Billboard: 'incompatibility slowing growth of digital music...

[MacBytes]

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Category: Opinion/Interviews
Link: Billboard: 'incompatibility slowing growth of digital music market' (http://www.macbytes.com/link.php?sid=20050813195939)

Posted on MacBytes.com (http://www.macbytes.com)
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[hob]

It's a shame that this has had to happen. It'd be nice if the whole world would bow down to Apple and then there would be no problem. But that wouldn't happen for the same reason that everyone wont bow down to Microsoft.

Shouldn't the music companies stop complaining? They're still getting their money, they just have to offer... umm... TWO formats...! That's like when there was Audio Tape and CD. It really shouldn't be that big a deal.

[winmacguy]

It's a shame that this has had to happen. It'd be nice if the whole world would bow down to Apple and then there would be no problem. But that wouldn't happen for the same reason that everyone wont bow down to Microsoft.

Shouldn't the music companies stop complaining? They're still getting their money, they just have to offer... umm... TWO formats...! That's like when there was Audio Tape and CD. It really shouldn't be that big a deal.
Yeh that would be great but one of those formats DOESN'T belong to Microsoft ;) (That ubiquitous computer software company whose software runs on 95% of the world's computers :p )

[iMeowbot]

The labels are threatened by Apple, not so much by the compatibility but because Apple have practically locked up the download market.

With physical media, different formats weren't a problem for the labels because they were sold by a variety of outlets. If retailer A didn't like a label's terms or prices, the label didn't have to care. All it took was for retailer B to agree to those terms; retailer A had to go along if it didn't want customers to take their business down the street.

With FairPlay, the labels have a problem. iPod is the biggest selling line of players, and Apple own the only distribution channel with iPod-compatible DRM'd downloads. If Apple don't like terms offered by a label, what can the label do? The other download services aren't in the running because they aren't compatible, so the label has to either give in to Apple or lose out on those sales (and adding to the fun, they are also under the threat of artists breaking away to get themselves onto iTunes). That's about the size of it, it's a fight over who has the power to set prices.

[winmacguy]

The labels are threatened by Apple, not so much by the compatibility but because Apple have practically locked up the download market.

With physical media, different formats weren't a problem for the labels because they were sold by a variety of outlets. If retailer A didn't like a label's terms or prices, the label didn't have to care. All it took was for retailer B to agree to those terms; retailer A had to go along if it didn't want customers to take their business down the street.

With FairPlay, the labels have a problem. iPod is the biggest selling line of players, and Apple own the only distribution channel with iPod-compatible DRM'd downloads. If Apple don't like terms offered by a label, what can the label do? The other download services aren't in the running because they aren't compatible, so the label has to either give in to Apple or lose out on those sales (and adding to the fun, they are also under the threat of artists breaking away to get themselves onto iTunes). That's about the size of it, it's a fight over who has the power to set prices.

Maybe the labels could help themselves by allowing for CHEAPER CD prices :eek:

[winmacguy]

Japanese musicians under contract with Sony (NYSE: SNE) Latest News about Sony and other labels that haven't joined Apple's (Nasdaq: AAPL) Latest News about Apple iTunes Music Store are starting to defy their recording companies and are trying to get their music on the popular download service launched last week in Japan.

At least one artist has already gone against his label to offer his songs on iTunes. And a major agency that manages Japanese musicians said today it was interested in a possible deal with Apple Computer, regardless of the recording companies' positions.
Click Here
Sudden Impact

Online music stores had not taken off in Japan until last Thursday's arrival of iTunes, which opened with a million songs from 15 Japanese record labels.

In just four days, customers downloaded 1 million songs -- the fastest pace for the service's launch in any of the 20 nations where it's become available, including the U.S. Most songs cost 150 yen (US$1.35) to download, and only 10 percent cost 200 yen.

Sony had better admit defeat soon or face becoming completely irrelevant in the music download business.

