Another music titan (Sony) bites the Apple dust

Another music titan (Sony) bites the Apple dust

Summary: News.com's Greg Sandoval: The behemoth Japanese conglomerate [Sony], which once controlled the portable music market, announced Tuesday that the company's data compression technology would be compatible with a number of rival formats, including Apple's format of choice, AAC....

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TOPICS: Legal
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News.com's Greg Sandoval:

The behemoth Japanese conglomerate [Sony], which once controlled the portable music market, announced Tuesday that the company's data compression technology would be compatible with a number of rival formats, including Apple's format of choice, AAC....In the past, Sony has fiercely held to its own Atrac system. By switching to a technology that supports AAC, Sony appears to be acknowledging Apple's dominance in the digital music playing market, say analysts....Sony's new management system will allow iPod users to swap some of their music to a Sony Walkman, but only songs they ripped from CDs....Music downloaded from Apple's iTunes music store is prevented from playing on non-Apple devices by Apple's digital rights management technology.

Format-level compatibility isn't going to change Sony's fortunes anytime soon.  This is how software stacks work.  Once some layer in the stack is proprietary, the owner of that proprietary layer owns the end-users.  AAC, which stands for Advanced Audio Coding isn't actually Apple's technology.  In fact, Sony is one of the companies along with Dolby and others that originally developed the AAC.  So, it probably has royalty-free access to AAC (a big advantage).   Not only is Apple's digital rights management tech (DRM.  Apple's version is called FairPlay) a proprietary technology that's layered on  top of AAC, Apple isn't licensing it to third parties like Sony. Or maybe it is (like the way it did to Motorola for the iTunes phones) and Sony wasn't up for extortion.  Given Apple's monopoly-like control of online music sales, if a potential licensee wants in, Apple can charge whatever it wants to license FairPlay and tell the licensee to take it or leave it.  Take it and line Apple's coffers.  Leave it and Apple will be happy to leave the iPod as the only device out there that can playback iTunes purchased music.

Sandoval couldn't reach Sony executives. But given Sony's wealth, I can't imagine that they didn't try to go all the way on compatibility by licensing FairPlay. That the fact that they didn't (regardless of what drives that fact) gives you some idea of the control Apple has.

So, for now, Sony's adoption of AAC is useless for music that will be bought in the most convenient way. Today, that way (a la carte purchases on the Internet) only accounts for 6 percent of the music industry's revenue.  Every year, it goes up, and eventually, there will be a landslide.   Increasingly, music buyers will opt for a la carte purchases of music because it makes no sense to buy an entire CD if all you want off of it is one or two songs.  Plus, you don't have to go to the store or wait for Amazon to ship you anything physical.  The convenience is overwhelming.  So to is the fricitionless experience of getting the music into your portable music player.  Rip? Sure, some people claim to have the time to burn and rip CDs.  Most people have better things to do when a better alternative exists.

Topic: Legal

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  • Others will adopt Fair Play eventually

    The problem is that Apple owns the market and they make a
    mint from iPODs. When and if they decide to open up will
    depend on a variety of things. If iPod sales taper off or Apple
    starts to lose marketshare they may open it up but 80%+ market
    saturation changes the way you do business, just look at
    Microsoft. Apple has been in the same business as Microsoft
    long enough to have learned a trick or two. When you have an
    advantage, leverage it to maximize profits and use it to sell
    other products.

    When the time and money are right Apple will license FairPlay.
    Right now they are using iTunes to sell computers.
    MacGeek2121
    • Only if Apple lets them

      AAC is not FairPlay. FairPlay is Apple's DRM system built on top of AAC. Apple not only does not generaly license it but Apple also does not allow other companies to make their formats play on the iPod with alternate DRM schemes. Real came up with Harmony which did just that- allowed Real's DRMed files to play on the iPod and Apple broke it.

