Apple : The New Bad Guy In The Music Industry

The official line : The iPod is an amazing MP3 player. It organises the songs and podcast for easy access; The unique ear buds are ear friendly and produce great sound; The price is one of the lowest in the market; Combined with iTunes, the player provides unlimited access to all the songs I want.

The reality : MP3 is an amazing player but I had to fudge the MP3 player heavily in order for it to do the things I want from it. Let’s get right to it :

I) The first thing is the DRM (Digital Rights Management) issue.

As everyone probably knows by now DRM is a way protecting copyrighted material. Since almost all the music on the market is copyrighted, DRM is a part of all the legal downloadable music out there. What does DRM on a song do? It limits the ability of the user to make copies to other MP3 players (including other iPods) although you can make unlimited number of CDs. So
why is DRM an issue for me? Well the first one is that DRM packs a lot of muscle. In the form of storage and in the form of processing by the MP3 player. This would have an added affect on the battery of the iPod which is now getting old.

The second, and more importantly, I cannot change the format of the songs to MP3. This is a big drawback for me as I like to listen to podcasts which are not always in AAC format (the Apple format). I know I can convert the podcasts to AAC (that an additional cost) but what about the numerous songs I have on my PC that I downloaded from P2P sites and some paid sites? I have
spent almost $50 on downloading 3GB of music, all in MP3 format. What happens to those songs? So, I had to stick to MP3. This of course means that I have no access to the $0.99 songs from iTunes because they are in the AAC format.

This lockdown on the format is one of the main drawbacks of the iPod / iTunes combination for me.

II) The second thing is that Apple will most probably make the same mistake with iPod as they made with Mac in the early 80s. All said and done, Apple was the first company with a successful business model for online music. The $0.99 song or $9.99 album is well within the means of youth and very appealing to legal conscious adult population. The problem is that Apple is notorious for it’s monopolistic business practices. Back in the 80s, rather than open the architecture of their highly successful and technologically advanced computers to other companies (like IBM did in the early 80s), it had a stranglehold on it’s brand and the result is that Apple now occupies a niche rather than lead the computer world. I fear the same will happen with iPod. Rather than open to new ideas from the market, they will try and hold on to their successful business model. This means they will be successful for a few years but as the prices of the other MP3 players continues to drop and new business models are introduced, they will have to either let go of their lead or, again, occupy a niche.

I know this is very speculative but Apple has proven again and again how to forge ahead of the pack and then meekly step aside.

III) The third that really irks me about Apple is despite it’s burgeoning power in the music industry, it is still toeing the RIAA line. RIAA (Recording Industry Association of America) is the body that controls the music in the U.S and it’s affiliates (like RIAC : Recording Industry Association of Canada) in the rest of the world. What they say in the music business, goes. If they don’t like the fact that you can download music from a site for free (like the P2P networks), they will do everything in their power to shutdown the site (E.g. Kazaa, Napster, Morpheus etc.) To drive their point to the citizens of the western world that copying and downloading is illegal, they will sue grandmothers and little kids for thousands or dollars. But along came Apple and showed them how to make money out of downloading and everyone is happy for a few months. And then RIAA starts to dictate terms. DRM; Increase in price of the songs; Charge more
for the popular songs. So far Apple has been able to fight off these very silly trends but there are indication that RIAA will dictate to Apple how to run their business.

This is exactly what is happening in France.

The French government is going to pass a law that says that Apple has to let the users change format of the songs to whatever they wish. This, of course, means that the DRM needs to be stripped off. This is going to be a big no, no within RIAA. And there are strong indications that if this law comes into effect in a month or so, instead of trying to come up with a better model to
accommodate French laws, Apple will pull out of the French market!! Imagine that. Rather than find a model other than the one they have (which Apple will have to do sooner or later), they just snub an important market. This is in line with RIAA.

In conclusion, Apple is on the cusp of some major changes in the music industry. It needs to show some creativity in leadership (like it did when it came up with iPod) to clear a path for music lovers around the world. I (and, I am sure, millions of others listeners) are sick of the way music industry functions.

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