Apple and RealNetworks Alliance?

[MacBytes]

Category: News and Press Releases
Link: RealNetworks Seeks Musical Alliance With Apple (http://www.macbytes.com/link.php?sid=20040415094025)
Posted on MacBytes.com (http://www.macbytes.com)

Approved by Mudbug

[irmongoose]

Ha ha! This RealNetworks guy is like a modern enterprise version of Commodore Perry!

"Yes, we come on friendly terms, and we want to have a good relationship with you. Why are you so afraid of opening up? You have something we want, and we can give you something you need. But beware, if you don't agree with us, we will be forced to take up violent means to resolve the matter."

I give this guy a thumbs down. Who the hell does he think he is? Threatening Apple is not how you do business with Steve. Even I know that! Stupid guy...




irmongoose

[MacRumors]

The New York Times reports (http://www.nytimes.com/2004/04/15/business/media/15real.html) on efforts by RealNetworks to partner with Apple.

According to the newspaper, an offer was made from RealNetwork's Rob Glaser to Steve Jobs to consider licensing Fairplay -- Apple's Digital Rights Management system -- to RealNetworks to allow compatibility of RealNetwork's music store with the Apple iPod. In exchange, RealNetworks would reportedly make the iPod the primary MP3 player for their music service.

Glaser is reportedly meeting with Apple this week, and is considering WMA as their other alternative if Apple does not accept the offer.

[agreenster]

This is pretty suprising news. I guess it just proves that Apple is THE powerhouse to contend with in the MP3/online music store market.

[gandalf55]

wow. Real mustbe hurting bad. and ya - this would be bad for M$. I don't care about M$ though - I always want whats best for us and for Apple.

[Ling]

Would Real be using AAC for their audio too, then? Or just the DRM system on top of the RealAudio format?

[Niknar]

If this happens this sounds like it would be great for Apple. I hope it works :)

[onemoof]

I think it would be a very good idea for Apple to open up its FairPlay technology. Clearly they would have a huge advantage if companies start jumping to Apple's format and Apple controls the entire music encryption industry. It would boost iPod sales, QuickTime distribution, and would strongly weaken Windows Media. Apple would be stupid not to aggressively seek to license its technology.

[Trimix]

on one hand i would like apple to tell him to f... off (which steve in his wisdom surely will do) on the other hand i see a huge potential and am afraid of isolationism. has happened to the mac before, don't want it to happen to the whole music story here too. so yeah, take him up on it steve, your enemy's enemy should be your friend

[onemoof]

Would Real be using AAC for their audio too, then? Or just the DRM system on top of the RealAudio format?

The article says Real currently uses/plans to use AAC for their music store.

[gekko513]

I think Apple should take the offer. Oh, and I own 8 Apple stocks so they'd better listen to my advice ;)

[Nny]

Read this on CNet's News.com earlier today.... letter reads more like a threat than an "offer." Maybe they wanted to send Jobs an "offer he couldn't refuse."

from article: "But if an alliance with Apple could not be struck, Glaser strongly hinted in the e-mail message that he might be forced to form a partnership with Microsoft to pursue "very interesting opportunities" because support for Microsoft's media-playing software seems to be growing."

[arn]

Read this on CNet's News.com earlier today.... letter reads more like a threat than an "offer." Maybe they wanted to send Jobs an "offer he couldn't refuse."

from article: "But if an alliance with Apple could not be struck, Glaser strongly hinted in the e-mail message that he might be forced to form a partnership with Microsoft to pursue "very interesting opportunities" because support for Microsoft's media-playing software seems to be growing."

either way, if Apple's goal is to sell as many ipods as it can... seems this would help.

arn

[sparky76]

The article seems to think Apple will say no. If it is true that the iTMS is only there to sell iPods, this makes no sense. But, if Apple think they can make real money from the iTMS long term (by becoming the de facto standard and then squeezing a better deal from the record companies) then freezing out Real would seem to be the right thing to do.

Apple should be careful not to freeze out a company who could help them sell iPods. If they do turn down Real's offer, we should ask the real (no pun intended) reason - long term music download sales?

[IndyGopher]

Try as I might, all I can see in this is a desperate plea from Real to get Apple to save them... if Real partners with Microsoft, Real will just disappear... And Glaser, being an ex-Microsoft person has to know this.
That being said, I would be happy to see Real and Apple play nice together.. they can start by switching to Quicktime.. or at least allowing Quicktime to play Real streams. That clotted chunk of afterbirth that they try to pass off as Real Player for the Mac is an embarrassment.

[uv23]

I would much rather see Real crash and burn, fading into oblivion, than I would see them partnering with Apple. I hated them when I used a PC and I still hate them now.

[onemoof]

Real says it will use AAC with FairPlay DRM

Real says it will promote the iPod as the default standard music player.

This is a VERY good deal for Apple if they want to promote iPods and their own technology. They may lose a few music sales but those are not profitable anyway so who cares, they might get more iPod sales as a result.

Oh and if you own less than a few million shares of Apple's stock they won't care about you.

[PlaceofDis]

ill be disappointed in apple if they dont take Real up on this offer, why? because then the Fairplay AAC standard is going to become isolated to iTunes only and the iPod, and in turn all that this will do is cause apple to lose money in the long run. By licensing the Fairplay AAC to Real, apple has a chance to sell more iPods (since its currently the only player that can play protected AAC) and apple also gets to take a step ahead with their music format against wma which just sux.....

[Longey Nowze]

I don't think it's a bad idea, if Real's music store only worked with the iPod, and Real paid a royalty for every song sold, then this would be good for apple, wouldn't it?

I do think however, that Real is desperate and they want to work with Apple, they threat to go with M$ just shows how desperate they are, not long ago they were attacking M$.

[dukemeiser]

It's win-win for Apple. They get royalties on FairPlay, and they sell more iPods. And they kick M$ between the legs. :D

[dukemeiser]

Guess we'll see if Apple is true to it's word. If iTMS really doesn't make any money, and is just for selling iPods, then Apple should take this deal hands down.

[Shirky]

This is what happens when you try and compete with the "Microsoft of Music Stores" ...

[Steven1621]

wasn't that glaser fellow the guy who said apple's dominance of online music was coming to an end?

[jbembe]

Try as I might, all I can see in this is a desperate plea from Real to get Apple to save them... if Real partners with Microsoft, Real will just disappear... And Glaser, being an ex-Microsoft person has to know this.
That being said, I would be happy to see Real and Apple play nice together.. they can start by switching to Quicktime.. or at least allowing Quicktime to play Real streams. That clotted chunk of afterbirth that they try to pass off as Real Player for the Mac is an embarrassment.


I simply ignore any and every site that requires realplayer - I refuse to even have the program on my machine.

[BornAgainMac]

Also I think Real should use FairPlay and promote iPods.

They can promote video streaming content on quicktime as part of the deal and drop their video format. Apple should also get Quicktime support for Linux. Perhaps Real can still offer a front-end player for the Quicktime format so they can still do that spyware stuff, perhaps offer full screen support for users that don't want to buy Quicktime pro.

[macridah]

I vote "yes" apple should license DRM to Real.

Like apple said, itunesmusic store is not that profitable, it's the iPods. So let Real sell some music, as long as they make iPod the perfered music player.

More iPod sales, more profit, happier stock holder :D

[Hemingray]

Wow... I'm surprised. I dunno whether to be happy or sad about this (I'm thinking happy...?) On the one hand, I dislike Real. On the other hand, this would definitely benefit both parties... aw heck, why not. :)

[alirio]

If Apple doesn't get Real to use FairPlay AAC's, we can kiss that format goodbye. We need more content providers to offer AAC's or WMA will be the VHS of the 21st century.

AAC is better and more open than WMA, but will die if 90% of content providers don't offer it.

[geerlingguy]

I would think the alliance would be a good thing. iTMS is meant to support iPod sales, and if Apple can get more stores to use FairPlay and work with iPod, iPod will sell even more. I, for one, know two people who bought a different player because they wanted to 'leave their options open' for what online store to ally with... And if Real makes a Mac compatible good player, that could be another good thing (make Macs seem better for other services, too).

The only thing I wonder right now is, what if a service goes down? What happens to all the purchased music? If Apple stopped the iTMS, what would happen to all the 50+ songs I've purchased? Would Apple just set up a server to 'authorize' new computers in the future? Would Apple let me deauthorize the songs so that I can use them with other computers/software? I stick with iTMS because I think it will at least be one of the dominant stores, if not the best.

[dernhelm]

Apple doesn't really care if they sell a million songs from iTMS, or Real sells them, as long as they lock you into the iPod, and no one else's music player. I think Apple has been waiting for these other stores to start lining up to license FairPlay. They'd better have something really big up their sleeve if they can't find a way to make this work.

The only major turn off is Glaser's "or else" attitude. I mean, you must be kidding, right? Oh no! You might line up with M$ instead? It's not like they'd have a ton of other choices, anyway, or that Apple would be drastically affected by that.

Now is the time for Apple to put a stranglehold on the music player market. How long will it continue that the iPod is seen as the best player out there? Apple needs to be in the position where it just won't matter if their player is or isn't the best, because the only viable music stores won't support anything else.

[macFanDave]

of strength.

I hope Jobs will at least talk to Glaser, but he could really be inflexible as far as terms are concerned. If you look at Apple's earnings statement yesterday, it was iPods that were the revenue star and not the iTunes Music Store. iTMS is basically a service to promote iPods and really doesn't make a significant amount of money (it may even lose a little). Now if Glaser wants to provide an alternative to iTMS that gives potential iPod customers the "perception" of choice of compatible services, that would be fine. Jobs can afford to be really dictatorial about way Real would be able to use FairPlay, so he won't get hoodwinked like he did by MicroShaft.

Licensing from a position of weakness can be disastrous. Amelio's clone program allowed Motorola, Power Computing, et al. to cannibalize Apple's already-weak Mac market in direct violation of the agreement. Yet, in it's weakness, Apple wasn't in a position to make the agreement have any teeth. In contrast, Jobs could offer a deal to Real that would be watertight and highly favorable to Apple. Let's hope he does that.

[dcsmith77]

this is a brilliant move by apple. with the court ruling in europe placing real in an excellent position to compete against the vole's monopoly advantaged music store. If apple plays it smart between the ipod and the industry supported music store they might be able to wrestle one industry away from the lethal game of microsoft catchup

[CrackedButter]

I simply ignore any and every site that requires realplayer - I refuse to even have the program on my machine.

Mplayer takes care of rm or ra files anyway thankfully.

[Lancetx]

If I was Steve Jobs, I would only do this if Real gave me something of value in return. Like full use of the Real Player code so that the QuickTime player can play all Real content. Otherwise, no way. At this point Real needs Apple worse than Apple needs Real...unless there is something good in it for Apple besides just money. This isn't like the HP deal where their exposure alone was worth doing it.

[jimthorn]

Though there would be advantages to the deal, I'm just not seeing it happening. (Of course, I never would have believed Apple would make HP-branded iPods either).

[beg_ne]

I'm glad Real is approaching Apple, however I wish they would do it without the lame threats to goto MS.

Really Mr. Glaser, how long do you think your company will survive if you partner with MS? Haven't you been paying any attention to how MS treats them over the years?

And before you come to Apple with all these demands how about you show some respect to us Mac users? Like not taking 6 months to a year to release Real 10, oh and please don't make Real 10 suck like it does on the PC, or as an alternative you can let apple incorporate your real media codecs right into Quicktime.

[Trowaman]

Steve-O, DO THIS!!!

You said before you make no money from the music store, it's in iPods and if the iPod is laft as iTunes only it coulds hurt u in the long run. Charge them 5 cents for each song for using your AAC fun and that's it. YOu open up the real money maker, which is the iPod. GO FOR THIS!!!

[Don't panic]

please do it
please do it
please do it
please do it
please do it
please do it
please do it
please do it
please do it

[sinisterdesign]

i've never liked Real, the audio sounds like it's coming out of a tin can & their players are always buggy on a Mac, but they have been around a long time & have quite a install base.

if Fairplay & AAC really ARE that good, don't screw us w/ a policy of isolationism. i adore my iPod & carry it w/ me everywhere, but i'm not stupid, there are PC music players that are surpassing the iPod w/ features & price. no one is going to care if AAC sounds better than MP3/WMA & the iPod is easier to navigate if Apple paints themselves into this holier-than-thou corner, "you must use our player, our store, our format". let's get into new venues (Real) and become THE standard. then wow us w/ a new iPod, THEN you can take that 'holier-than-thou' attitude...

[matthew24]

One reason for switching from Windows to Apple for me was MS abusing its propriety formats, if Apple starts doing the same I would really be ashamed. :mad: Apple should stay loyal to only supporting open standards, including fairplay. Steve you could spoil a lot of goodwill!!

[mhar4]

Yuk. Real is the Church of Scientology of software companies. I hope Apple stays away.

[SiliconAddict]

Jobs needs for one second in his life to stop being an idealist. Anyone would be an idiot not to take Real up on this offer. Even though I don't expect Real to be a major player in the Music Store arena every little bit helps. HP's hPod and Real support would be a good start beyond that I would like to see more cross device support for AAC.

