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MacRumors
Dec 16, 2003, 03:26 AM
SFGate.com (http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/12/15/BUGO23MF8I1.DTL) reports on an upcoming service to be offered to businesses by Loudeye Corp in partnership with Microsoft.

The new Digital Music Store service from Loudeye and Microsoft will allow companies to quickly launch their own online music stores. Two early customers of the new service include AT&T Wireless and Gibson Guitar Corp.

The file format offered, of course, will be Windows Media 9. Loudeye will act as a middle man, allowing companies to launch services without going through negotiations with record labels and the process of creating the infrastructure required.

In related news, Destra has relaunched (http://www.destra.com/investors.asp?action=media&mID=26) their music download service in Australia also based on Windows Media. (Note: Destra's service is unrelated to Loudeye).

AndrewMT
Dec 16, 2003, 03:29 AM
I awlays wanted my own music store. Where do I sign up?

whfsdude
Dec 16, 2003, 03:42 AM
If Apple doesn't make any/much money on iTMS I don't see how Microsoft can. Loudeye would cut profit margins even more.

weave
Dec 16, 2003, 03:48 AM
Wow, you too can open your own online music store. Just list a whole buncha links into iTunes music store.

Of course, you won't get squat in revenue from it, but either are the big players.

Plus, you better hurry before your corner Texaco convenience store beats you into the market. Rumor has it that they are opening an online music store too.

Hurry, don't be the last one on the planet without your very own music store!

punter
Dec 16, 2003, 03:48 AM
this sounds dangerous. Giving more companies the tools to create their own online music stores... using wma files.

But I'm not too concerned because I believe itms is going to blast after the pepsi and maccas promotions. And if worst comes to worst, I'm sure apple could teach the ipod to play wma files. I seem to recall steve saying they were considering all available options, but just didn't see the point right now of allowing other music store downloads to go on the ipod.

edit: are there any articles on wma vs aac vs mp3 for sound quality? I encoded some stuff on the pc at work on wma on the best setting and it was horrible. I had to assume I had an old program or wrong settings.

winmacguy
Dec 16, 2003, 03:56 AM
Originally posted by punter
this sounds dangerous. Giving more companies the tools to create their own online music stores... using wma files.

But I'm not too concerned because I believe itms is going to blast after the pepsi and maccas promotions. And if worst comes to worst, I'm sure apple could teach the ipod to play wma files. I seem to recall steve saying they were considering all available options, but just didn't see the point right now of allowing other music store downloads to go on the ipod.

edit: are there any articles on wma vs aac vs mp3 for sound quality? I encoded some stuff on the pc at work on wma on the best setting and it was horrible. I had to assume I had an old program or wrong settings.

There are going to be some big failures towards the end of this year as companies record big losses from down loading music

mvc
Dec 16, 2003, 04:05 AM
As they said at the end of the .com boom - "what's the business model?"

Its pets.com all over again!

Lots of me-too stores sprout up now, each trying to flog off some custom hardware/software to justify the loss-leading song downloads, but three years from now there will only be a handful of major stores and lots of kids closets full of cheap no-name mp3 players with no music to download.



:rolleyes:

CmdrLaForge
Dec 16, 2003, 04:08 AM
In the end only a very few will survive. And Apple will be one of them. I am sure.

Because there business model is based on selling hardware - iPods. Thats where the profit comes from. Not from the store.

tychay
Dec 16, 2003, 04:59 AM
Originally posted by whfsdude
If Apple doesn't make any/much money on iTMS I don't see how Microsoft can. Loudeye would cut profit margins even more.

Where does it say that Microsoft needs to make a profit? Like any monopolist, Microsoft can lose money on their media store indefinitely (see "extracting rents"). Microsoft wants to turn Windows Media 9 into a "de facto" standard and squeeze out MPEG-4/AAC, Apple QuickTime, and Real Helix. This is known as vertical foreclosure and is a type of monopoly maintenance.

They've already squeezed out their own previous versions of their Media Player through the use of "optional" security updates which force upgrades/introduction of their Media Player 9 DRM as well as changes in the EULA.

The court has not yet ruled on whether or not this particular instance fits the legal definition of monopoly maintenance. Because Microsoft is a convicted monopolist, they are supposedly prevented from entering into markets that already have adequate competition (which IMO this certainly qualifies)*. Given the political situation, I doubt action will come in the United States. I imagine the European Union's reaction will depend on how Microsoft enters the market--for instance, will they strong arm OEMs to include the Windows Media music store icon on the desktop by default? Will the music store be activated automatically by software update**?

Microsoft hasn't been successful lately at foreclosing markets: internet service (v. Yahoo, AOL, EarthLink), airline ticket sales (v. Travelocity/Sabre, Orbitz, etc), game consoles (v. Sony and Nintendo), PDAs (v. Palm and now Linux), cell phones (v. Symbian and now Palm), embedded (they were doing well until Linux entered), enterprise servers (Linux has won, Windows 2003/IIS is a niche product), enterprise apps (too many competitors to list)... So I'm not going to start running around saying the sky is falling just yet.