[hob]

Sony had better admit defeat soon or face becoming completely irrelevant in the music download business.
What is it with Sony and their proprietary formats?! They should've learned their lesson a long time ago. Look at what happened with MiniDisc. I loved minidisc, it was really useful for portability - I could take 10 albums around with my on a player smaller than an ipod and 10 little square thingies that were lovely. Obviously the iPod overtook that, but it was useful for recording etc. At school we'd always record our music work straight onto mini disc, at home or whatever and bring it in to share.

Annnnyway, Sony started releasing albums on Minidisc. From memory, albums that would cost about £13 or £14 on CD would cost around £17 on minidisc, so it would be more cost efficient for me to buy the CD album and a pack of blank minidiscs and just re-record it later.

If they really wanted the thing to take off they could have at least priced it at the same price as CDs if not lower.

The same with their SACD stuff - why lock users into having to buy an SACD player which will only play stuff in Sony-BMG's library? I think SACDs sound great, but i'd rather there was one open surround-sound format so I could buy one player and 100,000's of albums on that one format.

Hob

[MarcelV]

With FairPlay, the labels have a problem. iPod is the biggest selling line of players, and Apple own the only distribution channel with iPod-compatible DRM'd downloads. If Apple don't like terms offered by a label, what can the label do?
Don't forget , it's also the other way around. Without labels and music, iTunes would not exist, iPod would be much less successful. This is very similar as why VHS won the VCR war. It was the worst of the 3 standards (yes, there where 3, VHS, Betamax and V2000, where V2000 was the best one but had minimal titels available.) They both need eachother. And I am not suggesting Fairplay is worse than Microsift's DRM. (I even think Fairplay is a better DRM, let alone comparing WMA with AAC. Because that's an easy one... :) )

[rjwill246]

One has to look at this issue from the vantage point of a few years ago when there was no iPod and no iTunes music store. MP3s and P2P were the norm and the music industry was most unhappy. Along comes Apple with an elegant solution to the problem and with much persistence and negotiating, the music companies, the consumers and Apple got something positive out of this. Then along come the the Ginny come latelys, who have done little research, development or difficult negotiating and they want an equal opportunity with Apple! While it has become de rigeur for the computer/music industry to behave like this, it is no less galling to see Apple being asked to give away its advantage to others, just because.... Well, music executives might want to see more music sold and other manufacturers would love to cash in on Apple's success- who wouldn't, especially if you haven't had to work for it?- but no one is making anybody buy an iPod or use the iTMS for that matter. There are plenty of other choices out there. Heck, Windows users have an enormous choice compared to Mac users.

It is amazing that the music industry and other MP3 player/iPod wannabes want to dip into Apple's success with no regard for the effort and costs Apple incurred to get this part of its business off the ground. They are of course furious that they haven't been able to ride Apple's coat-tails- such would have been a wind-fall since Apple paid for all the ground work.
To suggest that Apple is being obstinate and unfair is so silly. After all, I cannot go into the Mercedes dealership with only enough money to buy a Honda and expect to be treated seriously- nor can I seriously demand BMW parts to be installed in my Camry. I would be laughed out of the store.

Until those companies that have enjoyed such an easy ride by being under the MS umbrella can get over the fact that the dreadful renegade company, Apple, is now in the driver's seat with music, the better.

[Loge]

The record companies can't have it both ways. They can have interoperability right now by not using DRM and selling regular mp3s, which some are doing, to their credit. Or they can have DRM and accept that the files will only work on certain hardware.

[macnulty]

The idea that incompatible music (read DRM) formats is holding back sales is dubious at best. Almost as if the incompatible Windows OS is holding back OS sales. Someone ( my apologies to whomever for forgetting) has said before in MacRumors that the reason behind all the RIAA fud is the music industry has lost control of digital music ( read pricing ) to Apple, and that wasn't supposed to happen. If the market had splintered into relatively equal competitors, RIAA would be in control as they are in dealing with record stores. Here's the thing: with Apple in control of the digital market, Walmart with a significant and growing percentage of the CD market RIAA has diminishing influence over THE one product that gives them reason to exist.