[SiliconAddict]

Yuk. Real is the Church of Scientology of software companies. I hope Apple stays away.

God I despise comments like this.
Pepsi sucks. Stay away from them.
McDonald's sucks. Don't do business with them.
Nike sucks. How could Apple do business with them?
Now Real.
Better be careful or the only company Apple will be allowed to team up with is some adult toy shop down in LA.

Grow a pair and realize this IS FREAKING BUSINESS. If Apple want to survive the coming tidal wave of music related products and services they NEED to complete and just because Apple owns 70% of the market for its music store and 30% for music players doesn't mean that can't change.

Realize one and ONLY one thing. This market is about to get a 1000 lbs gorilla tossed into the ring when Microsoft decides to release their music store. Guess what 60 billion with a capital B and a 95% market share will buy MS when it comes to negotiating with the RIAA? Anything it wants. Apple needs allies like HP and they need support from companies like Real. Take your ideals somewhere else because they have no place in the business world.

[beg_ne]

Here's how the deal SHOULD go down, lets hope in reality it turns out this well.

1. Real gets a license for Fairplay and uses iPod compatible files for their store (Win for Real, maybe they get more than 50 downloads a week unlike all the other music stores)

2. Real makes iPod it's player of choice (Plus for Apple, more iPod sales from uhm...PC users who really like real player and want an iPod?..)

3. Real gives Apple full access to all their codecs AS THEY BECOME AVAILABLE, Apple can integrate them into Quicktime, and hell can probably improve them for Real. (Win for both, Apple can give it's customers support for real content that is up to date and in a player that doesn't suck, in return, much like how Safari enhancements make it back to Konquerer Apple can make the codecs suck less and Real can pass the goodness onto their Windoze users with Real Player)

4. Apple can add a link to the default bookmarks in Safari to Reals music store for those Mac users who dont know about/dont want to use iTMS(?) (Win for Real)

[dombi]

I wanna see this happen. Apple needs the alliance in the long run.

[micropop]

I never even knew Real had a music store. I've never heard of it. I suspect I'm not in the minority here.

[0 and A ai]

if real dissapears i coulnd't care less. their software blows.

There is no point for apple to seek this partnership there is no gain. iPod comes bundled itunes.

[ingenious]

I think it would be a very good idea for Apple to open up its FairPlay technology. Clearly they would have a huge advantage if companies start jumping to Apple's format and Apple controls the entire music encryption industry. It would boost iPod sales, QuickTime distribution, and would strongly weaken Windows Media. Apple would be stupid not to aggressively seek to license its technology.


i agree....besides i thot apple was all for open source now anyway? :D

[joemama]

Realize one and ONLY one thing. This market is about to get a 1000 lbs gorilla tossed into the ring when Microsoft decides to release their music store. Guess what 60 billion with a capital B and a 95% market share will buy MS when it comes to negotiating with the RIAA? Anything it wants. Apple needs allies like HP and they need support from companies like Real. Take your ideals somewhere else because they have no place in the business world.

I agree. Once MS is in the game Apple will lose a MAJOR part of it's audience. MS will not care if they take an early loss to attract customers. (Look at the X-Box, now a major player in the gaming market).

Apple cannot afford to act like the elitists they have in the past, counting on sales solely because they think "their product is better." Peope don't care about quality as much as accessibility. What worries me is Apple banking on just iPod hardware sales. At some point, hardware demand will subside - but people will still want new music.

Remember this, MS made most of its early profits from SOFTWARE sales alone. Apple should really look at their past screwups before making any decisions.

If they do partner with Real, Apple must force them to be compatible with Quicktime streaming...plain and simple. And this could be the selling point so Real does not go with MS because MS would for sure FORCE Real to use WMP code, thus destroying Real completely, and I don't think Glaser wants this.

Real will come around.

[yamabushi]

It would be a huge mistake to pass up this opportunity. Competition is unavoidable, so you may as well have it on your own terms.

It would also be a serious mistake to allow aggresive negotiation tactics to bother you enough to kill the deal. They are just being direct and perhaps even sincere. Besides, even if they didn't explicitly say they were considering going with Microsoft it would make sense to assume that this was a possibility.

[Foocha]

Like all the best deals, this is a non zero sum - both parties get something.

If Apple wants to beat Microsoft, they're going to have to become more like Microsoft - getting used to licensing their technologies to 3rd parties is just par for the course.

As always, the devil is in the detail - Apple should push hard for as much free advertising as possible for iPod on Real.

[eSnow]

They have always tried to go alone even if this came back to bite them. They are so convinced they can dominate this market they are going to lock Real out which will only enforce their image as a closed platform.

There is a reason the Real guy is leaking this email to the press...

[beg_ne]

Oh and I forgot the biggest plus for Real on my list.

5. Real partners with an honorable company that won't betray them and put them out of business 6 months later. (Massive plus for Real)

[sinisterdesign]

Realize one and ONLY one thing. This market is about to get a 1000 lbs gorilla tossed into the ring when Microsoft decides to release their music store. Guess what 60 billion with a capital B and a 95% market share will buy MS when it comes to negotiating with the RIAA? Anything it wants. Apple needs allies like HP and they need support from companies like Real. Take your ideals somewhere else because they have no place in the business world.

thank you. we have great hardware (although lagging a little right now) and an excellent OS and where has that gotten us? 2% market share? you guys can whine that we don't CARE what market share we have, but then you bitch & moan that your favorite game comes out a year late for the Mac? it's business & whether or not Real currently sucks, Apple is looking long term to decide whether or not this will help us stay on top of the music download biz.

do you think M$ got as large & influential as they are by staying true to their beliefs? they partnered with/bought out anyone that could possibly benefit them in whatever niche market they were looking to overtake at the time. if Apple blinks, this legal music market will just as quickly shift out of their favor.

who would have thought 10 years ago that IBM would be the one responsible for keeping Apple on the cutting edge? big business often has strange bedfellows & i think Apple needs to be a cheap french whore right now to entrench themselves in this market.

[wrldwzrd89]

I simply ignore any and every site that requires realplayer - I refuse to even have the program on my machine.
Same here! I would love to see Real and Apple on good terms; this would mean more iPod sales for Apple (good), no more lousy RealPlayer program (very good), licensing revenue from FairPlay (good also), and a blow to WMA (EXTREMELY GOOD). The only bad side of this is there would be one less media competitor in the market (but some see this as a good thing).

[Trowaman]

I simply ignore any and every site that requires realplayer - I refuse to even have the program on my machine.

I usually don't use Real but I recently found the Liberal radio network and it streams via Real. So, it is now useful to me. . . for a first.

[vanmonkey]

Same here! I would love to see Real and Apple on good terms; this would mean more iPod sales for Apple (good), no more lousy RealPlayer program (very good), licensing revenue from FairPlay (good also), and a blow to WMA (EXTREMELY GOOD). The only bad side of this is there would be one less media competitor in the market (but some see this as a good thing).

Media competitor? Usually competition is good, it drives down prices, but all of these players are free! less competition in so far as media players is better in a free player market. I means one simple, free solution. I like that.

[wrldwzrd89]

Media competitor? Usually competition is good, it drives down prices, but all of these players are free! less competition in so far as media players is better in a free player market. I means one simple, free solution. I like that.
Like I said, there are reasons to see the disappearance of RealMedia should this deal go through as good or bad. You've pointed out a good side - one that makes sense.

[MorganX]

Believe it or not, I think licensing Fairplay to Real can't benefit Apple. I don't see it. The service would only be good to iPod users. People who own iPods are not going to use Real software when they have iTunes, so what's the point? For Real to steal music sales from Apple?

Purchasing and Renting music and videos is about to take off, only those who can sell hardware to receive the content, content creators, and sellers of software and services to deliver it are going to make money. I don't see this as anything except Real trying to get a seat on Apple's lifeboat, and there's really no room for one more.

[Le Big Mac]

wow. Real mustbe hurting bad. and ya - this would be bad for M$. I don't care about M$ though - I always want whats best for us and for Apple.

No kidding. It's a really weird threat, too, since Real wants to compete with Media Player, and even got the EU to open up the media player market. So now real will simply go with the MS solution and be done? Maybe Real can join Netscape (who?) as part of the AOL family.
:rolleyes:

[Bendit]

I think Apple will go ahed with this, if not with Real then another company.

Apple is just doing the music store to support the sale of iPods. Wouldn't you think they'd love to offload the task of marketing the iPod to Real? They wouldn't have to do anything and they would sell more iPods.

Worst thing that could is iTunes music store would lose sales but Apple isn't making a profit on that anyway!

Go for it Apple! AAC needs more acceptance.

[MoparShaha]

This is a crossroads. Apple can either go down its historical path an remain closed, or it can open up and propser. I surely hope Apple has learned its lesson and accepts this offer.

[snahabed]

with those who say that, in return, Real should open up all of their codecs to Apple. Why should we further hammer a nail in Quicktime's coffin? Why should we allow Real to play every type of file under the sun?

Apple would probably make the codecs 100 times better. Hell, if they want to create a truly strategic anti-WMP merger, they could combine the programs into RealTime :)

[mrsebastian]

obviously real is hurting and "threatening" apple that they may have to go with m$, is no way to conduct business. that said, i also think it's great for apple, because not only will apple get more mainstream exposure, but they will also be able to get just about anything they want from the deal.

[Krrill]

You know, no one has talked about the real media format being used on iPods... People may scoff at this because it's "A weak format" but whatever, who gives a crap... This could be the push RealMedia has been looking for to have their files play in a MP3 player. Now, I'm speculating a lot, and please for the love of god don't bitch at me for this, just hypothesizing.

Now, I know this is a rumor site, so..... There was talk about how the new iPods would get a colour screen and have some sort of video out (Look for the post, can't remember where it was at). This may just be a big crock o sh**, but if so, real could use this to put out it's own formats etc into the iPod, yes yes Mpeg rocks etc etc... Buuuuut, there are a lot of things out there that still use the RealMedia codec, and having the iPod to allow them to move this codec around etc will boost sales, while at the same time having the AAC as well.

I know this is a lot of speculation, but even having the stupid RM codec able to play through iTunes and the iPod it will give a bigger user base to Apple. I can't see anything better then this... This would slowly faze out the Real Player giving over to iTunes the user base, and allowing for people to "Switch to Apple".

If Apple fails to strike the agreement with RM we have passed up a big opportunity to increase Apple's user base. Go for it Apple! With you all the way!

[ktrout]

on one hand i would like apple to tell him to f... off (which steve in his wisdom surely will do) on the other hand i see a huge potential and am afraid of isolationism. has happened to the mac before, don't want it to happen to the whole music story here too. so yeah, take him up on it steve, your enemy's enemy should be your friend

Or perhaps Apple could simply buy Real. Your enemy's enemy should be your employee.

It would be nice to see all those Real-requiring sites become Quicktime-friendly.

[stingerman]

It's probably that REAL is in a pickle and will have to do a deal with either MSFT or AAPL, but they would rather deal with Apple. There is nothing wrong with REAL being upfront and honest about this. The only problem is that REAL can already use Fairplay, but it requires that they bundle Quicktime. It is Quicktime that actually handles the actual playing of the track, Fairplay and all. Apple already allows third parties to license Quicktime. So what Real is asking for is more than just a license. They evidently want Fairplay separate from Quicktime. iTunes is more than just a Trojan Horse for iPod, it is also for Quicktime and I think any deal with real would have to include Quicktime over Real's own player.

That is why it is going to be such a hard deal.

[singletrack]

Most PC users I know seem to dislike Quicktime as much as Mac users dislike Windows Media Player for being slow and inefficient. If Apple added the Real codecs into Quicktime I can only see even less reason for PC users to create quicktime content. That would be a bad thing for Apple.

On the other hand, if Apple managed to persuade Real to drop their proprietary codecs and produce content in a quicktime compatible format - eg. mpeg4 and aac instead of rm/ra as part of this deal then that would be reason enough and there would be a load more quicktime compatible content out there on the web.

For example, the BBC stream their content in Windows Media or Real. If Real used an open standard instead of their own then I'd be able to watch/listen to the BBC's content with a player that didn't suck. It's particularly annoying when the BBC show their 'Click Online' computer show and it's about Macs but you can't actually watch it on a Mac.

Windows user wouldn't have to use the Quicktime player for Quicktime content either so they'd be happy and more content providers wouldn't be so arsey about providing cross platform content. Real's strength has been in it's software for producing content, not necessarily viewing it.

If Apple rebuffed Real, the only outcome I see is Real dying or being absorbed into Microsoft but it'd be better to have one of your competitors, even Real, close to you than to strengthen the beast.

[ITR 81]

Apple should take this offer and run with it.

What would be nice is if Real could also use QT content and QT could use Real content.

If this deal happens I think Apple needs also license Fairplay out to many of the car and portable CD player manufactures as well.

Apple then should buyout Napster and put the cat to sleep for good.

[goMac]

They're already open source via Real's Helix project.... Apple doesn't need any permission to use them.. It would be pointless to make a trade for them.

[usarioclave]

The only company that licensed its IP and succeeded on any kind of scale is...who?