In any case, even if the attempt doesn't work, I doubt Microsoft will make a penny until they've squeezed out Real and Apple. (Don't count out Real. One of the big "selling" points of LoudEye/Windows Media 9 is the distribution of content onto cell phones where RealOne Mobile is doing very well.***) In the meantime, they can disguise losses by folding R&D and some marketing budgets into their OS or Enterprise divisions--both of which make a hefty profit.

The FUD machine is in full force and has been bringing up the spectre of Apple's proprietary past every time iTunes Music Store and the iPod get mentioned. I think this may be a good thing because it'll force Apple to open up their DRM to other parties to counter it as soon as iPod or iTunes Music Store market share start slipping.****

And even if Microsoft forecloses this market, I can still eek out some enjoyment. Given the estimated potential size of the downloadable music market (est. $1.25 billion next year), I have no doubt that Microsoft has some plans to screw over LoudEye in a couple years and I'll get to see that unfold. I'd bet it is somewhere along the lines of how they screwed over Stack or Sybase.

* This reminds me of the origins of Unix. Most of what we call Unix is in the public domain because AT&T was a monopoly at the time and could not make money out of the code they created so distributed Unix without any copyright. This particular monopolist, OTOH, has much less federal oversight and they live and die by their proprietary software.

** I'm going to pre-empt all of you who are going to point out that this is how Apple introduced iTunes Music Store. Apple is not a monopolist, legally or economically. Remember, monopolists are forced to play by different rules because they have an unfair advantage (see again, extracting rents).

*** Just a personal note: I saw a commercial for mp3 ringtones and thought, "Is this most compelling argument that some marketer could think of for bundling a music player with a cell phone?"

**** No, this hasn't happened yet. In fact, some of the retail channels for the iPod are dry. Yeah, great for Apple, but bad for me. I want to see Apple open up FairPlay and make a fair playing field.

tazznb
Dec 16, 2003, 05:05 AM
Microsoft does not want Apple gaining any marketshare in any way, shape, or form, whatsoever.

iTMS & iPod are opening the doors to just that type of thing.

What M$ is trying to do is flood the internet music buying service / experience with GARBAGE. This is an attempt to basically smother the competition (if you can't beat 'em smother them enough to distract).

They can afford to loose tons of money due to Windows.

I can see them putting ads in all versions of Windows sold.... or at least links for this disservice.

AndrewMT
Dec 16, 2003, 05:19 AM
I have a bad feeling that all these music stores and players, and their incompatibilities with each other, are just going to seriously confuse people. Music download formats should be as standardized as VHS, DVD, and CD audio media. Each music player manufacturer should be responsible for making their hardware work multiple popular formats. I think we are a long way away from that happening.

In the mean time, Apple should market their portable music player and music store as the most simple and powerful combination available (because it already is).

Blaaze
Dec 16, 2003, 05:33 AM
This is not going to work.
It's going to put companies in the hole even faster now. And it's going to make Microsoft richer.

So the companies don't ....


wait. I don't know..could this work? Do all operating costs go to this Loudeye-Microsoft partnership, while the company makes whatever profit comes out of it and pays for the service?

Don't know if there's much money to be made, if at all. But I think in the long run, this could work out very well. They help you make some money, while you help them make some money. The essence of business. And with Loudeye-Microsoft offering this service to many companies, it could be very good for them.

Leave it to Apple to be innovative, leave it to Microsoft to be profitable.

Cheers to them. Creating more competion for Apple...there's been a lack of that lately :D

zync
Dec 16, 2003, 06:24 AM
Originally posted by AndrewMT
I have a bad feeling that all these music stores and players, and their incompatibilities with each other, are just going to seriously confuse people. Music download formats should be as standardized as VHS, DVD, and CD audio media. Each music player manufacturer should be responsible for making their hardware work multiple popular formats. I think we are a long way away from that happening.

In the mean time, Apple should market their portable music player and music store as the most simple and powerful combination available (because it already is).

Technically things aren't standard anymore since the introduction of consumer writeable formats....VHS is VHS true...but DVD isn't DVD to consumers..there's DVD+R/RW and DVD-R/RW for video plus DVD-RAM for data....there's CDs of many, many formats other than strictly audio uses including VCD.....I agree that there should be a level of standardization but sometimes that dooms you to using crappy formats...I'd hate it if .wma **** encoding was the standard...AAC is much better...even the dated MP3 is better and far more universal....oh and NON DRM'd! Oh and don't you just love how they say CD-R's may not play in everything? I haven't come across a single player that it doesn't work in...I guess it's possible, I mean my mustang's CD player doesn't seem to like some of them as much when I try to eject them, but I hardly see that being a problem with the CD-R since the discs that have slight problems were windows discs...the mac discs work perfectly and are the same media...indeed, things are messed up though...

punter, all my experience with WMA encoded audio has been terrible...I have not come across a single song encoded in WMA that has sounded good...

johnnyjibbs
Dec 16, 2003, 06:43 AM
Originally posted by tychay
I imagine the European Union's reaction will depend on how Microsoft enters the market--for instance, will they strong arm OEMs to include the Windows Media music store icon on the desktop by default? Will the music store be activated automatically by software update**?