      Apple prevents compatability going both ways.
      Edward Meyers
    • Absolutely right

      At the moment, with the dominance of the iPod, there's more money to be made from iPod sales than there is from FairPlay licensing. At some point in the future, the balance will tip the other way, and Apple will license. It's fairly easy math.
      tic swayback
      • Apple

        Makes almost nothing on the iTune songs. Apple's cut is 20 cents and from that they have to pay for bandwith, servers, software, and marketing. In otherwords Apple is giving you the songs at their cost.

        They do this so they can sell you an iPod at a large margin.
        Edward Meyers
  • LOL!

    It doesn't hold water if the author was paying "technical attention" to the issue.

    Maybe a look over to http://arstechnica.com/journals/apple.ars/2006/5/11/3921 if you don't mind. ;-)
    RShea78
    • Not so funny as it might seem...

      [b]It doesn't hold water if the author was paying "technical attention" to the issue.[/b]

      From the article you quoted:

      [b][i]And how much of a big change is this for Sony? Not much. If there's an interesting "story" here, it's only the fact that Sony realizes that when it comes to non-protected music, supporting both AAC and MP3 makes sense. Is this a surprise? Of course not. See... AAC not only isn't "Apple's format," but Sony was part of the team behind it! If anything, Sony is just joining the mass of other technology companies that already support non-DRMed AAC.[/i][/b]

      And here's where things get quite psychedelic and confusing... Sony supporting "non-DRM'ed AAC."??

      This IS the same Sony that brought the concept of the rootkit to the general masses' attention last year... The company that got SO anal about CRAP, they put their customer's computers at risk just so they could control how many copies of a song the end user could make.

      NON DRM'd AAC? From SONY?!?!?! Shirley you jest!
      ("DON'T call me Shirley!") {/sarcasm}

      Look for a NEW DRM package to be dumped onto AAC's back. It might be Microsoft's Plays4Sure. Or it could be something else Sony came up with.

      SO now we've got a bunch of AAC files lumped into a directory - some are Sony, some are Apple. Can you tell which is which without trying to open one up? Probably not. They all want to work with iTunes - but that seems to be a problem as iTunes can't make heads or tails of it. Whoops, that's a Sony track.
      Wolfie2K3
  • Monopoly-like

    Show me where consumers are harmed.

    This spector of Apple's power looms large yet everyone seems to
    be getting what they want. Where is the beef exactly? Is Apple
    going to use their "monopoly-like" status to satisfy us into
    submission? Once they have us right where they want us, then,
    mark my words, they will lower prices further. Who will save us
    from this approval?

    Is it lack of choice then?

    Esther Dyson groks it. She point out the increasing problem with
    choice. Consumers are tired of looking at a wall full of bobbles.
    They have to choose just one in the end anyway. Why not choose
    a service stack intead of a trinket. Consumers get it too. The
    choice of different shells with the same brain and the same deal
    is no choice. Thanks but no thanks Microsoft.

    Apple sees fit to offer a integrated service. Many are starting to
    understand that the hardware is important only to the extent
    that it's integrated with the software. In the face of open
    architectures blunders, this new dynamic is being played out. It
    turns out that Apple is the only company in the consumer space
    that ever offered this integration. Go figure.

    As growing consumer satisfaction with the iPod/iTunes
    experience threatens to reach new precipitous high, the other
    shoe has to drop right?

    Actually no, it doesn't.

    A monopoly inch is as good as a monopoly mile, and Apple ain't
    anywhere near there yet. But the news might in fact be worse
    still. When you consider this new emergent paradigm of
    integration, In light of this, Apple is not just the only maker of
    iPods. They are the only makers of computers as well. Heaven
    help us from the plague of satisfaction to come.
    Harry Bardal
    • Animal Farm alive and well at ZDNet

      Of course Sony could have joined 'the club' in the beiginning
      when offerred the opportunity. They declined.

      All the others could have shown an interest in using the AAC
      MP4 standard but didn't want to know back then when fooled
      into thinking Microsoft would crush all opposition. They didnt.