Everyone in the valley thinks that they can emulate what happened with Microsoft and IBM. But every time a company tries to do that it fails. Look at Palm - its attempt at splitting its hardware and software failed miserably, and probably cost it hundreds of millions.

The cellphone OS makers are profitable, but marginal. Likewise the embedded OS manufacturers.

The fact is, you make the big bucks on hardware. To get hardware that works well, you write the software. Microsoft is the exception that proves the rule.

If anyone knows of a large company besides Microsoft that does things by licensing, then speak up. I can't think of any.

Glaser's letter is so full of this crap it's ridiculous. He's pushing this licensing/proprietary FUD because his company is getting beaten to death in the market. Go ahead, real, partner with MS - if they let you. Then get eaten alive, but more slowly than if you went it alone.

[blabla]

of strength.

Licensing from a position of weakness can be disastrous. Amelio's clone program allowed Motorola, Power Computing, et al. to cannibalize Apple's already-weak Mac market in direct violation of the agreement. Yet, in it's weakness, Apple wasn't in a position to make the agreement have any teeth. In contrast, Jobs could offer a deal to Real that would be watertight and highly favorable to Apple. Let's hope he does that.

It wasnt Ameilo's initiative to start the clone program, but the previous CEO Micheal Spindler.

[Windowlicker]

I simply ignore any and every site that requires realplayer - I refuse to even have the program on my machine.

the only thing i use the app for is watching south park.. even there mpeg4 (quicktime) or something would kick ass.

[davecuse]

Would a partnership mean that when i install 10.4 (someday) 213,890,218,481,324,097,321 trial offers would show up on my desktop kind of like the RealPlayer does? But seriously folks, this be great or horrible depending on the implementation. I don't think Real would be too excited to drop the .ra or .ram format.. Although if they did it would be cool, maybe we'd be able to have more radio streams through iTunes?

[xtbfx]

I usually don't use Real but I recently found the Liberal radio network and it streams via Real.

Aren't they out of money? They got pulled from LA & Chicago (pretty funny).

Anyway, I think Apple & Real should team up or Apple should buy Real.

[starboard]

Rob Glaser thinks his treat of going WMP route gives him an edge, but truth is Real needs Apple's Fairplay more than Apple needs Real. Apple is selling more iPods than ever, and iTMS is doing very well. It's unclear if partnering with real will boost iPod sales, but its clear that with Fairplay Real will benefit by being open to the iPod market.

[RogerQ]

Do we really think that anybody considering buying an iPod will say, "Gosh, it's darn cool, but it doesn't work with the RealNetworks music store. Guess I'll buy a brick-sized Nomad?"

And when/if MS does come out with its competing initiative, that anyone would say, "Well, sure, MS is using every possible tool in their monopoly handbook to force me to use their music store (and it doesn't suck THAT bad), but since Real supports the iPod, I better pick iPod?"

Even if ONLY ONE music store on the planet supported iPod and no one else did (the current situation), why would anyone care? Why would it stop someone from buying an iPod? Has it?

(Yes, I saw the earlier post about a couple of folks who chose a lesser product because they wanted to "keep their options open." I told Kate Beckinsale the same thing when she asked to sleep with me.)

Presuming that legally downloaded music is a significant factor in determining a player purchase (is it?), a single store is a problem ONLY if it doesn't have the songs you want. As always, content drives hardware (and why Sony is the real danger).

Thus...

If M$ is able to extort significant (meaning stuff people care about, not #s) exclusive content for its store, having Real or a hundred other partners won't save Apple. People will by M$ because Britney's "Only in WMA!!!" Conversely, if Real could provide Apple with significant iPod-exclusive content (do they have any?), then it may be worth partnering.

SJ is betting (perhaps because he knows the record company sitch better than we do) that other services won't be able to offer enough exclusive content to make a "closed" iPod a liability.

And if so, then he'll rightly leave Mr. Glaser (who's been SO complimentary of late) to twist in the wind. (And really now, does anyone believe that Glaser is "surprised" by this leak? Is this any different from the tactic that the Comcast guy tried with Disney?)

Thoughts? Where have I gone off track?

(P.S. To those that think M$ will walk all over the RIAA in negotiations: Can you please explain what MS has to offer? Marketshare means zip. All stores are available for Windows; unless M$ cripples them (illegal) there's no increase in penetration. The big $$$? Record companies got fat giving artists $$$ in the short term and screwing them in the long term. I doubt they'll fall for the same tactic from M$. Which leaves M$ trying to buy record companies--the Bungie trick. And if so, a million partners won't help Apple)

[phasornc]

Anyone who doesn't think Apple should license Fairplay is either
1) in HighSchool
or
2) incapable of forming short term memories

Apple is currently the record company darling since the record companies don't want to be bossed around by Bill Gates. But, they neither want to be bossed around by Steve Jobs. If Apple doesn't license, the Bill Gates is the lesser of two evils. Bill just wants your money, while Steve wants you to love, worship and fear him.

If Apple doesn't license Fairplay this is what will happen. Windows Media player will improve, new generations of .wma players will improve, the iPod will improve more slowly, and the iPod will be the betamax of the music world.

In a perfect world don't you just want every device that plays music to simply play AAC/Fairplay files. I don't care who makes the device I just want to know that any music that I carry on any memory device can be played on any playback device. I remeber the days when we had these things called CDs and you could take them to your friends houses and they just worked. You didn't even have to register/enable/authorize their stereo to make it work. It used to be great. I hope someday AACs will be the same way.

[nsb3000]

Rob Glaser thinks his treat of going WMP route gives him an edge, but truth is Real needs Apple's Fairplay more than Apple needs Real. Apple is selling more iPods than ever, and iTMS is doing very well. It's unclear if partnering with real will boost iPod sales, but its clear that with Fairplay Real will benefit by being open to the iPod market.

There is no good reason Apple should reject this offer. A format is not going to succeed is apple is the only one making it...Think off when Sony invented the compact disk way back in the 1980s. Imagine if they had insisted that they be the only ones to sell CD, hoping to become the world number one music distruster. The CD would have failed. Apple is the same situation. They should open up the ipod, because that is what make the most business sense. I just don't see why Steve doesn’t get it.

Further, I expect Apple will respond to this, probably today or tomorrow. It is one thing when the Mac Rumor community speculates about upcoming products and alliances, quite another when you are Blindsided by the New York Times, the most influential News source in the United States. I am sure the Apple PR people are scrambling.

[blueflame]

I feel odd about this, I think that the iTMS needs to be a future for apple. Hardware is something more of a trend, in a few year personal music devices may not sell well for anyone
on the other hand, Music stores are here for a LONG time. digital distribution is the future. I think its good for apple in the short term to sell more ipods, but in the long term, i think they need a microsoft size monopoly in the music store arena. I dont think by making other stores better they will do that, but i do agree that they need to make AAC the standard
Andreas

[macFanDave]

Aren't they out of money? They got pulled from LA & Chicago (pretty funny).


No, the truth is that they are having a dispute with the owner of the radio stations in LA and Chicago. I'm sure they have enough money to stay on until at least November.

Meanwhile, go suck on your hate radio (Michael Savage makes Rush Limbaugh look reasonable and moderate. He's a ********ng embarrassment.)

[jesuscandle]

Guess we'll see if Apple is true to it's word. If iTMS really doesn't make any money, and is just for selling iPods, then Apple should take this deal hands down.

Not necessarily.

If ITMS isn't supposed to make money (future) then I think you have to believe that none of the other mamajamma's (that's music stores to the lay people) will make any money either.

As I can see, ITMS is the ONLY service that can survive not making any money, as it's goal wouldn't be to make money. (Tautological, don't you know.)

Let Real and MusicMatch and Microsoft wither on the vine. Then ITMS will be the only one left. Why help out Real if you think that they're never going to make any money and be killed off in a matter of months?

The ONLY competitor I could see who might stand a chance 2 years from now is Sony. (as they'll be selling players, too) But everything I've read suggests they'll only be selling Sony music. That would have been a bad idea when the labels meant something and it's a terrible idea now.

[Hiroshige]

I think it would be a very good idea for Apple to open up its FairPlay technology. Clearly they would have a huge advantage if companies start jumping to Apple's format and Apple controls the entire music encryption industry. It would boost iPod sales, QuickTime distribution, and would strongly weaken Windows Media. Apple would be stupid not to aggressively seek to license its technology.

My understanding, which could be flawed, is that with the Mac in the 1980s Apple made the mistake of not licensing its technology. When it did finally license the technology in the 1990s the market had changed and it was a mistake at that time.

Now Apple is in a position to license the FairPlay and associated technology, take a big step towards making Apple technology the standard for the digital music industry, and then sitting back and getting a % of everybody else's efforts. I hope Apple takes this opportunity.

[davecuse]

Does anyone else think that RealPlayer is a piece of crap? I thought Steve was all about killer apps, I sort of don't see this fitting into his game plan. And on top of Real having a crappy player, part of their offer is a threat. I don't really see that threat as too scary.

I would like to see AAC opened up, but not with Real, and not under these terms.

[mechamac]

Isn't Real media pretty big in Asia? Bigger than QT, anyway? Seems like more than half the Asian media sites I go to use Real. With Real in Apple's pocket, the iTMS (and thus iPods, Macs, etc.) could get a nice push in the Asian market. Or, if not, Apple at least has licensing money from Real for trying, while Real does the leg work.

[leftbanke7]

Believe it or not, I think licensing Fairplay to Real can't benefit Apple. I don't see it. The service would only be good to iPod users. People who own iPods are not going to use Real software when they have iTunes, so what's the point? For Real to steal music sales from Apple?

Real would probably get some of iTunes music sales however, the fat checks Apple would get from Real for licensing rights would more than make up for that.

So essentually it seems, to me anyway, that Apple would be getting paid for helping Real not become yet another branch of Bill Gates Inc.

Hmmmm, sounds like a decent enough proposition to me.

[winmacguy]

either way, if Apple's goal is to sell as many ipods as it can... seems this would help.

arn

Apple's problem is not in selling enough iPods..... it is in manufacture, they cant get them from the manufacturer fast enough to meet the demand. If Apple could have an iPod on every shop shelf of ALL of their sellers and resellers everytime a customer wanted to buy one instead of selling out all the time they would probably have sold twice the amount of iPods in the first quarter.

When HP starts selling hPods though their 107,000 outlets world wide ( they have started selling PCs with iTunes as mentioned in the conference call, virtually everybody who buys a HP PC will be directed towards iTunes and iPods. With 40% of the PC market that is a bigger chunk of the customer pie than Real Networks.

[MacSlut]

The market cap of Real Networks is 1.12B. Apple has 4 times that amount in cash reserves *and* zero debt.

Apple should purchase Real Networks.

RealMedia servers should be rebranded as iTunes Media Servers and given away for free.

The RealPlayer should be killed with the functionality incorporated into iTunes. Recordability of allowed streams (complete with scheduling) should be allowed so content can be played anytime or downloaded to the iPod.

What Apple should *not* do is sign a deal with Real Networks that's based on driving demand to the iPod at the expense of losing iTMS customers.

As storage prices drop dramatically in price as increase dramatically in capacity, the cost of iPods will drop substantially. Just like what happened with Sony Walkmans, you'll end up with razor thin margins...not a business well suited for Apple.

The iPod is totally phenomenal in terms of quality and success in the market, but profit from the iPod will hit a peak and then shrink, while the iTMS could scale upwards into significant amounts of revenue.

[ajb13]

Would Real be using AAC for their audio too, then? Or just the DRM system on top of the RealAudio format?

Both Apple and Real use the AAC codec. I think it would be a good idea for Apple to license it to them. Can we say "iPod's 2nd Quarter Growth 1500%?". HP, Real, .... :)

[ajb13]

The market cap of Real Networks is 1.12B. Apple has 4 times that amount in cash reserves *and* zero debt.

Apple should purchase Real Networks.

RealMedia servers should be rebranded as iTunes Media Servers and given away for free.

The RealPlayer should be killed with the functionality incorporated into iTunes. Recordability of allowed streams (complete with scheduling) should be allowed so content can be played anytime or downloaded to the iPod.

What Apple should *not* do is sign a deal with Real Networks that's based on driving demand to the iPod at the expense of losing iTMS customers.

Okay, this has got to be the best damn idea I have ever heard! Scrap my last post. Come on Apple, buy 'em up!

[evetommy]

Someone mentioned Itunes is the only only musicstore that can afford not to make money. Yet I totally disagree.

For the moment Itunes has a huge advantage combining it with the ever popular Ipod. What happens if others do the same thing and combine it with a hot player? Sony certainly could be capable of that, gone advantage.

Also a music store doesn't have to make money for Microsoft either. Microsoft can afford losing money on a service ( MSFT is actually quite good at it but they've got the time & strength to endure this)... especially if it's competing with an "archrival". I'm pretty sure Microsoft will do whatever it takes to blow Itunes and Ipod out of the water, losing some money in the progress won't loose Bill Gates any sleep.

Even big players like Yahoo! claim their music store would probably not make much money but they need it to attract users and keep their existing members from looking elsewhere.

Licensing to Real and other competitors would probably be a wise move (although I don't love Real's product that much either). Loosing Disney to MSFT is one thing, but Real too could isolate Apple on the music front.