** I'm going to pre-empt all of you who are going to point out that this is how Apple introduced iTunes Music Store. Apple is not a monopolist, legally or economically. Remember, monopolists are forced to play by different rules because they have an unfair advantage (see again, extracting rents).
Yes, but wasn't iTMS turned off in preferences by default? Therefore Apple was covering its back? My new PowerBook (which came with iTunes 4 pre-installed) had the Music Store turned off and there was no sign of it unless I went to the preferences. Although, maybe that has something to do with the fact that I'm here in the UK...

I want to see Apple open up FairPlay and make a fair playing field.
Me too!

foniks2020
Dec 16, 2003, 06:50 AM
I'll quickly reiterate the previous mentions of trying to force any format other than WMA out. Saturate the marketplace then hope you're licensing deals with hardware providers makes up the difference as far as revenue goes (remember Microsoft makes a tiny amount for each WM9 license it sells via portable players).

The only incentive I can see for people to even open these stores is to attract advertising dollars for their special interest portal site. Amazon profit sharing for music downloads basically. Every small niche business can now incude a catalog of music that fits their customer base, similar to how you'll find New Age, Ambient at a candle store or Punk/Hip-Hop at a skate shop or bargain bottom bands at 7-11.

It's an interesting concept but it seems to be overkill in the implementation.

Wouldn't it be easier to just provide an API and a partner code the way Amazon does it? You can sign up, get your code, create your list of songs and for every click-through/download you get a couple cents. How much room for competition on prices can there possibly be? The margins are nearly air-tight as it is.

wwworry
Dec 16, 2003, 07:21 AM
Yes, it might be a ploy just to make WMA the dominant download format. Once you control the medium, the money is sure to follow.

Everyone keeps mentioning how Apple does not make any money on iTunes but that might not be exactly true. Maybe they only make a penny per song which is enough to start a business. I doubt there would be as many competitors if there were large negative profits. (though one can write business loses off one's taxes)

I think Apple should counter with the same instant store that uses AAC files instead of WMA or do something to encourage AAC use. Maybe build it into the quicktime infrastucture or something. Apple was the dominant player in the home PC market in the begining. Then they were forced out by cheaper more widely used alternatives (and dirty tricks). The same thing might be happening again.

rogers
Dec 16, 2003, 07:36 AM
Wouldn't it be something if the iPod WAS the format of choice and followed in the footsteps of the industry standards such as VHS, CD, DVD etc?

I'm guessing that 99% of current/potential music player owners won't care about the format the music is in, they will just want to know that it works as well as popping a CD into a discman regardless of whether they're listening to a AAC, MP3 or WMA file.

If they can make sure the DRM offers the same choice and security, I'm sure Apple will support any format that becomes dominant.

Rog.

the_mole1314
Dec 16, 2003, 07:43 AM
I think this is what Apple needed to do last summer. Get companies to create their 'own' music store (in looks only) and that will directly be linked to the iTMS servers.

Photorun
Dec 16, 2003, 08:04 AM
And don't forget that all these downloads will be in craptacular WMA format which because people are sheep think is the industry "standard," with the "but it's Microsoft it's gotta be good, right?" [loud buzzing 'wrong answer' sound]. Morons.

Not that I'd want my iPod to play crappy WMA this isn't going to help say the soulless unthinking Windoze followers who could be fed a plate of crap by M$ and ask for a heaping seconds. Those owning iPods and enslaved to that platform (or potential buyers) will wonder why they can't download music from these services and play them on their iPods.

It's a potential mess.

garyhoare
Dec 16, 2003, 08:33 AM
They never put out any competing products. They just put out sabotage machines that ruin the entire market.

It's like, "if I can't have it, no one can."

I say if this comes to fruition, then Apple should dedicate itself to producing a completely compatible office suite for Windows and sell it for $19.

scem0
Dec 16, 2003, 08:34 AM
Thank the Lord....

My grandmother wanted to start her own music store. :rolleyes:

scem0

Frobozz
Dec 16, 2003, 08:35 AM
Well, looks like this suffers from the same 2 problems that ANYTHING from Microsoft does:

1) It makes a bunch of totally unreleated and hard to find things instead of centralizing them.

2) It requires you use their proprietary spyware.

... and to think that companies will use this under the guise that it's a good practice!

The problem with this plan, specifically, is that we now get to have a bunch of little independant music stores with the same rent-like DRM that requires a user have WM9 (on Windows). *Yeah!* I can't wait to be suffocating in a mire of horrible DRM practices!

Stella
Dec 16, 2003, 08:45 AM
Music Store overkill.

punter
Dec 16, 2003, 08:58 AM
Side note:I found one web page that analysed MP3 vs AAC vs WMA.
http://www.tomshardware.com/consumer/20020712/2u4u-05.html
(go to the second page, it explains the results)
AAC killed it. The author of the page plays down the problem with WMA as a "curious " dropoff at 14kHz. Wow the graph makes WMA look stupid.

