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DRM music goldrush is a race for losers - mp3.com founder
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elektro80
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PostPosted: Mon Nov 24, 2003 5:02 am    Post subject: DRM music goldrush is a race for losers - mp3.com founder Reply with quote  Mark this post and the followings unread

DRM music goldrush is a race for losers - mp3.com founder

http://www.theregister.co.uk/content/6/34125.html

By Andrew Orlowski in San Francisco

Posted: 21/11/2003 at 11:24 GMT



 
Apple is leading a race of lemmings into the zero-profit business of closed music downloads, says the founder of MP3.com, Michael Robertson.

"It seems kind of crazy to me, the economics don't make sense," Robertson told us Thursday. "Why are all these guys like Microsoft and Wal-Mart rushing into a business where the industry leader says 'we cannot make money with the contracts that we have'?"

"This is a race where the winner gets shot in the head."

And William Tell-style, Apple volunteered to be the first into the firing range. Canny Apple has had to swallow the pigopolists royalty fees, and DRM restrictions, but it thinks it has a business because its closed business model sees downstream profits from iPods sales.

Robertson started MP3.com in 1998 and after a barrage of lawsuits, sold it to Vivendi Universal in 2001. Last week, after a night on the tiles, Vivendi sold the mp3.com domain name to CNET, leaving the million-song archive to the vultures. (Robertson is striving to find a host for this, and we shall have more news of this later today).

The computer industry traditionally opposed the copyright cartel, but Apple was the first snitch to cut a deal with the pigopolists. Was this wise, we wondered?

"If one company got a huge market share - say 50 per cent or higher - they could negotiate better royalty rates," notes Robertson. "But they forget something. The music industry is tens of thousands of publishers and just five major record labels. Getting all of them to agree is a real tough thing to accomplish even if you're market leader."

Without any Beatles songs, and with only one Roxy Music track on its music kiosk, Apple is currently in a position of begging the big five for content, rather than dictating the terms of the deal. It's the rebel without a clue. Can it turn the tables?

Well, there are several factors that ought to halt the wannabee players in the DRM goldrush in their tracks. A compulsory licensing scheme (which is now backed by the libertarian rights group the EFF) is one. But Robertson points to another: the decision by courts to permit KaZaA peer to peer-style sharing.

"It's the wild card," says Robertson. "KaZaA has been ruled legal, so why pay for restricted music?" he asks.

"Apple really haven't sold that much music. And they've received millions of dollars in free advertising. Don't get me wrong, Steve Jobs is a smart guy who knows the economics. He's clearly betting that he can subsidize it with profits from iPods, or get enough scale to begin renovating the royalty deals."

"It's a real dilemma for me," he says, echoing the thoughts of millions of peer to peer music lovers. "If I 'steal' music from KaZaA I get all this music, but if I pay I have all these restrictions."

If people can get unrestricted music for free, why would they need to go to a DRM store to get a low-quality version with all the strings attached, Robertson wonders. KaZaA, and future P2P technologies make file sharing so simple and fun.

"People will use P2P and people will buy CDs," he predicts.

With so many people - other than the DRM gold rush entrepreneurs - accepting such constraints, accepting that people will always want to share music, and technology will always outwit DRM controls - we're left with the ethical problem of how to compensate the artists.

(Which is why there is such momentum behind compulsory licenses right now. Many people accept that stopping music-sharing is a lost battle, so our better minds are thinking of schemes to use the technology to compensate artists fairly).

Robertson doesn't agree with the idea of a levy, but agrees "there needs to be a radical change here".

And pundits should be wary of Apple's early apparent success, he warns. "I'm not sure if an Apple user is representive sample of the population," he says.

True enough.

Paying for restricted versions of songs they could have got unrestricted and for free has been the real litmus test for Apple loyalists. It's a hurdle they've leaped over with glee. But how many will follow them? Has Steve Jobs mistakenly extrapolated cult behavior and assumed the rest of the world follows shares these values, and follows these assumptions?

That's not what we hear from you.

It's rather tasteless to remind you that this week is the twenty-fifth anniversary of the Jonestown Massacre - where a charismatic San Franciscan decamped to the jungle and persuaded almost a thousand followers to commit suicide, by drinking toxic fruit juice. It gave birth to a lasting idiom: "have you drunk the Kool-Aid?"

