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  • The Apple Music Report: Debunking the Conventional Wisdom

    September 21st, 2006

    When Apple’s iPod and iTunes ecosystem was first established, some analysts decreed that Apple was making a huge mistake, the same one it made when it originally decided not to license the Mac operating system.

    On the surface, having a unified standard might seem like a pretty good idea. This way, you can mix and match your music players and music services, and be assured of full compatibility. It would work the same way as a DVD; well, except for those competing high definition DVD formats, of course. Isn’t that the best way to serve your customers?

    I suppose I tended to agree with the conventional wisdom as well, but as the market has shaken out, it doesn’t seem to have quite worked that way, and the music player and legal download market has turned upside down — towards Apple’s direction. In other words, towards a closed system; not one, but many.

    The initial casualty, although the gravestone hasn’t been engraved, is Microsoft’s “PlaysForSure” digital rights management scheme. Officially, it’s still functioning, and probably will remain active, just to keep the antitrust regulators at bay, but we all know the truth. Yes, players will probably continue to be made and marketed to work with music stores that use the system, but it’s a huge question just how long that’s going to last.

    Microsoft’s Zune player and its forthcoming music store was only the beginning in the realization that going it alone is the better idea. Although the response to the first player has been a collective yawn so far, I suppose with enough marketing muscle, and regular product updates, I suppose it’s possible it’ll gain some market share, although it may be mostly at the expense of the company’s partners, such as Creative.

    In the wake of this upheaval, music stores and player makers are apt to seek new alignments to accomplish the same ends as Apple, more or less.

    Take that deal with RealNetworks and SanDisk involving the “Rhapsody DNA,” which is supposed to be some sort of offline “cache” of the Rhapsody music store. Although the platform, apparently a software overlay, is supposed to be compatible with “PlaysForSure” products, it supposedly doesn’t use Microsoft technology.

    Does it sound confusing to you? You have company. This system sounds, well, a little confusing, and I wonder just how Real is going to convey the message to its customers about what it’s doing and the impact.

    At the same time, Napster, once a name notorious for illegal downloads, hasn’t done all that well as a legal music subscription service. Memberships are down, and published reports indicate that the “for sale” line has already been posted, but I think it’s a huge question mark whether anyone would want to buy it considering the state of the market.

    Unfortunately, this desperate drive to rain on Apple’s parade will probably only muddy the waters even further. Instead of having Apple against “PlaysForSure,” it’ll be Apple against several digital media fiefdoms that may or may not be compatible with each other. Imagine how that’s going to shake out in the marketplace.

    In the end, Apple may benefit, of course, and come to dominate the digital media market more than ever. At the same time, without meaningful competition, enhancements to the iPod and iTunes may stagnate, and that’s not a good thing.

    Apple may end up seeing its worst enemy facing it in a mirror.



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