And that would explain why symbols sound pathetic under WMA.

ITR 81
Dec 16, 2003, 09:14 AM
AAC is the way to go not WMA.

Microsoft = WMA
Dolby = AAC
Which would you want??

MS must be planning to lose even more money then other music stores if it's going through a middle man. So it just goes to show you going this route they don't care how the music store works just as long as they have one and it snuffs out other Music Stores.

This just another reason that shows MS doesn't give a damn about the end user experience.

Bengt77
Dec 16, 2003, 09:19 AM
Originally posted by punter
Side note:I found one web page that analysed MP3 vs AAC vs WMA.

AAC killed it. The author of the page plays down the problem with WMA as a "curious " dropoff at 14kHz. Wow the graph makes WMA look stupid.

And that would explain why symbols sound pathetic under WMA.

Where did you find that analysis? Could you put up a link here, please? I want to read it too!

TIA! ;)

temptatino
Dec 16, 2003, 09:20 AM
Originally posted by punter
Side note:I found one web page that analysed MP3 vs AAC vs WMA.

AAC killed it. The author of the page plays down the problem with WMA as a "curious " dropoff at 14kHz. Wow the graph makes WMA look stupid.

And that would explain why symbols sound pathetic under WMA.

punter, what was the site?

dang, should have hit refresh before posting

Bing80
Dec 16, 2003, 09:37 AM
I really hope this won't affect the iTMS like VHS did to Beta.
Beta was a better format, but the producers of VHS filled the market with movies before Beta-people got a chance to catch the train.

A similar thing may happen now. If M$ can start enough stores, WMA will without a doubt be the most used format, and people will "forget" about MP3/AAC/iPod and so on...

It's just like DJing. You got to give the people what they want. Like Photorun said: "They're sheep". Give them more stores, more choices and a sense of control, and they will follow. However crap WMA is, people don't care! All they want is MORE! At the low-end-user (nearly everybody), quantity comes first. Then quality.

As I see it, Apple can either continue to play on iTMS's sleekness and userability, or jump on the M$ train in order to spread like a virus and infect as many as possible :p Seriously. Apple should look into this possibility of creating a sort of template for smaller record stores to put their own music in a web based store.


PS: have anybody else noticed how unprofessional videos on the web are turning from mpeg to WMV? Say no more, say no more...

Fukui
Dec 16, 2003, 09:41 AM
Originally posted by garyhoare
They never put out any competing products. They just put out sabotage machines that ruin the entire market.

It's like, "if I can't have it, no one can."

I say if this comes to fruition, then Apple should dedicate itself to producing a completely compatible office suite for Windows and sell it for $19.
Well, the MS way is for them to build and then tax resellers for the "foundation" that they provide, IOW its thier clients that take all the risk, and wether they profit (bleed to death) or not (ex. PC Industry) the money keeps rolling in.

And I think Steve has been down this road one two many times, if Bill knifes steves baby once again, I think steve's gonna knife Bills Baby (you can guess what that is) too..for a change.

macFanDave
Dec 16, 2003, 09:48 AM
from Bambi Francisco's column at CBS MarketWatch:

"It's not important to make a margin on a digital track," said Loudeye CEO Jeff Cavins. "Consumer brands want to cross-promote products."

That is SOOO 1998! It is the stuff of the illusory business model that caused the dotcom stampede and ensuing panic. Frankly, anyone who goes into this venture without pushing a high-margin item like an iPod (sorry, Bambi, it isn't I-Pod) is going to be sucked into a money-sucking maelstrom.

Even that smug anus, Michael Dell, is probably going to regret his pretentious entry into the music store/music player arena since he is obviously sacrficing margin to sell more of his crappy DJ's. Well, genius, red ink on the music store and slim margins on the players make for a combination that the shareholders won't like. Either Dell will get out of the business or arrogantly subsidize it by stealing from profitable lines in order to avoid admitting defeat.

punter
Dec 16, 2003, 09:49 AM
sorry for not posting the aac vs mp3 vs MWA link before, it's
http://www.tomshardware.com/consumer/20020712/2u4u-05.html

go to the second page of the story where it explains the results (albiet briefly)

bnemesis
Dec 16, 2003, 10:05 AM
Hmmmm......

So Apple has created a high quality music service and also has control of the hardware player that ties into it.

And Microsoft is flooding the market with music services based on their "standard" and has no hardware of their own.


Sounds so familiar.... cant put my finger on it... I swear Ive seen this before... :D

Jetson
Dec 16, 2003, 10:06 AM
That was an excellent article, punter - quite informative.

It looks like AAC is definitely the best format:

a) it's waveform most closely matches that of the original source
b) superior sound clarity
c) storage savings due to better compressibility.

