Labels: eMusic, iTunes, Kevin Maney, music, Steve Jobs, USA Today
- Rich,
6:26 PM
It looks like Steve Jobs was right
It looks like HD DVD and Blu-Ray has been cracked. That did not take very long at all. I am not sure how long the industry predicted it would take. My guess is that they did not think it would happen before the formats got popular. This is a great example of how a DRM system does not work correctly. A DRM system has to either have a public key like DVDs. The problem with public keys is that people have all the time in the world to break them. Very smart people try to break the keys just for the challenge. The other choice is to have a system where the keys are always being updated. The problem with this included having to have the device get updates and not being able to play all content on all devices. In the end DRM is not going to work. There are too many holes. It is not the matter of building a better mouse trap. It is a matter to not treating your customers like rats. I do not think the content industry will learn this lesson anytime soon. Labels: Blu-Ray, Cracked, DRM, HD DVD, Steve Jobs
- Rich,
6:00 PM
Sunday, February 11, 2007
More about DRM
It looks like the forces of status quo in the music world are lining up against Steve Jobs in the fight over DRM. I expect the Record Companies will not just rollover to for Steve Jobs. My guess is that think the record labels think they have the control when it comes to iTunes and Apple. Here is a quote from Edgar Bronfman made during the Warner Music Group F1Q07 Earnings Call: Let me be clear: we advocate the continued use of DRM in the protection of our and of our artists’ intellectual property. The notion that music does not deserve the same protections as software, television, film, video games or other intellectual property simply because there is an unprotected legacy product available in the physical world is completely without logic or merit.
But let’s not lose sight of the core issue. By far the larger issue for consumers in the music industry is interoperability. As a content company, we of course want consumers to seamlessly access our music and to use the music they have purchased on any platform and with any service, physical or digital.
The issue is obscured by asserting that DRM and interoperability is the same thing. They are not. To suggest that they cannot co-exist is simply incorrect. At Warner Music, we continue to seek a balance between appropriate protections for our intellectual property and a robust and satisfying music experience for consumers. Interoperability sure would enhance that balance, while eliminating DRM would do just the opposite.
We will not abandon DRM, nor will we disadvantage services that are successfully implementing DRM for both content and consumers. I recognize that there are interesting music business models that only work with strong DRM. Any kind of music rental service like Rhapsody only work DRM. You have to be able to turn off the music if the customer quits paying for it. The problem with this business model is that it depends on the music companies putting DRM an the rest of their music also. It is the only way money can be made off the business model. Bronfman makes a classic mistake in his argument above. He claims that Music deserves the same protection as Movies, Software, or Television. He is saying that Intellectual Property is Intellectual Property no matter what the form. He is making the mistake of viewing music the way he wants to view music, not the way his customers want to view music. Most of the customers I know view all these forms as different from each other. That is what is important in the end. I think Apple has more control than the companies recognize. I am not sure if the average person could tell you what label their favorite artist is on. The average record label might say this is unimportant. The record label controls distribution. A major artist would not need to be with a able to get their album on iTunes. If they cut out the record company, they might be able to take the smaller sales that would come from not having a physical CD. Labels: apple, DRM, music labels, Steve Jobs
- Rich,
5:24 PM
Thursday, February 08, 2007
End to Music Copy Protection
Steve Jobs has called for an End to Music Copy Protection. Steve Jobs' essay it pretty interesting. Before I read the essay I thought this was pretty surprising. After I read it I could see where he was coming from. He would rather get rid of all DRM than open up FairPlay. I will agree that DRM systems are bad for customers. It is bad because it makes the usability of products bad. It makes it so products cannot work with each other. It makes so companies have to twist like pretzels to get those products to work. It makes it that customers are screwed when those products do not work together. The problem with DRM is that it is a drain on the economy. It is a greater drain then piracy. If people are going to pirate music the flaw is with the business model. The flaw is how people make money off the product. The flaw is how the artist get paid. In the end if the people who own intellectual property do not realize that we will all suffer. The risk companies run with too much DRM is the customers will turn away from their products all together. In the end that is much worse than piracy. Labels: apple, DRM, Steve Jobs, usability
- Rich,
8:26 AM
Tuesday, October 17, 2006
This is a new kind of Survivor episode
Today the Mercury News is asking, Is Steve Jobs safe?. The options backdating scandal is still out there. A lot of Silicon Valley executives have already been forced out because of this scandal. The questions is, will it catch up with Steve Jobs or not. "I don't think there is anybody who is too big, too important or too rich to go to jail. That applies to Steve Jobs as well," said Paul Hodgson Sr., a senior researcher for the Corporate Library. "If he has done something wrong, he has got to go, regardless of the situation." I wonder if people are painting a bulls-eye on Steve Jobs. There are a lot of people out there that would like to see him go down, I am not sure if government investigators are some of those people or not. Steve Jobs lead Apple back from the dead. He is also the CEO of Pixar and on the board at Disney. I am not sure what would happen to these companies if he went to jail or had to resign. Labels: apple, back dated options, mercnews, scandal, Steve Jobs
- Rich,
2:47 PM
Thursday, October 05, 2006
Back dating Options
It appears that Steve Jobs $1 of salary was not all it was cracked up to be. It looks like Apple has been back dating options. For people who think this is a big deal, this is a fraud commited against the stock holders. That is always a big deal. Labels: apple, back dated options, Fraud, Steve Jobs
- Rich,
8:44 PM
Tuesday, September 12, 2006
iTV - I Could swear Someone Else Owns that trademark
I looked at Apples Announcements today about the new iPods and new iTunes Movie Store. I think that Apple has done a lot get into a place where they can download video to people. I think they answered a lot of the questions I had last week. I am happy to see that the movies and TV shows will be downloaded at 640x480 now. I think this is important. This makes it much more watchable on a larger screen. It will still look kind of crappy on a big TV. I wonder if they are working their way up to HD signals. That would take a lot more bandwidth. I am not sure about the selection of movies. They are launching with 75 movies. That is a lot less than Amazon has right now with Unbox. Apple is only launching with movies from Disney. I wonder how long it will take Steve to get other studios on board. I am interested in seeing the iTV hardward. I could swear that someone owns that trademark already. Maybe Apple bought it too. It has HD outputs, I wonder if HD content is coming. I wonder if that hardware will have a hard drive or not. If there is HD content without a hard drive, that will be rough on home networks. The iTV is an answer that Amazon Unbox does not currently have. I think the iTV as shown implies that Steve Jobs has no interest in broadcast. He has said before that he was not interested in making a DVR. The iTV would lead me to believe this is true. There are no video inputs just video outputs. I wonder if it will be able to stream DVDs also. I think the new iPod Nano without video is a good move. The Nano is already the most popular iPod ever. I see no need to ad video pay back to that product. I think it helps them create a value proposition for the regular iPods. I think they are really creating a family of products not just putting the same functions on every product. Labels: apple, appleTV, download, ipod, iTunes, Steve Jobs
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