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PostPosted: Mon Nov 24, 2003 7:41 am    Post subject: Reply with quote  Mark this post and the followings unread

Quote:
"It's a real dilemma for me," he says, echoing the thoughts of millions of peer to peer music lovers. "If I 'steal' music from KaZaA I get all this music, but if I pay I have all these restrictions."


That is a good summation.

Question: Does the iPod play ordinary mp3 files, or just the iTunes format?

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PostPosted: Mon Nov 24, 2003 7:45 am    Post subject: Reply with quote  Mark this post and the followings unread

Yes... the iPod plays mp3 files. And.. of course it also plays those DRM mp4 files
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PostPosted: Mon Nov 24, 2003 7:48 am    Post subject: Reply with quote  Mark this post and the followings unread

elektro80 wrote:
Yes... the iPod plays mp3 files. And.. of course it also plays those DRM mp4 files


So, iTunes in itself isn't really all that great a thing to sell iPods, is it? I'd think most people have mp3s on their iPods and would buy one even if they never used iTunes. Is that a good assumption?
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PostPosted: Mon Nov 24, 2003 7:57 am    Post subject: Reply with quote  Mark this post and the followings unread

Ahh... depends on how you compute this. Apple looks at the iPod as a platform and set up the iTunes Music Shop in order to serve consumers using this delivery platform. On its own, the iPod is one excellent mp3. player.. and the iTunes app is one excellent mp3 playback app.

The iTunes Music Shop serves now iTunes app and iPod device users.

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PostPosted: Mon Nov 24, 2003 8:03 am    Post subject: Reply with quote  Mark this post and the followings unread

If you have a PC... get the iTunes 4 app for PC from http://www.apple.com/itunes

You can then browse local files.. and organize the mp3 files locally.... and.. visit the iTunes Music Shop using the same app. THe IMS section of the app is in fact an xml browser. You never leave the iTunes app enviroment. Very kool implementation! You can freely listen to the first 30 secs of every song in the webshop. Try this and tell me what you think..??

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PostPosted: Mon Nov 24, 2003 10:20 am    Post subject: Reply with quote  Mark this post and the followings unread

elektro80 wrote:
Try this and tell me what you think..??


I got the software. Impressive. It went through my PC and found all of the media files and put them in one library. This is very useful because I don't have to know where everything is. Unfortunately, it hides where everything is, but if you right-click on a song, you can see the actual file and folder. The library organization by artist, genre and album is very nice and useful.

The store is really nice. I went to the electronic genre and there were lots of things I haven't heard before, naturally. The free preview is quite nice. Everything worked very fast, except for one link.

The visualizer is not all that great. It starts out with the Apple logo. Not cool. I'm looking for something we can use in live performance.

This organizer thing is nice. It would be nice if it would use another website, like electro-music.com. Maybe this is possible. Does anybody know?

A lot of marketing power is on the front page of the iTunes store. For example, it features Britney. I checked out her music video, In The Zone. Impressive. It is very tough for independents to compete with this kind of expensive production and marketing.

I can see why you like this software and the iPod combination now. You can carry your entire music library around in your pocket. It's so nicely organized; so easy to find what you want when you want it. I can dig that. It does make CDs seem obsolete.

This is well beyond anything mp3.com had.

I can understand the comment about stealing vs. buying. If you had stolen mp3s, you could use this software and hardware. There is no advantage to buying, except the convenience, and the good conscience. The disadvantags are the limitations to the iTunes software and the iPod hardware.

Is there any sharing feature with the software?
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PostPosted: Mon Nov 24, 2003 12:54 pm    Post subject: Reply with quote  Mark this post and the followings unread

Let's not forget the unprecidented Apple/Pepsi promotion that will be kicking off in Febuary. Talk about a marketing howitzer.

Cyx

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PostPosted: Mon Nov 24, 2003 3:23 pm    Post subject: Reply with quote  Mark this post and the followings unread

The only problem with mp3 is the bad bad sound quality.. the mp4 version you hear at the IMS is slightly better.

What I would wish for is that when I buy a CD... or whatever.. I get a license.. and .. well.. think 10 years into the future.. then I can upgrade my music to EVD or memory-bricks or whatever. When you own a license you should be able to use this music on whatever playback device you can transfer it onto. If the actual CD dies.. you can show you license at the store and order a backup CD at a decent price. Nah.. sigh... in my dreams..

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