[faintedlife]

I think Apple should. Any marketing for iPod will undermine the competitors, and with Microsoft gearing up its "iPod-killer" they'll need an intense user-base to maintain their dominance. I don't see why not? RealNetworks already isn't the best for music, so if a few thousand users use it and are looking for music players, they have the opportunity to use iPods. More opportunities=more cash. Apple could use a few more strong alliances, and with the makers of RealPlayer and Quicktime allied it could be a huge loss for WMP.

[ingenious]

Not necessarily.

If ITMS isn't supposed to make money (future) then I think you have to believe that none of the other mamajamma's (that's music stores to the lay people) will make any money either.

As I can see, ITMS is the ONLY service that can survive not making any money, as it's goal wouldn't be to make money. (Tautological, don't you know.)

Let Real and MusicMatch and Microsoft wither on the vine. Then ITMS will be the only one left. Why help out Real if you think that they're never going to make any money and be killed off in a matter of months?

The ONLY competitor I could see who might stand a chance 2 years from now is Sony. (as they'll be selling players, too) But everything I've read suggests they'll only be selling Sony music. That would have been a bad idea when the labels meant something and it's a terrible idea now.



i agree. This is probably a likely option for apple. Why not buy out Real? It's going down the tube, but if it teams up with M$, it could turn into a major competitor. We don't want that, even tho iTunes and the iPod are already well known enough for them to be a major consumer product. Even the snob crowd at my school knows what they are. (well, duh, they have all the money!):D

[vitaboy]

I agree. Once MS is in the game Apple will lose a MAJOR part of it's audience. MS will not care if they take an early loss to attract customers. (Look at the X-Box, now a major player in the gaming market).


This is so NOT true. The only thing Microsoft has a monopoly on is desktops and office products.

How many BILLIONS of dollars did Microsoft spend on Xbox? In fact, Xbox is losing billions of dollars A YEAR for Microsoft, and what, Microsoft has a 10% share of the console market??

MSN is losing BILLIONS of dollars a year for Microsoft. An MSN music store will do NOTHING to change the fact, because Apple has the only effective defense against it - music you buy on the MSN music store will not play on the iPod.

iPod's share of the market is increasing, meaning that there is actually less reason for Apple to capitulate and offer concessions.

And in fact, the MSN music store strategy has a high chance of backfiring on Microsoft. How is the competition like Napster and Walmart going to feel that they are basically chained to the WMA licensing scheme, only to have Microsoft come out and offer music themselves? The only thing Microsoft will achieve is make a lot more enemies and once again prove the maxim that doing business with Microsoft means selling your soul lock, stock, and barrel because Microsoft will sweep out the rung from under your feet.

Apple comes out stronger by biding its time, gaining even more marketshare for tunes, and when MSN Music Store unwittingly wipes out the WMA competition by taking what little of the WMA tunes business for itself, WMA will essentially be eliminated as a viable music format.

[ingenious]

I think Apple should. Any marketing for iPod will undermine the competitors, and with Microsoft gearing up its "iPod-killer" they'll need an intense user-base to maintain their dominance. I don't see why not? RealNetworks already isn't the best for music, so if a few thousand users use it and are looking for music players, they have the opportunity to use iPods. More opportunities=more cash. Apple could use a few more strong alliances, and with the makers of RealPlayer and Quicktime allied it could be a huge loss for WMP.

who really uses Real Player tho? I only have it installed so i can use older sites that still use it or places that havent switched to MP3 or WMA. Yes i do have WMP installed on my pb and pc, but on both, iTunes and Quicktime are default and WMP is not.

[ingenious]

Anyone who doesn't think Apple should license Fairplay is either
1) in HighSchool....

hey you're obviously referring to a specific age group of people that includes me. if you'll read my posts below, you'll see that your horrible stereotype is not by any means true. please be careful when you stereotype. besides, arent middle school students (me) the top buyers of the iPod mini? (i dont want a mini, i want a 15 GB iPod)

[RogerQ]

Anyone who doesn't think Apple should license Fairplay is either
1) in HighSchool

Wow, I didn't know I looked that young!

or
2) incapable of forming short term memories

I'm sorry, what were we talking about?


If Apple doesn't license Fairplay this is what will happen. Windows Media player will improve, new generations of .wma players will improve, the iPod will improve more slowly, and the iPod will be the betamax of the music world.

Regardless of whether Apple licences Fairplay, WMP and WMA will try to improve. What about licensing will change the rate of advancement here? AAC is separate (and open) and will presumably be improved by Dolby, et al. Additionally, nothing prevents Apple from using a future open codec and Fairplay.

Regardless of licensing, other companies will try to make a better/cheaper player than iPod. Their success is independent from the DRM situation. How does licensing increase demand for iPods, unless it allows iPod to play more content than it currently can?

(note that this all presumes that legal downloads are the driver for iPod sales, which is a rather iffy assumption)


In a perfect world don't you just want every device that plays music to simply play AAC/Fairplay files. I don't care who makes the device I just want to know that any music that I carry on any memory device can be played on any playback device. I remeber the days when we had these things called CDs and you could take them to your friends houses and they just worked. You didn't even have to register/enable/authorize their stereo to make it work. It used to be great. I hope someday AACs will be the same way.
In a perfect world, I want to be able to hear my music anywhere. I don't care how that's accomplished. Since the iPod is both a memory and a playback device, cross-compatibility of files, DRM, authorization, etc. is irrelevant.

What really matters is finding a place to plug in.

Apple will benefit more from getting iPod docks built into every car than they will from working with Real.

[wPod]

apple MUST go along with this!!! what put apple under the first time? they did not license their software and eventually M$ and IBM took over personal computing b/c they were compatible with anything. right now apple dominates the market of music players. if they license the AAC format then they will maintain their dominance through digital music players. otherwise M$ is going to hit the market with a WMA digital player and apple will end up with its loyal 3% of the computer market. if AAC is licensed to a couple companies and becomes the digital music standard then tons of people will be wanting iPods. and apple will be having an even harder time keeping up with the iPod mini orders!!!

[gekko513]

I think I got it now. This whole thing is actually planned. Real and Apple have already agreed to this deal but to get better press they do it this way instead of just announcing it once.

Now they get a proposal by Real followed by lots of speculation and press coverage which also will increase the interest for Apple's next public appearance followed by Apple making a statement at NAB where they say something about being interested in discussing the deal in more detail. This will of course also have the affect that more press-attention will be directed towards Apple when they release the new iFridge with AAC support at NAB.

Oh and the PowerBooks are actually made from a metal alloy taken from Area 51. The metal slowly melts when exposed to sweat and the metal is slowly taken up in our bloodstream. This will make the aliens able to take control of our bodies when they invade us in 2010. (The same goes for the iPod mini) :D

[ingenious]

I think I got it now. This whole thing is actually planned. Real and Apple have already agreed to this deal but to get better press they do it this way instead of just announcing it once.

Now they get a proposal by Real followed by lots of speculation and press coverage which also will increase the interest for Apple's next public appearance followed by Apple making a statement at NAB where they say something about being interested in discussing the deal in more detail. This will of course also have the affect that more press-attention will be directed towards Apple when they release the new iFridge with AAC support at NAB.

Oh and the PowerBooks are actually made from a metal alloy taken from Area 51. The metal slowly melts when exposed to sweat and the metal is slowly taken up in our bloodstream. This will make the aliens able to take control of our bodies when they invade us in 2010. (The same goes for the iPod mini) :D


that was pretty stupid, but maybe youre sorta right that apple knew about it ahead of time and it was purposely leaked? :confused:

[a_iver]

Anybody else worried that the iPod might not be promoted as long as Real says? If it is just promotion what do you think the Real customers (and I say that with some confusion) will buy- what's better or what's in all the magazines. What if other companies start to make AAC players.

i think Apple needs to be a cheap french whore right now to entrench themselves in this market.

And hope Real stops being such a flippin' dominatrix. :D

I think I need a cold shower...

[montex]

Real needs Apple a lot more than Apple need Real.

[ryanw]

If Real and Apple get together, they would surely kick microsucks ass
I don't understand this mentality. Sure I love Apple... but I sure as hell hate REAL. I don't see this being true.

APPLE + REAL = Microsoft losing money

Microsoft will be making billions while everyone else makes millions. It's how a monopoly works no matter what.

[uzombie]

Didn't Real do this when QT streaming was the buzz word?

They were into working with Apple (jobs gave the upper nose) then bailed to compete solo. Then Windows media player came around and now Real and Windows are flippin each other off, as Apple gets short end...again.

(Ok, QT movie previews are great niche but...most news sites are doing RM or wmv. Ugh)

[jeffgarden]

I know the Real Music Store already uses AAC, because I saw a pop up ad of theirs on a PC saying they have the best quality or something. They use higher than 128 bitrate AAC files

But, you can't even use their service on a Mac. If them partnering with Apple means you'll be able to then at least it's one more thing you can use on the Mac and that's a good thing. iTunes has the biggest current selection and the best store, but the fact is it's also the only choice for Mac users. Most people would still only use iTunes if all the other stores became Mac compatible, but right now we can't if we wanted to.

Since Real has their own exclusive tracks, i think it would be cool to be able to get songs from them AND iTunes. You have a better selection, more choice, and they both use AAC files with the same DRM restrictions.

For Mac users who use iTMS a lot, I think this is a good thing if it happens.

[gekko513]

that was pretty stupid, but maybe youre sorta right that apple knew about it ahead of time and it was purposely leaked? :confused:
Yeah, I know. I just realised that I was showing signs of turning into a conspiracy theorist so I just thought I would go all the way. I do however still think there's a chance there is some marketing plot here that we don't see.

[dontmatter]

Apple owns the music market because they invented the market. They still own the market because they're so far ahead of everybody trying to catch up, and yes, EVERYBODY is trying to catch up and get a piece of the action.

If apple seriously thinks it can go it alone against the likes of microsoft, sony, et al. (who may well do various partnerships so they can collectively work against apple) then all I can say is they will pay for their hubris. It doesn't matter if apple is better, bigger companies can sell at a loss that apple just can't afford, until apple is relegated to a very apple like position. After all, that's the story on apple computers, right? Don't underestimate the competition, apple. Just because they haven't provided anything like actual competition yet, doesn't mean they won't. Enough money and power can do most anything. Remember netscape, people?

And, honestly, what has apple to loose with this? real going to wma, that's all. Look, it's perfectly microsoftian-if apple doesn't pair with real, and by doing so sell more ipods, increase it's credibility and AAC's market share, real player will have to go to ms to avoid imminent death, courtesy of apple and microsoft. Instead, what they'll get is maybe a year of being a tool for microsoft, letting microsoft get it's foot in the door on the market while it's still a little open, until they can use rediculous ammounts of money and software bundling (deal with lawsuits later) to get their own mediocre product on the market. Then, another x billion dollars and monopolistic manipulations, and they'll own the market, just by sheer force. Prices go up, all innovation stops, microsoft gets the market (plus rediculous profit margins). Meanwhile, real buys itself another year of partial existance before getting chewed up, swallowed, digested, and regurgitated into the trash can. And sure, lots of you don't like real, and don't care if it dissapears, but really, all that ammounts to is less competition in the market (and not to apple's advantage), which makes it easier to take over, and stiffles all signs of innovation, except perhaps in marketing campaigns.

Apple, use your head. If you go it alone, you'll end up with the best product out there, for sure, and you'll sell it to 3-5% of all people buying onine music/portable players, etc. That would be tragic.

This might not even be able to stop that, but it can at least put it off for a while, sell more ipods, and give you a better chance. I'm a mac loyalist, yes, but I still have enough logic to know that no matter how rosy the situation now, and no matter how much you kick ass, you're still in danger, sooner or later. It's a profitable buisness, you've got, and everybody wants it. And you're making the best, but you really aren't so hot at what whoever wins this market will do-make something adequate, but without a high end price tag. This is america-people buy the cheapest. (wal-mart).

Now I need to go rate this thing as positive, except that I'm not sure why it was leaked, and I'm worried it might be because somebody at apple realized it's not likely to happen, but needs to.

[davecuse]

I think I got it now. This whole thing is actually planned. Real and Apple have already agreed to this deal but to get better press they do it this way instead of just announcing it once.

Now they get a proposal by Real followed by lots of speculation and press coverage which also will increase the interest for Apple's next public appearance followed by Apple making a statement at NAB where they say something about being interested in discussing the deal in more detail. This will of course also have the affect that more press-attention will be directed towards Apple when they release the new iFridge with AAC support at NAB.

Oh and the PowerBooks are actually made from a metal alloy taken from Area 51. The metal slowly melts when exposed to sweat and the metal is slowly taken up in our bloodstream. This will make the aliens able to take control of our bodies when they invade us in 2010. (The same goes for the iPod mini) :D


you hit the nail on the head

[dontmatter]

Real needs Apple a lot more than Apple need Real.

But both need pretty bad.

[Kagetenshi]

One reason for switching from Windows to Apple for me was MS abusing its propriety formats, if Apple starts doing the same I would really be ashamed. :mad: Apple should stay loyal to only supporting open standards, including fairplay. Steve you could spoil a lot of goodwill!!