It would be nice if this analysis could be independently confirmed.

macnews
Dec 16, 2003, 11:27 AM
Ok, besides the stupid idea that EVERYONE needs their own music store I realized MS evil plan to kill Apple with this new effort....

See, if anyone can have their own music store using WMA then the WMA format will become the dominate accepted way to download music (beta/vhs anyone?). In doing so MS will either kill off/greatly reduce/or reap $$$ from Apple's online music store. The reaping of $$$ coming from Apple using WMA formats.

Simple idea. Basically follows the same format they used for Internet explorer. "Give it away free since no one is really going to make any money on it" attitude.

Downside to this, MS is known for crappy security. I'm sure someone is bound to crack the DRM in WMA format if the above were to happen. Then MS would either give up (to the benefit of the labels) online downloading and ending an advancement started by Apple - or MS would have such a dominate position the labels would be lossing their ass and not have a choice but to go with MS WMA since the market wants online downloads.

Curious though, the labels bitched at Apple for the mix/rip/burn idea. Now if they get behind MS they will end up hosing themselves (and the public) over with a crappy format like WMA that is sure to be cracked.

Thank god for my iPod and iTunes.

macnews
Dec 16, 2003, 11:48 AM
Originally posted by the_mole1314
I think this is what Apple needed to do last summer. Get companies to create their 'own' music store (in looks only) and that will directly be linked to the iTMS servers.

I disagree with those who have said Apple should go this route. Ever visit buymusic.com? What about roxio or any of the other currently available online music stores? Part of what, IMHO, makes iTunes so great is the ease of use and its duality. Not only is it an online music store, it is also a great juke box that is very easy to use. Case in point, my 55y/o, technology handicaped mother. She uses a computer at school to teach but is "comfortable" once she gets to know it. It has taken her 6 months to get rid of her 6 year old PC computer because of her comfort level. She would rather put up with the crashing than get a new one and learn win xp over win 98. When I showed her iTunes, she was creating her own play list to burn her own CD's in 5 mins. She thought it was so cool (neat - her word).

By allowing "others" to have their own music store you could take away from this functionality. The integration to make it right wouldn't pay off in the long run and could end up hurting Apple. The quick and easy way is to do a hyper link but you could do that now and still have to download the app. I just don't see it being a good thing. We all agree too many music stores are just bad and will eventually thin out to a few major players. Why bother with a bad idea. Work on making it better in the long run and getting market share.

BTW, my mom will not be learning win xp. She bought a 17" iMac last night. Can't over emphasize "it just works."

billyboy
Dec 16, 2003, 11:54 AM
The MS tactic is a rehash of a failed business model, but as the first to market with the reputation they already have for the store, Apple are ahead of the game. "All they need to do" is extend and differentiate the AAC only iPod range in some way to compete on every price range and then reskin the iTunes Store. They knock on all the doors that MS and Loudeye are going to try and break down, then offer the store under license with assorted deals tying in the iPod range.

As the middleman for tunes, Apple are positioned to take half the financial hit of this Loudeye MS set-up. Also anyone interested in a store will know for sure that the music store from Apple is proven and would work straight out the box. Plus they know Apple will forever upgrade and improve it, which is not a trick MS is renowned for.

The worst thing that could happen to Apple is some one else comes out with a genuine iPod killer ie something that syncs about as good as an iPod, (but not quite), but gets sales because its a lot cheaper. ie Apple need to do a MS in terms of flooding the market, but doing it with the best technology.

ariza910
Dec 16, 2003, 12:09 PM
What the hell the Music industry is thinking?

To my understanding last year the record labels fought tooth and nail to not release their music for sale over the internet.

Now they are giving anyone who wants it the ability to sell their music online?

how has it gone from one extreme to the other in less than a year. It cant possibly be the great DRM in the WMA format.

Im geeting the feeling that the big four dont have a clue about online music and they are just trying to make as much cash off this as they can.

I hope to see more independent labels on the net allowing artist to sell directly to their fans. Cutting out all the fat will give the atist much more return. The labels will take on more of a promotional and legal role for the artist.

mrsebastian
Dec 16, 2003, 12:21 PM
this is worse than buying into a horrible 1980s franchise...

you pay us $20,000 and we'll give you a pc, internet access, hosting software, etc. all you have to do is plug it in, name your new music site, link up to our server, and you're making money! it's so easy, even my 80 year old grandmother is doing it and she makes 250 grand a year... don't miss this opportunity of a life time! call 1-800-mymusic now... and if you order in the next 5 minutes, we'll give you a free mousepad!

makes me think, what the F#%K!

winmacguy
Dec 16, 2003, 12:42 PM
Originally posted by whfsdude
If Apple doesn't make any/much money on iTMS I don't see how Microsoft can. Loudeye would cut profit margins even more.
Microsoft is not doing it to make money, just look at Xbox. Microsoft wants to buy market share in music downloading and make sure that everyone uses its format becasue they can afford to and becasue they can.
Incidently PS2 is doing a big pre christmas promo on the radio here at the moment giving away $50,000 of PS2 gear. They have a new PS2 coming out next year-faster gruntier.