      When France realised that their Bill would most likely damage
      their own companies and economy more than benefit their own
      industry which of course was their sole purpose they castrated
      it.

      Using ITunes tracks, even the purchased ones, for their phones
      is not in fact illegal it is fair use. Of course you didn't bother to
      check the facts here as it would take a way from a good yarn.

      Apple's drawn out argument with the record companies to keep
      the 99 cents pricing structure is to keep down the price of tracks
      not as you would like your readers to think cheat users in some
      way. Strange that you seem to be portraying the record
      companies as in some way the poor old good guys here, now
      that is a novalty.

      Interesting ending mind asking the very people who demand the
      DRM should actually refuse to work with the very people who
      have saved them from uncontrolled piracy (of their own making
      too) in the first place. Because if your final logic regarding the
      impossibility of making this 'wideplay' concept even work at all
      (lets be serious plays for sure sure doesn't) then your real gripe
      appears to be Apple dared to be different and refuse to fall
      under the steam rollering Microsoft hegemony, which so many
      others do without a whimper nor any concern whatsoever for
      their customers of course.

      Good stuff guys and girls irony surely isn't your strong point it
      seems..
      spyinthesky
      • 4 legs good 2 legs Baaad!

        First off DRM has done nothing to curb piracy. If you believe the RIAA and MPAA that is... Piracy is still on the rise.

        DRM is useless as an anti-piracy measure becuase the people who pirate are well... Pirates and don't play by the rules, hence will get around the DRM.

        DRM on the otherhand does destroy many rights that the consumer has held under copyright law due to copyright holder's rights being excepted. It also is being used to give both the copyright holder and DRM maker the right to specify upon which device the material will play on, and number of devices, if any. DRM goes beyond rights that are given to the copyright holder by the law by denying the user access to the material unless they agree to whatever terms the right holder wants to apply. get that the copyright holders and not Congress sets the terms and restrictions with DRM. This is not a situation where someone is trying to play a cassett tape on a 8-Track but rather the copyright holders telling you that you can only play your music on two Apple cassett players even though you own 6. Also forget about playing that cassett on the SONY player as these songs will only play on Apple cassette players.

        This is like the razor companies. They give you a razor and then make all thier money on blades. FYI Apple only makes 20 cents per download. The artist makes a nickel. Apple takes such a small cut as they want to sell you a nice high margin iPod to play your iTunes on.

        He asks where is the consumer harmed? The consumer is harmed becuase now you are locked in, to a higher priced player I must say, and must purchase one brand or another player or loose your investment in the tracks you have purchased. The consumers rights that they have under Fair Use and Doctrine of First sale have also been stripped away.

        In addition look at how apple treats Linux, Unix, and other BSDs. Is there a Linux, Solaris, or BSD iTunes app? Why not there is a Real player and method to play Real's Rhapsody songs on Linux, Solaris, and BSDs. If you argue that they will eventually port ; it is easier to port the iTunes app from OSX to a *Nix than to Windows so why was a Windows version created before a *Nix one? (Answer they have no intention of ever supporting *Nix).

        FYI it doesn't matter if the DRM lock in is from MS, Sony, or Apple as it is bad from either company.
        Edward Meyers
        • Competition

          "He asks where is the consumer harmed? The consumer is
          harmed becuase now you are locked in, to a higher priced
          player..."

          I'd suggest you avail yourself of the of the options and recognize
          that that happens within a competitive environment. Apple's
          value proposition is the integration. The laugh here is that iPods
          were never cheap and have gotten decidedly less expensive.
          Apple is responsible for offering the cheapest way to by a single
          song in this planet's history so let's separate a simple value
          proposition from the conspiracy theories. They are doing more
          than any company has to make music immediately accessible
          and affordable. Hardly the hallmarks of a monopolist. Hardly
          consumer harm. The usage rights are liberal and being
          embraced by millions to the exception of a Microsoft alternative.
          You know them, the convicted monopolist.
          Harry Bardal
          • Don't worry

