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.