AndrewMT
Dec 16, 2003, 12:43 PM
Besides the fact that AAC is better than WMA, Apple seems to be the only music store that will insure the quality of each track. Do stores like Napster or Raphsody digitize their music, or have a third party do it for them?

billyboy
Dec 16, 2003, 12:48 PM
Originally posted by AndrewMT
Besides the fact that AAC is better than WMA, Apple seems to be the only music store that will insure the quality of each track. Do stores like Napster or Raphsody digitize their music, or have a third party do it for them?

One of the articles I read today says that Loudeye do the 30 second samples on the Apple store. Very confusing:confused:

winmacguy
Dec 16, 2003, 01:05 PM
Originally posted by Bing80
I really hope this won't affect the iTMS like VHS did to Beta.
Beta was a better format, but the producers of VHS filled the market with movies before Beta-people got a chance to catch the train.

A similar thing may happen now. If M$ can start enough stores, WMA will without a doubt be the most used format, and people will "forget" about MP3/AAC/iPod and so on...

It's just like DJing. You got to give the people what they want. Like Photorun said: "They're sheep". Give them more stores, more choices and a sense of control, and they will follow. However crap WMA is, people don't care! All they want is MORE! At the low-end-user (nearly everybody), quantity comes first. Then quality.

As I see it, Apple can either continue to play on iTMS's sleekness and userability, or jump on the M$ train in order to spread like a virus and infect as many as possible :p Seriously. Apple should look into this possibility of creating a sort of template for smaller record stores to put their own music in a web based store.


PS: have anybody else noticed how unprofessional videos on the web are turning from mpeg to WMV? Say no more, say no more...

hey iTunes player is FREE to download for PC (2000 and XP) which is why I have it on My PC Win XP. what more could you as for? windows versions prior to that are to old and difficult to write for and no longer being supported buy Microsoft anyway.

Steve has gone down the track of making iTunes avaiable to PC users for free and then in all the advertising with the silouete ads it says for Mac and Windows which is all it has to do.

Apple just has to make sure that they produce enough iPods to satisfy market demand and get them to the people who buy them on time so that the customers are not pissed off.

The link down below goes to the BBC article that explains how the iPod ads work and what the brief was and what was the mesage that the ads had to get across to the public.

The public already know that the iPod is the must have gadget of the year. There has been enough brilliant press written about iTMS and iPod "to sink a battle ship"

All the ad had to do was to let everyone know that iTunes and the iPod work on Windows and Mac . You cant ask for more than that.

http://news.bbc.co.uk/1/hi/magazine/3321943.stm

ennerseed
Dec 16, 2003, 01:28 PM
Apple needs to open up the AAC/FairPlay format to other digital music players. With the "hopeful" advent of a cheap iPod player, Apple will no longer have worries of iPod sales loss if a consumer needs a cheaper device. Apple messed up earlier on with being over proprietary "EVEN WITH THE MARKET LEAD", hopefully they won't repeat this action.

edit: no Vb Code in title... dam

Bing80
Dec 16, 2003, 04:47 PM
My disadvantage here is that I live in Norway, where the marketing pressure from Apple has been fairly low. And the fact that iTMS is not available here either does dampen the "buzz" factor.

Get those hippies in Cupertino off their asses and make them release the European iTMS fast!!!
Then, I think it'll be easier to tell which way this is going.

Still, I think the first to flood the market with it's codec (other than MP3, so it's AAC or WMA) will be the "victorious".

aftk2
Dec 16, 2003, 06:16 PM
Originally posted by winmacguy
Microsoft is not doing it to make money, just look at Xbox. Microsoft wants to buy market share in music downloading and make sure that everyone uses its format becasue they can afford to and becasue they can.
Incidently PS2 is doing a big pre christmas promo on the radio here at the moment giving away $50,000 of PS2 gear. They have a new PS2 coming out next year-faster gruntier.

Yes, but that's no guarantee that it will work. Look at the XBox, for example - still losing out massively to the PS2 (and I even own an XBox). Look at UltimateTV - losing out (if not already dead) to Tivo.

Now, who knows...this may be different, since Microsoft can leverage its desktop monopoly in certain ways. But I don't think there's any reason to panic yet (and incidentally, the PS2 that's coming out next year is a regular PS2 + hard drive + some media center-like functionality. Not terribly compelling, at least as far as I'm concerned.)

CrazyPaco
Dec 16, 2003, 06:34 PM
Why doesn't Apple tout the advantages of AAC in their ads more?

If, as someone mentioned above, AAC is tied to Dolby, why not just add a tagline somewhere like: "Only iTunes and iPod music store feature AAC digital sound encoding. The advanced next generation standard preferred by Dolby and the DVD consortum."

As a consumer, if I didn't know better, I would look at all the features of an iPod vs competitor player and then compare vs price. For a little less ease of use, I'd save my $100 for a heck of alot of music downloads or something else if the features of the competitor's players were comparable. But I wouldn't want to sacrifice quality. IMO, spreading the word about AAC would add value to the iPod.