Given that neither AAC nor FairPlay are owned by Apple, I don't think they're going to be doing the same.

~J

[ThomasJefferson]

Apple owns the music market because they invented the market. They still own the market because they're so far ahead of everybody trying to catch up, and yes, EVERYBODY is trying to catch up and get a piece of the action.

If apple seriously thinks it can go it alone against the likes of microsoft, sony, et al. (who may well do various partnerships so they can collectively work against apple) then all I can say is they will pay for their hubris. It doesn't matter if apple is better, bigger companies can sell at a loss that apple just can't afford, until apple is relegated to a very apple like position. After all, that's the story on apple computers, right? Don't underestimate the competition, apple. Just because they haven't provided anything like actual competition yet, doesn't mean they won't. Enough money and power can do most anything. Remember netscape, people?

And, honestly, what has apple to loose with this? real going to wma, that's all. Look, it's perfectly microsoftian-if apple doesn't pair with real, and by doing so sell more ipods, increase it's credibility and AAC's market share, real player will have to go to ms to avoid imminent death, courtesy of apple and microsoft. Instead, what they'll get is maybe a year of being a tool for microsoft, letting microsoft get it's foot in the door on the market while it's still a little open, until they can use rediculous ammounts of money and software bundling (deal with lawsuits later) to get their own mediocre product on the market. Then, another x billion dollars and monopolistic manipulations, and they'll own the market, just by sheer force. Prices go up, all innovation stops, microsoft gets meanwhile. Meanwhile, real buys itself another year of partial existance before getting chewed up, swallowed, digested, and regurgitated into the trash can. And sure, lots of you don't like real, and don't care if it dissapears, but really, all that ammounts to is less competition in the market (and not to apple's advantage), which makes it easier to take over, and stiffles all signs of innovation, except perhaps in marketing campaigns.

Apple, use your head. If you go it alone, you'll end up with the best product out there, for sure, and you'll sell it to 3-5% of all people buying onine music/portable players, etc. That would be tragic.

This might not even be able to stop that, but it can at least put it off for a while, sell more ipods, and give you a better chance. I'm a mac loyalist, yes, but I still have enough logic to know that no matter how rosy the situation now, and no matter how much you kick ass, you're still in danger, sooner or later. It's a profitable buisness, you've got, and everybody wants it. And you're making the best, but you really aren't so hot at what whoever wins this market will do-make something adequate, but without a high end price tag. This is america-people buy the cheapest. (wal-mart).

Now I need to go rate this thing as positive, except that I'm not sure why it was leaked, and I'm worried it might be because somebody at apple realized it's not likely to happen, but needs to.

Brilliant response and analysis. This should be taped to Jobs' office door when he comes to work tomorrow.

[a_iver]

Maybe even the new logo: Think Different and by the way....

edited- ah, I got nothin

[winmacguy]

I think that while Real teaming up with Apple may not be great idea, Apple continuing to see partmership deals with other suppliers where value and market penetration from the deal with the respective company for Apple and the iPod/.AAC format can help to strengthen Apple's position is a good idea.

[davecuse]

Apple to maintain go-it-alone strategy (http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1079420375365)

Phew

[davecuse]

I just re-read over that article. I think the funniest line is:
In spite of an early lead and highly regarded technology, the Mac lost out to the open computing platform created by Microsoft's Windows and now accounts for less than 5 per cent of desktop computer sales.

[blabla]

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1079420375365
"RealNetworks said on Thursday that it added 100,000 new subscribers for its main online music services in the first three months of 2004 to reach 450,000 paid subscribers."

the subscription fee is $9.99/month, so already RNWK is getting about $45 million/year from this alone, but if RNWK is able to add 100K new users every 3.month, this revenue will increase quite a lot.

Apple only got about 75% marketshare in music DL if you use some funny restrictions like "pay per track numbers" and not mix in subscription too. Yes, Apple is currently getting more revenue from iTms than RNWK is getting from Rhapsody, but just like Apple, RNWK music revnue is increasing fast.

[blabla]

I just re-read over that article. I think the funniest line is:


Yes, extremly funny how Apple went from 100% market share to less than 2% over a period of 20 years. We can only guess Apple ( Steve Jobs) didnt learn anything from it. While Microsoft licensed out Windows, Apple didnt license out MacOS before it was too late.

[Fukui]

Yes, extremly funny how Apple went from 100% market share to less than 2% over a period of 20 years. We can only guess Apple ( Steve Jobs) didnt learn anything from it. While Microsoft licensed out Windows, Apple didnt license out MacOS before it was too late.

The Real funny thing is that Steve wasn't even around at apple when all that happened. And around 1994 Steve did licence Openstep and it run on more the 4 platforms, and it was still "too late."

[iggyb]

Given that neither AAC nor FairPlay are owned by Apple, I don't think they're going to be doing the same.

~J

I know AAC isn't owned by Apple, but I thought FairPlay was. Otherwise, why would Real need to ask Apple to license FairPlay?

[Kagetenshi]

Presumably because Apple's contract includes exclusivity unless Apple agrees to another licensee.

~J

[Sedulous]

Wasn't this Glasner guy the same person that said iTMS is crap, or was that the Napster guy?

[s10]

Yes, extremly funny how Apple went from 100% market share to less than 2% over a period of 20 years. We can only guess Apple ( Steve Jobs) didnt learn anything from it. While Microsoft licensed out Windows, Apple didnt license out MacOS before it was too late.

What's more 100% of 500.000 or 2% of say 38.000.000?

Apple is not after marketshare increase, but profit increase, do not confuse.

The other mistake is to confuse the Macintosh failure to become the dominating system and the iPods future. They are 2 different animals in different times.

[areyouwishing]

There are only 2 companies that can afford losing money on their music stores, well... maybe 3.

1. Microsoft
2. Apple
3. Sony (maybe)

If it isn't Windows, or Office, Microsoft loses money, so they are used to it. Apple may lose a small amount of money but they more than make up for it in iPod sales. Sony just has a bunch of money to throw at things, but it would ultimately have to be financially viable for them to continue their store. These are the true players.

Apple needs anyone they can get to compete against Microsoft in this battle, the REAL deal doesn't sound bad in the least, does it help save Real? Yes, but it also saves jobs(as in workforce) at Real which helps the economy, which helps Apple, not to mention it would sell more iPods. Jobs (as in CEO) is an idiot if he doesn't hook this up, does Real add any value to anything? No, but it will help market share, help fend off microsoft, and help sell iPods... all of which are in Apples best interest.

[blabla]

What's more 100% of 500.000 or 2% of say 38.000.000?

Apple is not after marketshare increase, but profit increase, do not confuse.

The other mistake is to confuse the Macintosh failure to become the dominating system and the iPods future. They are 2 different animals in different times.

Sorry if I post something similar twice..

Apple is clearly also after market share. Unlike Microsoft, Apple cant afford losing market share early in this emerging market.

As for the PC/Mac war and AAC+FairPlay/MWA war, I should probably used a car analogy instead :rolleyes: .. no, seriously.. I believe customers will feel vendor locked if they cant get the service they want, while other vensors provide the very same service. So, Im saying that Microsoft WILL change the rules of the subscription based services with "Janus", enabling the users to store subscription downloaded music to be stored on an mp3 player. Clearly, "Janus" will address some of the weaknesses of current subscription based services.

While Steve Jobs RDF'ed all of us Apple apologists into believing subscription based services sucks, but RNWK already got 450 000 subscribed, adding more than 100 000 new customers over a period of 3 months. This is even before any "Janus" technology is implemented!!

Im saying that Microsoft WILL change the rules of music dl business with "Janus". Thats why I feel the user should have the _option_ of using some subscription based service with their iPod. RNWK already got a big customer base ( probably closer to 600 000 before the end of the summer) and bringing them over to AAC+Fairplay, and thus iPod compatibility, could be a good thing (tm)

[maxterpiece]

This deal obviously would help ipod sales. The drawback is apparently less music sales, but I think that people see Apple as sort of a maverick company that creates great products but refuses to compromise... The shadow of the apple of the early 90s still hangs over the apple of today - that is, it is a company that gets too arrogant and when it is successful. Agreeing to a deal with real would present apple as a company that is interested in broadening the market for their products. Real has never made a good piece of software and my guess is that their music store will never compare to apple's so, in the end i see the main effect of apple licensing fairplay would be showing the public just how dominant they are in online music business. People would see apple's technology as the one that is going to last.

[jackc]

I don't know if this has been mentioned already, but every article I see about the iPod fails to mention that you can play MP3s on it, not just AACs from iTunes. (Let's face it, that's what most people care about.)

Not that the iPod is doing poorly, but for people who might not know any better, seeing "Apple" and "incompatible" all over the place can't be good. Need a little better PR, Apple?

[MacSlut]

The market cap of Real Networks is 1.12B. Apple has 4 times that amount in cash reserves *and* zero debt.

Apple should purchase Real Networks.

RealMedia servers should be rebranded as iTunes Media Servers and given away for free.

The RealPlayer should be killed with the functionality incorporated into iTunes. Recordability of allowed streams (complete with scheduling) should be allowed so content can be played anytime or downloaded to the iPod.

What Apple should *not* do is sign a deal with Real Networks that's based on driving demand to the iPod at the expense of losing iTMS customers.


Just to be clear, what I meant was that Apple should take the RealMedia server software, tweak it and bundle it for free with Xserves.

[jocknerd]

I would think the alliance would be a good thing. iTMS is meant to support iPod sales, and if Apple can get more stores to use FairPlay and work with iPod, iPod will sell even more. I, for one, know two people who bought a different player because they wanted to 'leave their options open' for what online store to ally with... And if Real makes a Mac compatible good player, that could be another good thing (make Macs seem better for other services, too).

The only thing I wonder right now is, what if a service goes down? What happens to all the purchased music? If Apple stopped the iTMS, what would happen to all the 50+ songs I've purchased? Would Apple just set up a server to 'authorize' new computers in the future? Would Apple let me deauthorize the songs so that I can use them with other computers/software? I stick with iTMS because I think it will at least be one of the dominant stores, if not the best.

This is why DRM sucks. And why PlayFair is such an important piece of software. Even is Apple is trying to get rid of it. After all, it was Steve Jobs himself who said that people don't want to rent their music, they want to own it. Well if we own it, Steve, don't we have the right to do with it what we want, as long as we don't share it?

[topicolo]

on one hand i would like apple to tell him to f... off (which steve in his wisdom surely will do) on the other hand i see a huge potential and am afraid of isolationism. has happened to the mac before, don't want it to happen to the whole music story here too. so yeah, take him up on it steve, your enemy's enemy should be your friend

I don't think apple would lose much if they did. Real isn't a big player in this market and they just don't wanna get squished by MS. Apple doesn't need them.

[RogerQ]

This deal obviously would help ipod sales.

Why would this help iPod sales?

Are there songs you can buy from Real that you can't get at iTunes? If you can get the songs you want at iTunes, why do you care if you can't buy them from Real?

[aussiemac86]

It is inevitable that other players will arrive which will be able to compete with the ipod, for example M$'s player which will surely be out soon. I think apple really needs to put alot more resources into getting as many ipods out there into consumers hands as soon as possible. Here in Australia the mini won't even be available till end of june/july. They have the oppurtunity to take a large chunk of marketshare right now, and the larger it is the more it will nullify the effect of M$ and sony releasing new players and trying to compete.
But as soon as a serious alternative to the ipod is released this oppurtunity will evaporate very quickly.

Time is of the essence.
I dont think they need the extra demand for ipod that the deal with real would produce, they need firstly to just supply the existing demand, before they lose it forever.

[MrMacMan]

Apple needs to license the software to Real Network.

They need to stop them from going with Microsoft on this.


Apple is gonna need some help when Microsoft enters the market.


They need this.

There are few downsides here.

[davecuse]

Apple already has the best Windows application out there. Why would they need to have RealPlayer, which sucks (and installs a ton of trialware) to corner the music segment. Real brings nothing to they table, they have offered horrible software for a very long time and will most likely continue to do so.

The only possible perk of this idea would be if some of the content that is currently (poorly) streamed in Real format, would be available to me in iTunes. I would like to hear some more streaming radio in iTunes, and hey maybe Real can help this out, but in the big picture what do they really bring to the table?

[Inspector Lee]

Apple needs to license the software to Real Network.

They need to stop them from going with Microsoft on this.


Apple is gonna need some help when Microsoft enters the market.


They need this.

There are few downsides here.

I thought RealNetworks was suing Microsoft for a billion dollars? (http://news.com.com/2100-1025-5129316.html)

They must be really on the ropes - note the way Glaser seems to be "John Wayne-ing it" here. What cajones. Nonetheless, this is AAC v. WMA and Apple needs as many soldiers it can get for this fight. They gotta open up.

[leftbanke7]

This is why DRM sucks. And why PlayFair is such an important piece of software. Even is Apple is trying to get rid of it. After all, it was Steve Jobs himself who said that people don't want to rent their music, they want to own it. Well if we own it, Steve, don't we have the right to do with it what we want, as long as we don't share it?

