Op/Ed iTunes and Microsoft; David and Goliath?

[The_Rorschach]

Apple Is The Teacher
Posted: 21 May 2003

By Evan Coyne Maloney

The success of Apple Computer's new iTunes Music Store shows that people are willing to pay for music that they could otherwise steal online.

Apple is succeeding where others have failed through a confluence of factors, but the store's ease-of-use and its lenient, unobtrusive copy protection system are frequently cited as the prime reasons.

Some competing systems require monthly subscription fees and penalize users by disabling purchased music when subscriptions lapse. Others are streaming-only, a radio-like model where you can listen to whatever is on, but you can't keep what you hear. Some won't let users made CDs or copy music to portable devices like MP3 players. Apple's system has none of these restrictions. (Nor do MP3 files, which probably accounts for the format's ubiquity much more than the record industry view that its prevalence is simply an indication of the number of music listeners who are no-good thieves.)

The failure of previous attempts at online distribution show that customers who are used to owning what they buy don't want to pay residuals to listen to music they've already purchased. Nor do customers appreciate being subjected to a virtual frisking by intrusive digital rights management systems whenever they want to play a song. And customers who have grown to love the convenience and capacity of portable MP3 players don't want to give them up, either.
Back to the Future

The obvious lesson from all this is one that the software industry learned in the 1980s: paying customers won't be paying for long if they're forced to bear the disproportionate burden of schemes intended to stop other people from breaking the law. This rule still applies, as Intuit--the maker of Quicken and TurboTax--discovered recently.

Whether or not the music industry pays heed and listens to its customers is an open question. But many believe--myself included--that if Apple's success continues, it'll spell the end of in-your-face digital rights management.
The Microsoft Angle

On C|Net's News.com, Joe Wilcox and Evan Hanson argue persuasively that the adoption of the file format used in Apple's music store--an open standard that's part of the MPEG-4 specification--could undermine Microsoft's ability to garner support for its proprietary Windows Media format. (The competition between AAC--the format chosen by Apple--and Windows Media is a new example of the ongoing struggle between open standards and proprietary technologies.)

Many believe that Microsoft's past tactics represent nothing more than legitimate hardball capitalism. Even if that's true, Microsoft is discovering that what constitutes smart competition can sometimes be stupid business. Too often, other companies learned the hard way that partnering with Microsoft benefits nobody but Microsoft. This fostered a skepticism of working with the company that may now be hindering the adoption of its Windows Media format.

"It's common sense that entertainment industries are cautious about working with Microsoft. Now more than ever they look at the long-term implications of making deals with Microsoft," says analyst Lindy Lesperance to C|Net.

In other words, the music industry knows what we in the software industry figured out years ago: when you get in bed with Microsoft, there's never any question about who will be on top.
Why We Need Tort Reform Now

In My Jones Began With Tom on OpinionJournal.com, James J. Kerrigan takes a humorous look at what may some day be adjudicated in courts: the very real possibility that the convenience afforded by--and impulse-shopping enabled by--the iTunes Music Store could lead some spendthrifts to financial ruin.

Once the busybody nannies get done banning smoking, Oreos, fast food and sodas, this will be class-action lawsuit of the future.