[hulugu]

If the labels—and any of those tech-writers—were honest they would not that its not interoperability, but rather DRM that is the leading problem for digital music. People want seamless systems with a high-amount of integration, they want their CDs, but better.
The best system that is out there is Apple's AAC w/ Fairplay, and even that system has some glaring flaws and problems, most notably the limitation of computers that can be 'licensed' to play music, but also the limits on playlists, the inability to move songs from one iPod to another machine without jumping through a few hoops, etc. And this is the best one!
Furthermore, Microsoft's Plays for Sure is not a guarentee and thus users are simply afraid of moving to a new service or device once they've found something that works. Thus far, that has been the iPod which offers a fairly transparent system that users understand and feel comfortable with. If the labels are serious about interoperability, they should demand that Fairplay become licensed and do away with WMP entirely. Otherwise, they should shut the hell up, because the minute I have to use WMP to play digital music is the day I dump the whole thing.

[macidiot]

At least this article was a pretty fair assessment of the market. I was half expecting the usual stuff implying that WMA is somehow an "open" standard, while Apple is the mean bully with its "closed" standard.

[shamino]

The same with their SACD stuff - why lock users into having to buy an SACD player which will only play stuff in Sony-BMG's library? I think SACDs sound great, but i'd rather there was one open surround-sound format so I could buy one player and 100,000's of albums on that one format.
Which is why I prefer to buy DVD-audio discs. These are all playable on DVD-video players in addition to dedicated DVD-audio players. (Although the highest bitrates are not available on video players.) Even if the format tanks, I'll always be able to buy a compatible DVD player.

SACD? I like the hybrid format. You get the hi-def audio on SACD players, and the disc is still playable on standard CD players (at CD quality, of course). And the discs don't cost any more than normal CDs (at least the few I've bought via BMG didn't.)

I will never buy an SACD-only disc. With those, you may find yourself in trouble, should the format tank (the way Beta did for video.)

[shamino]

Here's the thing: with Apple in control of the digital market, Walmart with a significant and growing percentage of the CD market RIAA has diminishing influence over THE one product that gives them reason to exist.
That's the story on the distribution side.

On the production side, it's even worse. Anybody with $25,000-50,000 can build himself a professional quality recording studio. Equipment is so cheap and plentiful that professional studios are not necessary anymore. Musicians can build their own studio or rent time from a non-record-label studio. They can record their music on their own time, at their own expense, and not owe the record labels a thing when they're done.

They can then choose to either sell directly to the public (via downloads or services like cdbaby.com). And if they want to use a major label, they can have the contract written such that the label handles distribution and nothing else - without giving them ownership of the copyright.

A few major bands, and a whole lot of small ones, are doing this. And the trend will continue.

This has the record companies running scared. Their entire business model is based on exploitation of both musicians and music-buyers. Digital recording tech (programs like ProTools (http://www.digidesign.com/products/hd/) and Logic (http://www.apple.com/logicpro/)) are hurting them at one end, and services like iTMS (which will sell your songs even if you're not signed with a major label) are hurting them at the other end.

If they had any brains, they'd wise-up and come up with a plan to make consumers and musicians want to do business with them. But they have no brains - their plan of attack is to make their customers even more angry than they are now, using increasingly draconian terms and lawsuits. Which means they'll eventually run themselves out of business.

I just hope it happens soon. And good riddance.

[jhu]

Which is why I prefer to buy DVD-audio discs. These are all playable on DVD-video players in addition to dedicated DVD-audio players. (Although the highest bitrates are not available on video players.) Even if the format tanks, I'll always be able to buy a compatible DVD player.

SACD? I like the hybrid format. You get the hi-def audio on SACD players, and the disc is still playable on standard CD players (at CD quality, of course). And the discs don't cost any more than normal CDs (at least the few I've bought via BMG didn't.)

I will never buy an SACD-only disc. With those, you may find yourself in trouble, should the format tank (the way Beta did for video.)

the problem is that dvd-audio has stronger encryption than regular dvd movies. fortunately its already been cracked.

[shamino]

the problem is that dvd-audio has stronger encryption than regular dvd movies. fortunately its already been cracked.
That's a different issue. But it's of lower priority to me. Most important is making sure I'll always be able to play the disc I paid for. Once that is settled, then we can talk about other things (like ripping to computers).

And, as you say, it's already been cracked.