You're absolutely right. People don't want to rent their music. However, the RIAA holds the trump card in this little scenario (ie. the music) therefore, S.J. has to play by their rules for the greater good of the company (ie. more iPod sales).

And I feel that access on 3 computers with ability to change those computers (through deauthorization) over time and unlimited burns is pretty much allowing people to do what they want with the music.

I believe it said on the PlayFair website "information wants to be free". When did intellectual property ever get thrown into this equation?

[frankly]

wow. Real mustbe hurting bad. and ya - this would be bad for M$. I don't care about M$ though - I always want whats best for us and for Apple.

I don't see how this means that Real is hurting. I think this would be great for Apple. They have said all along that they only have the iTunes music store to sell more iPods. This would help that cause. Keep in mind that the number of iPods sold this past quarter was more than the number of computers sold for the first time ever. iPod sales are rocking!!!!!

Later, Frank

[frankly]

Would Real be using AAC for their audio too, then? Or just the DRM system on top of the RealAudio format?

Real already uses AAC. Even better, they encode their AAC at 192kbps. I bet it sounds great. So, it looks like they simply want to add the Fairplay DRM on top of their AAC.

Plus Real offers an unlimited access plan that allows you to listen to full length versions of every song they sell as many times as you want. I think the only catch is that you couldn't burn them to CD unless you pay for the songs you want to burn onto a CD.

Later, Frank

[frankly]

Aren't they out of money? They got pulled from LA & Chicago (pretty funny).

Anyway, I think Apple & Real should team up or Apple should buy Real.

Sorry to be off topic but that was a BS story propagated by Matt Drudge. It was not true. In reality they were trying to get a prepayment back that they had made for February. The station didn't actually start until March and the radio station that they had pre-leased the time from resold that time and wanted Air America to still pay.

Later, Frank

[oingoboingo]

God I despise comments like this.
Pepsi sucks. Stay away from them.
McDonald's sucks. Don't do business with them.
Nike sucks. How could Apple do business with them?
Now Real.
Better be careful or the only company Apple will be allowed to team up with is some adult toy shop down in LA.

Grow a pair and realize this IS FREAKING BUSINESS. If Apple want to survive the coming tidal wave of music related products and services they NEED to complete and just because Apple owns 70% of the market for its music store and 30% for music players doesn't mean that can't change.

Realize one and ONLY one thing. This market is about to get a 1000 lbs gorilla tossed into the ring when Microsoft decides to release their music store. Guess what 60 billion with a capital B and a 95% market share will buy MS when it comes to negotiating with the RIAA? Anything it wants. Apple needs allies like HP and they need support from companies like Real. Take your ideals somewhere else because they have no place in the business world.

True, true, all true.

But there is still no denying Real Player is a stinking piece of crap, and Real Networks are a bunch of retarded arse-monkeys.

[gerardrj]

Given:
that the iTMS seems to exist mostly to sell iPods (though it is slightly profitable)
iTMS only sells FairPlay/AAC files
the iPod is the most popular line of portable music players
You need iTunes to get music to the iPod
If you want to use an iPod, the you'll be using iTunes
iTunes has the music store built in
iTMS has the best price/rights setup in the industry

Why would Apple want to license any of the technology to anyone, especially a company that has treated Mac users as useless? Their site has this to say about their content "RealRhapsody music service is not available for Macintosh users".

Even if Apple did license Fairplay, who does Real think would want to download tracks from a web browser or another app, import them to iTunes then send them to the iPod? How would Real market their music service? "Look, we don't make the best player, we don't have the best store and we don't have the best jukebox, but if you do use our store, the files are compatible with the tracks you get from the leading one, and it only takes two extra steps to move them over."

Does it now have, or would the Real player suddenly sprout, a jukebox and iPod management interface if the deal went through? How would it interact with iTunes' management of the iPod?

[maxterpiece]

Why would this help iPod sales?

Are there songs you can buy from Real that you can't get at iTunes? If you can get the songs you want at iTunes, why do you care if you can't buy them from Real?

The quote you took from my post was sort of besides the point i was making, but I still think my statement was an accurate one. Some people- call them dumb, call them ignorant, call them apathetic - are going to use real's music store. Maybe only because real is already on their computer, maybe because a real ad happens to be the ad that they notice and remember... Real will recommend ipods to these users. Some of them will buy ipods. Just because ITMS is better, doesn't mean that people will know that. Remember, real's multimedia streaming software is at least as widely distributed as quicktime and is definitely more widely used in the distribution of content (see Amazon).

[Krrill]

Apple officially turned down the deal. So ends the posts =)

[elgruga]

I don't know if this has been mentioned already, but every article I see about the iPod fails to mention that you can play MP3s on it, not just AACs from iTunes. (Let's face it, that's what most people care about.)

Not that the iPod is doing poorly, but for people who might not know any better, seeing "Apple" and "incompatible" all over the place can't be good. Need a little better PR, Apple?

It isnt mentioned enough, thats for sure. This post hits the nail on the head - its PR that controls everything in our world - and Apple need reminding of that.

Maybe Real Player isnt so hot, but if it makes people think that Apple is compatible, then its a good thing.

Pity the world isnt as simple as we would like it to be, eh?

[alandail]

Apple should not only do this, but also allow any other music store to support fairplay DRM for AAC files. Prince just opened his own online music store that includes music that can't be found anywhere else. Because of DRM issues, thje store is WMA based only. So you can't copy these files to the iPod or to iTunes. You also can't burn a CD from a mac because of Micorsoft's lousy implementation of wmp9 for the mac. If Apple would simply license out FairPlay, these issues would go away. People are still going to come to Apple's store first, because it's built right into iTunes. But the more important issue is to drive iPod sales, which only brings more people to being Apple customers, thus making them more likely to consider switching to a mac.

[Hiroshige]

Apple Rebuffs RealNetworks' Approach
By THE ASSOCIATED PRESS

Published: April 16, 2004

Filed at 1:00 a.m. ET

SAN JOSE, Calif. (AP) -- Apple Computer Inc. apparently doesn't want to sing the same tune as its Internet music rival RealNetworks Inc.

Seattle-based RealNetworks said Thursday that Apple chairman Steve Jobs had rebuffed an offer by RealNetworks' chief executive Rob Glaser to meet and discuss forming an online music alliance involving Apple's best-selling iPod portable players.

....

``Steve just doesn't want to open the iPod, and we don't understand that.''

....

[wow, since macrumors is one hour behind me, it looks like I got news from the future]

[rwclark]

Apple should really do this. The prospect of WMA becoming some kind of de facto standard worries me.

[smartypantsguy]

I simply ignore any and every site that requires realplayer - I refuse to even have the program on my machine.
---------------

I've installed "RealAlternative", and it's a godsend... Plays all realmedia, but without all the Real C**P !!

Wouldn't be able to listen to "AirAmericaRadio.com" if I didn't have it... (Which, BTW, should be using Quicktime... C'mon Steve, aren't you a Leftie ? ?).

[thatwendigo]

"Steve just doesn't want to open the iPod, and we don't understand that.''

What isn't there to understand, really? Apple wants to control what goes on the iPod, so that they can keep a firm hold over the format and sales. It's simple.

I think he just doesn't want to have to go back to being owned by his old bosses at Microsoft. :D

Well if we own it, Steve, don't we have the right to do with it what we want, as long as we don't share it?

Actually, pay attention to things like software license agreements. You kind of sign away multiple rights when you do many of the things you take for granted on your computer. I don't agree with it, I think that it's ridiculous to place that kind of restriction on your customers, but lawyers have to make money somehow, I suppose. :rolleyes:

[mhar4]

True, true, all true.

But there is still no denying Real Player is a stinking piece of crap, and Real Networks are a bunch of retarded arse-monkeys.

That was my point.

[mhar4]

---------------

I've installed "RealAlternative", and it's a godsend... Plays all realmedia, but without all the Real C**P !!


Is there an OSX version?

[aswitcher]

Apple officially turned down the deal. So ends the posts =)

:D I am afraid beign new around here you may not have noticed that threads can continue in the face of all logic :p

[make it usable]

The interesting thing here is what people are saying about this could hurt Microsoft, and any chance to hurt them should be taken ;-).

The question is how much of a treat is Real Player and the music store to Apple. Judging by the quality of Real One Player, Apple should be able to easy keep out innovating them.

How nice it would be to get the AAC format more widely used, and MS gradully frozen out, or forced to change direction. In Europe, the ruling against Microsoft and the bundling of Media Player, might also help in this area, but only if Apple ups its game and really starts integraring Quicktime and i-tunes, and gets into the set top box and media centre game. But know I am rambling and starting on another point.

Just shows how this might be interesting news.

:) :rolleyes:

[Diatribe]

You can stop the speculation...
Steve said at the beginning of this week in an interview with the Wallstreet Journal that they are so far in the lead that there's no need whatsoever and doesn't make sense to work with anyone in the next places to open the iPod platform.
So I guess it's oh well again. Let's hope this self-confidence doesn't wear out and comes back to haunt him.

[bensisko]

While I agree that Apple should license Fair Play, I would rather they do it with a company that has a chance at being successful, and real just is not that company. If I were steve, I would be pushing hard for Sony to join alliances with Apple (i.e. having the Sony music store use Fair Play and AAC). (Yes, I know they've got their own format, but steve can be there on the rebound when they fail... =).

I agree with some of the others. Steve should tell Real to stick it. This guy has a failing business. Whenever I hear anything about Streaming Media, that guy from Real is ALWAYS there complaining about MS and/or Apple. If Real put as much effort into innovtion as they do companining, then they might be doing better.

It just bugs me that this guy, who has a huge over-inflated ego (way more than Steve or Bill) who is saying that, basically what ever direction Real takes is what will deturmine the future of the market. Sorry Real, you're just not that important.

Besides, what makes this guy think MS will take him? He's got lawsuits and other legal filings agasint microsoft up the wazoo. MS would proabably tell him to get lost as well.

[BenRoethig]

Apple should really do this. The prospect of WMA becoming some kind of de facto standard worries me.

That worries me also.

[sinisterdesign]

That worries me also.

well, i'm hoping steve's confidence doesn't come back to bite us all in the arse. i've never liked Real, but some partners would help in cementing AAC as a viable standard.

i mean, it was nice that AAC was chosen for DVD-A's computer playback, but that's kind of a small piece of the pie :
http://www.theregister.co.uk/2004/03/23/dvd_forum_chooses_apple_music/

especially considering M$ is already being given an even larger piece of the DVD pie:

http://news.com.com/2100-1041_3-5166786.html

does this mean my TV is going to have a BSoD?

[srobert]

I guess that Arn should add an "update" to this thread's front page link and description. ;)

[eroyce]

Wow, I can't believe I'm actually writing a post about how I think Apple is failing. I just read that Apple "rebuffed" Real's offer, and do you know what this means? It means that Apple is going to be the only company to use AAC because distribution channels other than iTMS will all be going WMA as they have no other choice seeing as Apple is not letting others use work in conjunction with them. Sure Apple has the leading market share now in online music, but do they really think they can rule on high without letting other companies offer products to compete with iPod. In the long run, the best thing for consumers is to have many companies selling AAC with Fairplay, and iPod having many competitors. Apple needs to embrace competition because as consumers we demand options. With no option but Apple, consumers will go elsewhere eventually. I really think that Apple is going to lose the format war. I hate to hear myself say it, but realistically if the market isn't open to everyone, (hPods don't count as competition), then Apple will lose out. Not working with Real was a very poor decision.

[Grimace]

Even though it might be nice to sell more iPods, if Real is using its own download service, that is competition (big or small) for Apple.

I think the smarter route is to partner with PC manufacturers like HP. That was BRILLIANT for Apple. Get them to use the software, they might buy hardware too - less need to worry about formats that way.

[Sailfish]

Not working with Rio or Real was a smart decision by Apple.

First of all iTMS makes little profit, but it sells iPods.

People like iPods, they consider using Macs because they are now exposed to Apple by visiting the web site because of iTunes/iTMS support or information for their iPods.

The HP deal brings that attention to Apple by placing iTunes on millions of PC's.

The deals with Rio or Real do just the opposite, they give access to the iPod and by them promoting either their format or WMA, force Apple to become just another PC company.

Even if Rio and Real sold "Fairplay" it still distracts from the main Apple goal, to sell Mac computers.

At less than 2% of the worldwide market, we really can't afford to diversify at this time.

Real and Rio know this, this whole Glaser email leak "game" has been a play to bring sympathy and put a dent into Apple by making them appear arrogant and turn people off to Apple.

But it seems the joke is on Glaser

http://zdnet.com.com/2100-1107-5193027.html

[Lancetx]

But it seems the joke is on Glaser

http://zdnet.com.com/2100-1107-5193027.html

Everyone needs to read this article. It just goes to show what a joke this proposal of Glaser's was. Kudos to Steve Jobs for blowing off this moron.