            Slattery v. Apple Computer Inc will give Apple it's chance to get to be a convicted monopolist.
            http://news.findlaw.com/andrews/bt/cmp/20050922/20050922slattery.html


            Also $0.99 per track is NOT the cheapest way songs have been sold. Several of the indie labels sell CDs for $8.00 - $12.00 and the Cds have 10-15 tracks... do the math it is quite a bit less. Not to mention Wal-Mart is selling downlaads for $0.88 which is 11 cents cheaper than iTunes and several stores are selling at 79 cents and some are selling for Gasp less than that. Not to mention the artist themselves (Quite a few FYI) gave the internet archive permision to post high quality recordings for free download from thier live performances in unencumbered formats.

            The iPod price has been coming down but so has all digital players. You can get a non-iPod player now for under $30.00 USD while as the cheapest iPod is 3X that for the iPos schuffle.
            Edward Meyers
        • Why Windows and not *Nix...

          [b]In addition look at how apple treats Linux, Unix, and other BSDs. Is there a Linux, Solaris, or BSD iTunes app? Why not there is a Real player and method to play Real's Rhapsody songs on Linux, Solaris, and BSDs. If you argue that they will eventually port ; it is easier to port the iTunes app from OSX to a *Nix than to Windows so why was a Windows version created before a *Nix one? (Answer they have no intention of ever supporting *Nix). [/b]

          Can you say MARKET SHARE? Like it or not, Linux's market share figures - while they ARE growing to an extent - are still off the proverbial radar for MOST companies to deal with and invest in.

          In other words - why plunk down $100,000 to develop an interface that supports maybe 10% of the market (on a good day) when they can plunk down $750,000 to develop that Windows version and open up 85 to 95% (depending on who you believe) of the market?

          For what it's worth - that reliable 90% (average)of the market looks to be a MUCH more profitable arena than if you added all flavors of *nix together.

          And let's not forget there's that nasty bit about *nix - it's gotta be open source. That won't work when your profit margin depends on keeping your software and the DRM CRAP behind it CLOSED and under your control.

          Of course, they NEVER intended to do a Linux version.
          Wolfie2K3
          • OSX is a Nix

            That is why FINK exists which is all about porting other *Nix software to OSX. A Linux/Solaris version wouldn't have been that hard. In fact a free unlicensed (*cough*ilegal*cough*) iTunes like app exists that can handle iTunes songs, part of which was written by DVD John called Play Fair.

            Apple could have worked with the guys who did the front end to replace the backend with something other than Play Fair -the whole thing would be legal then.

            [i]And let's not forget there's that nasty bit about *nix - it's gotta be open source. That won't work when your profit margin depends on keeping your software and the DRM CRAP behind it CLOSED and under your control.[/i]

            Turbo Linux and Linspire both include non-free legal closed DVD players and legal binary only closed Windows Media 8 and 9 Codecs. Real Player 10 has closed portions in it , this is what makes Real Player different from Helix. Nvidea and ATI are releasing closed binary drivers. There are closed freeware, shraeware, and comercial apps for Linux.

            [i]Of course, they NEVER intended to do a Linux version[/i]

            Agree 100% percent. I also would add that if Windows didn't have it's 90%-95% then there wouldn't be a WIndows version either.
            Edward Meyers
  • If you don't rip, you're an idiot

    Okay, maybe not an idiot, but c'mon, it only takes a couple of minutes. If you've got a pile of cd's, you can always hire a service to rip it for you. Why settle for a DRM'ed, low quality, low bandwidth copy of a song when you could get a higher quality copy with a hard copy backup, not to mention artwork and packaging?

    What's next, claiming that people shouldn't have to backup their files? Backup? Sure, some people claim to have the time to burn a backup CD. Most people have better things to do when a better alternative exists.
    tic swayback
  • so when are the feds going to slap this monopoly down like AT&T? (nt)

    :)

    .
    wessonjoe