Throwing the names Dolby and DVD at the average consumer will suggest advanced and pristine audio.

tychay
Dec 16, 2003, 07:40 PM
Originally posted by garyhoare
They never put out any competing products. They just put out sabotage machines that ruin the entire market.

It's like, "if I can't have it, no one can."

Microsoft does business like most people play chess or monopoly. These are known as zero-sum, noncooperative games (for me to win, you must lose). Add to this a long history of screwing over business partners and an irrational fear caused by books such as The Innovator's Dilemma and you have a company fully willing to enter "lose-lose" situations.

Such business models fail in the long term because real economics is not zero-sum and its not non-cooperative. People like Nash proved this mathematically a half century ago.

In the short run, Microsoft has moved themselves into a niche where regular free market doesn't provide an efficient distribution of goods, in this case, they've garnered a monopoly position. Many smart companies have used their monopoly positions as an opportunity to diversify business (think GE and IBM) and to some extent we've seen that with Microsoft (Encarta, MSNBC, Slate, Expedia),

The problem is Microsoft wants to have the cake and eat it to: UltimateTV, XBox, MSN, Windows NT, Windows Media, PocketPC, Windows Mobile, IIS, Internet Explorer, Outlook, Exchange, SQL Server and Access, Office, Project, MSN Search, etc are all designed to further continue their main monopoly (the OS). We've seen that of many companies also (Ma Bell, Standard Oil).

The reality is right now in the OS, we're paying a Microsoft a whole lot of money for stuff that Microsoft didn't even invent and have long since passed into the public domain (TCP stack, compression, etc.). Microsoft knows this and has to do things that encourage lock-in: "de facto" standardization, "embrace and extend", "fear uncertainty doubt", channel stuffing, etc.

It's nothing personal. Apple's AAC/Fairplay (QuickTime) just happens to be in Microsoft's way at the moment and its all zero-sum with Microsoft. As one Microsoft executive put it to Apple years ago about this very same issue: Apple should "knife the baby (QuickTime)."

sethypoo
Dec 16, 2003, 08:25 PM
Could Apple do this too?

I wish Apple and M$ could just agree on a format for their downloads. I know it's impossible, but it sure would set an example. If two computer monguls can get along, why can't everyone else?

Sabenth
Dec 16, 2003, 11:42 PM
they do get along

iTunes / office x
quick time / windows media player

panthr / windows + virtual pc what ever

ah no they dont ah oh well

you know this is a load of bull dust and that who ever suvives wins so lets watch and learn america will be first to see what happens in its market i think

Sayhey
Dec 17, 2003, 02:51 AM
The reasons that all these companies are getting into this are all over the map. Only a very few are actually trying to make money on the internet stores. Those are doomed to failure. Microsoft wants to use its store to make sure of WMA's dominance. The Walmarts, Dells, and Cokes of the world look at this as advertising. They will use internet music sites to suck people into their product or products. These big companies can spend an awful lot to get you look at why you should buy their latest widget.

Fukui
Dec 17, 2003, 03:53 AM
Originally posted by ennerseed
Apple needs to open up the AAC/FairPlay format to other digital music players. With the "hopeful" advent of a cheap iPod player, Apple will no longer have worries of iPod sales loss if a consumer needs a cheaper device. Apple messed up earlier on with being over proprietary "EVEN WITH THE MARKET LEAD", hopefully they won't repeat this action.

edit: no Vb Code in title... dam
AAC is a Dolby format.
Fairplay, is the only thing that may, or may not be proprietary.

zync
Dec 20, 2003, 08:18 PM
Originally posted by ariza910
I hope to see more independent labels on the net allowing artist to sell directly to their fans. Cutting out all the fat will give the atist much more return. The labels will take on more of a promotional and legal role for the artist.

That's what labels do :)

Anyway, these music stores aren't going to work, in my opinion, because of the following:

1. iPod...everyone knows the iPod and everyone loves the iPod, even PC fanatics...Apple touts and has touted about the iPod+iTunes combination and they've had a major jump on any competition in advertising...

2. Many people, especially windows users, hate Microsoft so why give them more business?

3. Anyone who's ever encoded in WMA or heard anything encoded with WMA will automatically label these services as pure crap...

4. Who could honestly put together a store to rival Apple's? Think about it....most everyone knows about Apple's leg up on MS when it comes to digital multimedia...who would you trust with your media? Certainly not a company most notable for it's business applications....

Oh an let's not forget that even Apple itself has said that there's no profit to be had in the iTMS, the money is in the iPod...there are a few other players that could release stores that might expect to succeed but they're all big enough to start their own services, i.e. Sony, possibly BMG, WB, etc...There's no point to having multiple services and who get's paid in the end no matter what service you use? Microsoft, so why waste your time on differentiating between services? Apple has a huge jump on the market and a player that is constantly in the spotlight while every other player is returned after christmas for an iPod...I realize MS can be a loss leader to screw over Apple but you can't be a loss leader if NO ONE USES YOUR SERVICES :D

zync
Dec 20, 2003, 08:22 PM
Originally posted by winmacguy
Microsoft is not doing it to make money, just look at Xbox. Microsoft wants to buy market share in music downloading and make sure that everyone uses its format becasue they can afford to and becasue they can.
Incidently PS2 is doing a big pre christmas promo on the radio here at the moment giving away $50,000 of PS2 gear. They have a new PS2 coming out next year-faster gruntier.

