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.
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Apple and RealNetworks Alliance?
- Thread starter MacBytes
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Can someone explain the benefit to Apple here?
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)
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)
License FairPlay NOW!!!!
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.
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
macrumors 6502
Apple just does not get it...
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 doesnt 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.
starboard said:
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 doesnt 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
macrumors 6502a
hmm....
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
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
xtbfx said:
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 f****ng embarrassment.)
not so fast...
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.
dukemeiser said:
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.
yes Apple must open up
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.
onemoof said:
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
macrumors 6502
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.
I would like to see AAC opened up, but not with Real, and not under these terms.
Asia?
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.
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
macrumors 6502a
MorganX said:
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
macrumors 68020
arn said:
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.
Market cap of RNWK = 25% of spare Apple cash
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.
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.
Both use AAC
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, .... 🙂
Ling said:
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, .... 🙂
Maybe I should reconsider
Okay, this has got to be the best damn idea I have ever heard! Scrap my last post. Come on Apple, buy 'em up!
MacSlut said:
Okay, this has got to be the best damn idea I have ever heard! Scrap my last post. Come on Apple, buy 'em up!
Itunes & competition
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.
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.
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
macrumors 68000
jesuscandle said:
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!)😀
joemama said:
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
macrumors 68000
faintedlife said:
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
macrumors 68000
phasornc said:
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)
Why "License... NOW?"
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)
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.
Wow, I didn't know I looked that young!phasornc said:
I'm sorry, what were we talking about?phasornc said:
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.phasornc said:
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, 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.phasornc said:
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
macrumors 68000
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
macrumors 603
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) 😀
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) 😀