[blabla]

Wow, I can't believe I'm actually writing a post about how I think Apple is failing. I just read that Apple "rebuffed" Real's offer, and do you know what this means? It means that Apple is going to be the only company to use AAC because distribution channels other than iTMS will all be going WMA as they have no other choice seeing as Apple is not letting others use work in conjunction with them. Sure Apple has the leading market share now in online music, but do they really think they can rule on high without letting other companies offer products to compete with iPod. In the long run, the best thing for consumers is to have many companies selling AAC with Fairplay, and iPod having many competitors. Apple needs to embrace competition because as consumers we demand options. With no option but Apple, consumers will go elsewhere eventually. I really think that Apple is going to lose the format war.

AAC sure is the next Beta. While iTMS got an early lead, legal download service is mainly introduced in USA. By the time this broad payed music dl service get to Europe ( maybe late this year), Apple could be the only provider of AAC content. Even worse.. By then subsription services will look much better, since Microsoft is bringing the technology enabling you to use an MP3 player listen to music downloaded (thus only rented music) via subscription services. With WMA you can choose between a spectrum of different services: pay for single tracks (like iTMS), paying monthly subscription fee, and you can choose between different service providers. This is a good thing for consumers.

If MWA services get popular, I see one less reason to buy an iPod.. After all, it doesnt support MWA.

Seems to me Apple and Steve Jobs is doing a historical mistake here.

[hayesk]

AAC sure is the next Beta. While iTMS got an early lead, legal download service is mainly introduced in USA. By the time this broad payed music dl service get to Europe ( maybe late this year), Apple could be the only provider of AAC content. Even worse.. By then subsription services will look much better, since Microsoft is bringing the technology enabling you to use an MP3 player listen to music downloaded (thus only rented music) via subscription services. With WMA you can choose between a spectrum of different services: pay for single tracks (like iTMS), paying monthly subscription fee, and you can choose between different service providers. This is a good thing for consumers.

If MWA services get popular, I see one less reason to buy an iPod.. After all, it doesnt support MWA.

Seems to me Apple and Steve Jobs is doing a historical mistake here.

To understand Steve's point of view, you have to stop thinking like a computer geek. Think like a consumer. Consumers go choose the music player first. Then they will shop at whatever store works with the player. The key thing here is the hardware, not the format. As long as the iTMS has the songs the customer wants to listen to, they aren't going to care if it's not in WMA, because the songs play on their iPod. The format is irrelevant.

Licensing to Real will only serve to take sales away from the iTMS. It won't sell more iPods. People will buy an iPod because they like it, not because they can buy music at Real's online store instead of the iTMS.

[h'biki]

Ha. The reason Real made the offer to Apple is that they know that the iPod is the de facto standard in Mp3 players. Most people aren't going to be chosing an online music store and then buying whatever player is recommended; they're going to be buying the player they want and then using whatever store the player recommends.

Thats why the whole WMA thing doesn't bother me atm (not until Microsoft releases their store and incorporates it right into Windows). The player is driving the choice of formats and not vice versa. Most average consumers know nothing about formats and don't care about the format -- they care about the player.

Sure, they'll be the minority who will only support players that play OGG, but they're also the same crowd who don't want to spend money on anything. Ever.

[Heltik]

Tremendous news!!

Snap it up Apple! The only thing I can see that holds people back from downloading music from iTunes (other than the fact I'm in the UK and can't - pretty big one...) is that it's viewed as not the standard.

If Real use AAC then it will add prestige to the format... Which will make peole more likely to use iTunes. And even if people really are dumb enough to use real, then at least Real are pushing iPod sales.

Consider the revenues from iTMS. Consider revenues from iPod sales. Steve Jobs even stated that Apple are not making so much from iTunes, but they're selling a whole heap of iPods.

Fantastic.

[hillbilly1980]

If I was Steve Jobs, I would only do this if Real gave me something of value in return. Like full use of the Real Player code so that the QuickTime player can play all Real content. Otherwise, no way. At this point Real needs Apple worse than Apple needs Real...unless there is something good in it for Apple besides just money. This isn't like the HP deal where their exposure alone was worth doing it.

Real open sourced a huge chunk of their code called helix like over a year ago, they also stopped all the ****ty spamertisements at the same time. Real is run by some very intelligent geeks but unfortuntatly they let their marketing department get a little out of control for a few years.

Remember companies aren't evil only marketing departments.

[frankly]

If MWA services get popular, I see one less reason to buy an iPod.. After all, it doesnt support MWA.

Seems to me Apple and Steve Jobs is doing a historical mistake here.

You are making the completely incorrect assumption that people are basing their purchase of an iPod on what music service it supports. The bottom line is that no matter what you think the iPod has been and remains the biggest selling MP3 player. In fact, Apple sold more iPods in the quarter that just ended than they did in their record setting quarter that ended in December. Hello, they had a 909% increase over the same quarter a year ago and it doesn't show any signs of slowing down.

People want the BEST MP3 player. Period. And the best MP3 player is still the iPod.

Later, Frank

[512ke]

Steve and Bill are playing on the playground. They are the leaders. They are leading all the other kids to play ball.

Steve does not want to play with Bill. Steve goes his own way. He invents a shiny, cool ball. 30% of the kids go with him.

Bill invents a lopsided, dirty, leaky, broken ball. 70% of the kids play with Bill. They need Bill (of course to fix the ball).

At first, the kids who went with Steve are happy. They wanted to "be different". However, no kid truly wants to be different. They want to be normal.

One by one, kids start sneaking away from Steve to join Bill's game.

Bill alters his ball gradually so that it becomes impossible to throw or catch without his permission. He makes sure that Steve can never catch his ball.

Steve is alone. He has a shiny ball and less than 1% of the kids as friends.

Bill turns his ball into a death star and enslaves most of the Universe.

[frankly]

Tremendous news!!

Snap it up Apple! The only thing I can see that holds people back from downloading music from iTunes (other than the fact I'm in the UK and can't - pretty big one...) is that it's viewed as not the standard.

If Real use AAC then it will add prestige to the format... Which will make peole more likely to use iTunes. And even if people really are dumb enough to use real, then at least Real are pushing iPod sales.

Consider the revenues from iTMS. Consider revenues from iPod sales. Steve Jobs even stated that Apple are not making so much from iTunes, but they're selling a whole heap of iPods.

Fantastic.

I'm not saying that I don't think that Apple should make a deal with Real or others. In fact, I agree that it would be in the long term best interest of the iPod and Fairplay AAC. However, Apple is in a position of strength right now, Real is not and yet Real is making demands and threats. It would not be a good business decision for Apple to enter into an agreement with them under those circumstances and Steve Jobs knows this. Look at Apple's stock. It is more than double what it was at this time last year. Now look at Real's stock. That company is in trouble. Their business model is flawed. If they want to make a deal they shouldn't be so pissy and threatening about it.

Besides, their threats to go with Microsoft don't hold much weight since they have a multi-million dollar lawsuit against Microsoft right now. I think Microsoft will be inclined to simply let them die off as well.

Finally, it could hurt Apple to associate themselves and the iPod with a company that is close to failing. Imagine the headlines if Apple inks a deal with them and six months later they fold their music store.

Later, Frank

[wdlove]

My understanding is that Steve has already rejected the offer Real.

[utilizer]

Most of you were thinking like me earlier when I first heard about this relationship: "Cool Apple! DO IT!"

But after reading the WSJ article and reflecting on it for the most of the day, I'm struck by one point: Isn't Real's service (Rhapsody) a subscription-based service that users must pay a monthly fee to keep their music of songs?

Let's just theorize for a second here -- The Deal Goes Through for Some God-awful Reason:
Someone buys an iPod from Real's site and consquently uses Real's Rhapsody service. Now this consumer has downloaded in the neighborhood of a 1,000 songs over the course of six months and really can't find anything else that he would like to own, so he cancels the service. As he's preparing to go to work, he takes his iPod and hooks it up to the car audio system. Nothing plays because as soon as he canceled the service, all of his songs were too!

Now, let me just say that I don't know if Real charges $.79/burn rules apply to mp3 players as they do to CDs but you get the point. Apple cannot afford to let go of the process involved in protecting consumers. Steve knows this; that's why every aspect in the HP deal is still handled by Apple (iPod + iTMS).

That's why it will continue to see tremendous success. They already command 70% of the music downloading world and nearly a million iPods are getting put out the door a quarter. I'm not really certain why they put WMA support on the iPod (it's hidden); a backup plan maybe, but for what??? Apple is defending and fortifying its claim and will not repeat the same mistakes as before.

But, lurking in the mist to ruin Apple's chances could be Sony with their forthcoming media player and music service. :(

[fpnc]

I think it may already be too late for Apple to license Fairplay/AAC. True, in some ways Apple has a lead today but I expect that over the next year the WMA-based services and players will begin to dominate the market. Unless Apple partners with a major distributor within the next year (Sony?) I suspect that the Fairplay/AAC market will begin to falter and within two more years they could be in serious hurt (i.e. a minority player in the music download services).

I'm also worried that there is no low-end, flash-memory-based player that supports Fairplay/AAC. Steve Jobs has shown immense distain for those type of products, saying that they are basically unusable because they have too little capacity. But I suspect that many people will start with such players for cost reasons and it may be difficult to get them to switch to a new music format once they are ready to upgrade to a more expensive product. That's why I'm equally disturbed by a report that Apple turned down an offer to support Fairplay/AAC on the Rio players.

I'd actually like to see a small, flash-memory-based player from Apple. I'd much rather carry something like that than my iPod when I'm only interested in having a few hours of playback time (exercise, walks, a few hours on the beach, etc.).

[snahabed]

Seems to me that Apple is making a pretty big bet that Real is going to die off.

I think Apple needs to focus on more HP-like deals. Especially with Sony.

[Windowlicker]

But it seems the joke is on Glaser

http://zdnet.com.com/2100-1107-5193027.html

a very nice article indeed. Made me actually change my mind about some things.. Still I could see making AAC more popular would be good.

[s10]

I think it may already be too late for Apple to license Fairplay/AAC. True, in some ways Apple has a lead today but I expect that over the next year the WMA-based services and players will begin to dominate the market. Unless Apple partners with a major distributor within the next year (Sony?) I suspect that the Fairplay/AAC market will begin to falter and within two more years they could be in serious hurt (i.e. a minority player in the music download services).

I'm also worried that there is no low-end, flash-memory-based player that supports Fairplay/AAC. Steve Jobs has shown immense distain for those type of products, saying that they are basically unusable because they have too little capacity. But I suspect that many people will start with such players for cost reasons and it may be difficult to get them to switch to a new music format once they are ready to upgrade to a more expensive product. That's why I'm equally disturbed by a report that Apple turned down an offer to support Fairplay/AAC on the Rio players.

I'd actually like to see a small, flash-memory-based player from Apple. I'd much rather carry something like that than my iPod when I'm only interested in having a few hours of playback time (exercise, walks, a few hours on the beach, etc.).

I propose you buy a iPod Mini.

Some points:
-Most of you seem to forget the impact the HP deal will have on iPod sales and growing success of iTunesMusicStore and AAC (and also Quicktime) a far more important deal then sharing AAC with Real.

-Of course Apple will get bigger and better competitors in the near future, but teaming up with Real wont change the outcome of who will be the winner.

-If Sony will become the big competitor? I have my doubts. Of course they have their own Music label, but that is also their weakness. They seem to have lost their touch for innovating and successfull hardware lately, except maybe Digital Still Cameras.

-Microsoft starting their own Music Store. I have my doubts about this having to much of an impact too. Some think MS has a monopoly on everything, they have not; Windows and Office are the only really succesull products they have to offer. On all other fronts, games, handheld and phones, entertainment systems, servers they are not very successfull, so why should their Music store be successfull? They cannot build it in the system; they wont be allowed to do so. They already have competition; iTunes on HP for example. The files a MS Music Sore (MSMS?) would sell will be protected too, similar to AAC, not to be confused with unprotected MS media files. But you cannot play these files on the iPod, so why buy at the MSMS? ...and that brings us back to the start:

People don't care on who sells the music online, it's the hardware, what they have in their hands that counts! It's the iPod people want, the 'object de desire' of the moment. Just look at the sales figures.

[bensisko]

Seems to me that Apple is making a pretty big bet that Real is going to die off.

I think Apple needs to focus on more HP-like deals. Especially with Sony.

i don't think that Apple is thinking that Real will die off, more over that Real doesn't matter, and more to the point that MS probably won't deal with Real eather. It's a little like two people in a sword fight and when the bigger one knocks the other down and has a sword pointed at the smaller one's throught, then suddenly saying 'hey, let's be friends!' What real incentive does MS have to take Real? Not much. Maybe, if Real would drop all litigation against MS, but Real stands to profit more from lawsuits against MS than it does from partnering with them to offer music downloads.

Also, let's keep in mind that the HP iPod has not yet been released, so we don't know how successful that move is going to be. It might very well be that these Blue iPods sit on the shelves.

[jtfaria]

The media has hyped any number of new entries to the online music field. Most of them were supposed to have cut into Apple's online sales. At least one of them (WalMart) was supposed to have 'destroyed' Apple. None of this occurred. The media (constitutionally incapable of admitting that it doesn't know what it's talking about) now paints Microsoft as a looming threat that will... well, you know.

An insightful look at Microsoft reveals that it only leads in ONE area: operating systems (and some related software, like Word, Excel and Internet Explorer). Where it has ventured into other areas, MS has spent a great deal of money to finish second.