Actually Microsoft makes a hell of a lot of money off of Xbox....sure they lose about a hundred on every unit but the licensing gets them plenty of money from the games, i.e. you buy a few games you've evened out, buy any more and Microsoft makes profit....you rarely make money on hardware (unless you're a supplier/manufacturer), it's almost always the software....

tychay
Dec 21, 2003, 06:30 AM
Originally posted by zync
Actually Microsoft makes a hell of a lot of money off of Xbox....sure they lose about a hundred on every unit but the licensing gets them plenty of money from the games, i.e. you buy a few games you've evened out, buy any more and Microsoft makes profit....you rarely make money on hardware (unless you're a supplier/manufacturer), it's almost always the software....

Actually not true in many ways. First, the lose more than a hundred on every unit--the amount lost varies over time (it can be as high as $200 sometimes). Whenever it looks like Microsoft might break even on hardware, Sony lowers the price of the PS2 to bleed Microsoft a little more.

Second, the amount they lose is not made up in licensing the games. Microsoft's quarterlies show this is dramatic: their entertainment division was making a tidy profit until the XBox launched. I can't remember how many millions it lost last quarter but it was significant. Worse than the Newton was for Apple, but Microsoft is a rich monopolist so they can take it.

Third, while it is true that many vendors have, at times, broken even or lost money off of the hardware sales in a platform, currently Microsoft is the only company that loses money subsidizing hardware sales. Nintendo and Sony at the very least break even. That's why you can download Linux for the PS2 from Sony, but Microsoft engages in a copy production DMCA-induced warfare to keep Linux out of the XBox and is has stated that their move to PowerPC in the XBox 2 was partly to discourage people dropping Linux on it.

The largest mistake Microsoft made with the XBox was centering on commodity PC hardware. This allowed them to enter cheaply but they had to strong arm all the suppliers to get a decent entry price. But once they did that, the suppliers couldn't lower prices any more during the lifecycle of the product. This is evidenced by the fact that neither NVidia nor Intel are in the XBox 2. Sony, OTOH, sunk in a huge entry/design cost but it got cheaper rapidly as they could save money as the platform matured by replacing multiple chips with one multi-functional one.

Finally, the choice of using a PC hard drive was a bit premature. Any person who has worked in the embedded market knows that the hard drive has "a floor" in price and thinks twice before adding it to the Bill of Materials. This floor is way to high to compete on price with Sony and GameCube. That alone will forever leaves Microsoft with a "follow the leader" mentality as to price.

zync
Dec 21, 2003, 06:48 PM
Originally posted by tychay
Actually not true in many ways. First, the lose more than a hundred on every unit--the amount lost varies over time (it can be as high as $200 sometimes). Whenever it looks like Microsoft might break even on hardware, Sony lowers the price of the PS2 to bleed Microsoft a little more.

Second, the amount they lose is not made up in licensing the games. Microsoft's quarterlies show this is dramatic: their entertainment division was making a tidy profit until the XBox launched. I can't remember how many millions it lost last quarter but it was significant. Worse than the Newton was for Apple, but Microsoft is a rich monopolist so they can take it.

First I must clarify...when the Xbox came out MS was losing around 100 per unit....now it should be a little more obviously because the price has dropped from 300-179....though I'm sure the production cost has dropped somewhat since then as well....secondly my friend's parents are MS shareholders so I might have to check with them about the quarterlies, but are you sure their losses in the entertainment division weren't just redirected from other divisions like windows where there should be an expected drop due to IBM switching to linux on it's business machines? Also I think you mean to say that the amount they make is not in licensing games, but that's simply untrue (unless you didn't make a typo). Any video game company makes it's money on the licensing of games to run on it's machines. Each game company pays the company licensing fees to be able to sell games for certain players, the only ones that don't are the companies who own the players. For example, Rockstar games wants to sell GTA Vice City on the Xbox, they have to pay MS to be able to produce and sell GTA for the Xbox. That's where the money is made for MS. Their other revenue comes from producing their own games. Now I guess it is possible that MS is losing money on the Xbox this quarter, but that doesn't mean that MS hasn't made money on the Xbox already...I wasn't simply speaking about this particular quarter...in any case you may be right, there has been a drop off in recent sales but in general that's how things work, not to say that you don't know....Now, I don't know where Sony and Nintendo came in but I never mentioned them. However the company losing the most money is probably Nintendo (only in the home console market)....unless there's a sale I probably sell 4 or 5 Xboxen(?) and PS2s for every GameCube...and they're even $99 now!