For example: the X-Box. Second to Playstation.

In the business of selling online images? Corbis, second to Getty.

Let's not forget that years ago, MS' online services were going to crush AOL (they didn't - although AOL has since collapsed under its own weight. A more accurate comparison would be: is MS' online network the dominant means for accessing the web, as AOL once was? The answer is - not hardly.)

PDA's? Second to Palm.

There probably are instances beyond the desktop where MS is in fact number one, but in the arenas where they felt the greatest need to contest, they have fallen short. In some cases, they've withdrawn altogether. It is also true that MS has engaged in some dubious anticompetitive pratices which have held back innovation in some areas. But they will be unable to compete, in this instance, through the same means by which they undermined smaller players. Apple is too big, and their hold on this market too established, for that to work. (Even if they COULD destroy Apple, would they WANT to? It only brings up the monoploy spectre again.)

The means by which MS achieved desktop dominance was simply that most hardware would not work without MS software. Since every business wanted a computer that worked with every other business computer, MS got its cut. But they never had a BETTER product (as Apple users will fervently attest). The point is, MS cannot apply this same advantage to taking control of the online music market. Anyone who buys a Windows computer HAS to pay royalties to MS, that's built into the price. But that does not mean the Windows user has to use MS' music system.... especially if one buys an HP. (Smart alliance on HP's part, identifying itself with a winner.)

Apple has worked out a better product, and the marketplace has voted for it. Not just the "creators" market, this is not like the Mac situation. This product, the iPod has cut a wide and deep swath for itself and is ripe for expansion (more on which later). To assume MS money alone can bridge the gap is to not understand MS' history in most marketplaces. No, MS cannot shape a monopoly on this product. Nor can they cut Apple off at the pass, as they have done to others. Nor will undercutting the service pay off (WalMart is making little headway). MS has to build a better product, and they will fail for the same reason they have failed in other markets: because you cannot innovate and copy at the same time.

On the other hand, if MS does manage to build a better product, that's great. Choice is good. Competition drives innovation. Apple knows what the iPod is doing for its bottom line. It hasn't tended to stand pat, at least not in recent years, and it seems to have a good feel for what can be brought to market.

I could not agree more with all posters about the absolutely sleazy nature of RealNetworks. Jobs, no fool, sees this as well. I'm sure if he does cut a deal he will maintain the upper hand. I would venture that one condition levied would be a time limit on the agreement. After that period, if Real has not played nice, Apple pulls the rug out and Real is that much further behind in making headway with a needed ally. Real is certainly not at all in the drivers' seat, and they want desperately (the deperation is seen in their implied 'threat') to partner with a winner. MS at this point is an unknown - or maybe not. Maybe Real understands the second-class status of most of MS' business ventures.

The iPod will soon expand its base on iPhoto and the huge number of digital photos floating around that no one will ever have the patience to print. People will accept the tradeoff of a small screen - they do so today on their cellphones. They'll dump their family pics and home movies AND their music on the next generation of a device they're already familiar with. (Yes, it'll kill the batteries quicker but that's another tradeoff people will accept to carry hundreds of images, and battery life will improve eventually.) In fact, some clever 3rd party marketer will quickly come up with a way to dump those cel phone images on the iPod in the user's OTHER pocket. Cool.

MS is a giant, but that won't make them top dog in an emerging field. It rarely has before, despite the fawning, unknowing press. MS dominates when they have a monopoly or can buy or in another way pre-empt the competition. Otherwise, they finish second or out of the running. In this horse race, it's Apple#1, MS (probably)#2, Real (and everyone else) a distant third. Second place is acceptable for MS (it'll HAVE to be), but Real can't afford to keep slipping. Don't think Steve doesn't smell the fear, just like he did with Disney.

[bensisko]

-If Sony will become the big competitor? They seem to have lost their touch for innovating and successfull hardware lately, except maybe Digital Still Cameras.

-Windows and Office are the only really succesull products they have to offer. On all other fronts, games, handheld and phones, entertainment systems, servers they are not very successfull, so why should their Music store be successfull? They cannot build it in the system; they wont be allowed to do so.

You're talking Sony?? The Sony Palm-based handhelds are the top selling, and highest rated Palm-based devices, not to mention, they have done some pretty amazing stuff with them.

On the Microsoft note, MS handhelds have been doing very well. With the introduction of the Pocket PC, Palm and MS have been going head-to-head when it comes to numbers. True they don't have a monopoly, but that does not mean that Pocket PC isn't successful.

Why would a Windows Music Store be very successful? Many reasons, not the least of which would be MS's power of influence to band all the stores using wma into a single collective. Another good reason? Micrsoft's marketing engine. They may not dominate the market, but they will be successful. Don't get the two confused.

[Foocha]

That's a very interesting analysis - I agree with your argument - it's by no means certain that Microsoft will dominate with their music store.

Whether they dominate with their Windows Media DRM format however is another matter altogether - they already have quite a momentum behind it, and Apples current lead, large as it may be, is still based upon a very imature market with very low volumes of sales compared with traditional CD sales. As the market grows, so will the investment from the big players. If the dotcom collapse and the steady dotcom growth that has followed has taught us anything, it's that first mover advantage does not necessarily count for much. The race has hardly started - Apple could easily lose its early lead.

Also, remember that we still have Palladium on the horizon, which could lock DRM purchasers into a proprietory Microsoft hardware platform and potentially lock Apple out.

[paulsecic]

Ha ha! This RealNetworks guy is like a modern enterprise version of Commodore Perry!

"Yes, we come on friendly terms, and we want to have a good relationship with you. Why are you so afraid of opening up? You have something we want, and we can give you something you need. But beware, if you don't agree with us, we will be forced to take up violent means to resolve the matter."

I give this guy a thumbs down. Who the hell does he think he is? Threatening Apple is not how you do business with Steve. Even I know that! Stupid guy...
I am a disabled Man and I type with a stick on my head and I have an old Imac keyboard with the on button. Will this first generation keyboard turn on a G5 destop?



irmongoose

[matthew24]

What came to my mind today was: Suppose I would buy a Sony CD and I could only play the CD on a Sony CD player! If Apple does reject the decent request of Real to share what should be an open DRM standard, Apple will be operating at the same low disgusting level as MS. I always hoped that Apple would show more ethics. But maybe I am only naive, and I should know that in business there are no ethics? :(

[macridah]

mr . jobs have a good chance of meeting at this weeks NAB conference. Rob Glaser, Chairman and CEO of RealNetworks will give a keynote on sat and apple will announce something big on sun. I doubt apple's announcement will have anything to do with real, i'm just saying they will be at the same place at the sametime. who knows. Officially, apple hasn't said no to Realnetworks. I hope apple partners with them; it will be a good move.

[grobbins]

But there is still no denying Real Player is a stinking piece of crap...
What problem have you had with RealOne Player for Mac OS X? It's a drag-install, Mac-native, optimized for Alti-Vec, and uses hardware video acceleration.

[bensisko]

What problem have you had with RealOne Player for Mac OS X? It's a drag-install, Mac-native, optimized for Alti-Vec, and uses hardware video acceleration.

yes, and MUCH more prone to 'network congetion' than eather quicktime or WMP. Not to mention it's not a simle download like quicktime or WMP, you have to jump through hoops. Finally, there was fiasco a while back where you had a really hard time finding a free version of the player.

Back in the day, Real was cool, but now I'd much rather format my video streams in Quicktime or Windows Media. I use Windows media when I want a reall small file size, and smaller resolution, and Quicktime when I want a high resolution and can be viewed full screen without giant pixals. Sorry Real, there just isn't much of a place for you anymore.

[spinko]

I think Apple should partner with Real..

http://www.macromedia.com/software/player_census/flashplayer/images/stats.gif

[w00master]

You are making the completely incorrect assumption that people are basing their purchase of an iPod on what music service it supports. The bottom line is that no matter what you think the iPod has been and remains the biggest selling MP3 player. In fact, Apple sold more iPods in the quarter that just ended than they did in their record setting quarter that ended in December. Hello, they had a 909% increase over the same quarter a year ago and it doesn't show any signs of slowing down.

People want the BEST MP3 player. Period. And the best MP3 player is still the iPod.

Later, Frank

Yes... the iPod is the best MP3 player right now. Yes... iTunes is the #1 music service online right now. Yes... people buy the MP3 player 1st then consider the music service... right now. However, trust me on this, it's not going to be that way forever. Apple *NEEDS* to open up, if they want to remain dominate in the digital music scene.

Eventually, people will want the ability to "shop around" and not be stuck with one source. Don't think so? Think about DVD players. How would you feel if DVDs followed the "apple model?" Do you think DVD's would have achieved the amazing "jump in popularity" of only the DVD player could be tied to ONE store? Heck no. Unfortunately, this is the mentality and methodology that Apple is using right now. In the long run, it's not going to have any legs. Eventually, people will want to find the "cheapest" source to buy their music. Eventually, the music player will hold less importance over the actual music itself. People want a player that plays the music they want to hear, not the other way around.

w00master

[billyboy]

Yes... the iPod is the best MP3 player right now. Yes... iTunes is the #1 music service online right now. Yes... people buy the MP3 player 1st then consider the music service... right now. However, trust me on this, it's not going to be that way forever. Apple *NEEDS* to open up, if they want to remain dominate in the digital music scene.

Eventually, people will want the ability to "shop around" and not be stuck with one source. Don't think so? Think about DVD players. How would you feel if DVDs followed the "apple model?" Do you think DVD's would have achieved the amazing "jump in popularity" of only the DVD player could be tied to ONE store? Heck no. Unfortunately, this is the mentality and methodology that Apple is using right now. In the long run, it's not going to have any legs. Eventually, people will want to find the "cheapest" source to buy their music. Eventually, the music player will hold less importance over the actual music itself. People want a player that plays the music they want to hear, not the other way around.

w00master

So why cant Apple take advantage of their market leadership, stick with what they are doing with the aim of tying up say 30% of the market for iPod and music store sales? That is a massive market share and worth billions in the long run. It isnt the whole market by any means, but they maybe think they would be more secure in the long run with the tied up model than trying to be all things to all people.

Also if the music is going to determine what player people buy, being market leaders now, why shouldnt Apple be able to improve iTMS and be the best store for choice and price, keeping iPod an ever popular choice?

[w00master]

So why cant Apple take advantage of their market leadership, stick with what they are doing with the aim of tying up say 30% of the market for iPod and music store sales? That is a massive market share and worth billions in the long run. It isnt the whole market by any means, but they maybe think they would be more secure in the long run with the tied up model than trying to be all things to all people.

Just like Apple's overall share... each year, it gets smaller and smaller. Unfortunate? You bet. Fortunately with OS'es (if that's even a word), a person can still extend the life of their machine running a "unpopular" OS. With a music player, it's different. If you only have one option to "shop" for your music online for your player, whereas all other players can buy everywhere else... how are you going to feel about your music investment? Do you know who tried this before? Sony. It was called beta. Guess what? Beta died as a format for the general public. Sure, at the time, Beta was better than VHS, but the reason why it failed was because Sony had closed it off (only offering limited "partnerships" with other companies), hence movie distributors stopped releasing their movies in the Beta format and went with VHS. Guess how those owners who owned a Beta video player felt? I don't want this to happen with the iPod I had purchased.

Also if the music is going to determine what player people buy, being market leaders now, why shouldnt Apple be able to improve iTMS and be the best store for choice and price, keeping iPod an ever popular choice?

I'm not saying iTMS shouldn't improve. Apple SHOULD improve it even more. More music, more options, better prices. But, if there's little to no competition in the market, how much is Apple REALLY going to improve iTunes? Do you really think Apple would improve iTMS as much as if there were competition? I doubt it.

w00master

[alandail]

I'm not sure it's fair to say that because there are other people trying to do what Apple is doing with iTunes music store that apple will lose any significant market share.

Napster is an also ran who is clearly looking for publicity. They are not the competition at all for the iTunes store. The only real competition is Microsoft convincing independent artists to open their own WMA based stores with exclusive content.

Apple is the only one who has the whole end to end solution. They have the store, they have the mp3 player, they write their own juke box software. Not only do they have the store, but their store dominates the market. Not only do they have the MP3 player, but their MP3 player dominates the market. They have the patent on the scroll wheel, which gives the iPod a huge advantage over the knock offs. What other MP3 player allows you to scroll through thousands of songs in a controlled and continuos motion?

How does anyone else really compete with that? It's not like it's hard to get to the iTunes store to buy music. Nobody's going to build a store that's at a more convenient place than built into the juke box software.

It's not like computers, where someone can make something "good enough" and sell it for 1/3 the price. There is a lower bound on what can be charged for online music sales. How many people are going to by a inferior MP3 player, use an inferior juke box program, all just to save a few cents/song.

[alandail]

oh, and even if there were no competition, Apple has strong motivation to improve what they are doing because they can grow this market by orders of magnitude over where it is right now. 50 million songs in a year can become 500 million can become 5 billion. Somewhere between teh 500 million song mark and the 5 billion song mark, online music sales replace CDs as the dominant music distribution.