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TMO Reports - Real Fires Back at Apple Saying Consumers Deserve Choice

by , 2:00 PM EDT, July 29th, 2004

RealNetworks responded Thursday to attacks by Apple Computer about its plan to allow songs bought on its online music store to be played on the iPod, saying they are offering consumers choice and have not broken any copyright laws.

"Consumers, and not Apple, should be the ones choosing what music goes on their iPod," Real Networks said in prepared statement given to the news media. The company said they "remain fully committed to Harmony," its recently announced technology that when released will allow customers of its Rhapsody online music service to play their music on a number of competitors players, including the iPod, thereby circumventing Apple's Digital Rights Management (DRM) technology known as Fairplay. Apple has refused to license Fairplay to any other music download service.

The company defended its claims that it has not broken any copyright laws by working around Apple's Fairplay.

"Harmony follows in a well-established tradition of fully legal, independently developed paths to achieve compatibility," said RealNetworks. "There is ample and clear precedent for this activity, for instance the first IBM compatible PCs from Compaq. Harmony creates a way to lock content from Real's music store in a way that is compatible with the iPod, Windows Media DRM devices, and Helix DRM devices. Harmony technology does not remove or disable any digital rights management system. Apple has suggested that new laws such as the DMCA (Digital Millennium Copyright Act) are relevant to this dispute. In fact, the DMCA is not designed to prevent the creation of new methods of locking content and explicitly allows the creation of interoperable software."

Earlier Thursday, Apple called Real's move to soon release Harmony, "the tactics and ethics of a hacker" and cautioned Harmony users they could be blocked from playing music on the iPod.

In a brief statement, Apple said, "we are investigating the implications of their actions under the DMCA and other laws. We strongly caution Real and their customers that when we update our iPod software from time to time it is highly likely that Real's Harmony technology will cease to work with current and future iPods."

Observer Comments

Show: Subjects Only | Full Comments
Close Name:jcbeckman Posts: 55 Joined: 06 May 2004
Subject: But they have a choice!

Consumers have a choice - buy some player other than an iPod if you want to buy music online. Or burn CDs and load them that way (a good idea anyway to have those downloaded songs backed-up). But no one is *forced* to buy an iPod!

Jack

View Name:RealityCheck -   Troll Posts: 392 Joined: 06 May 2004
Subject: Real Music Is Higher Quality Than iTunes
Close Name:Jon Stanard -   TMO Mac Specialist Posts: 2038 Joined: 27 Jul 2001
Subject:

I would not use REAL and High Quality in the same sentence, but oh well.


Actually, I think this is absolutely retarded. Next will Apple not let you rip MP3's of CD's you've bought and use them on your iPod??? It's the same freaking thing. You buy the music, as long as it's a compatible format, who cares. If it's MP3 or AAC, let it go. Stupid!!

View Name:Guest
Subject: Reality Check NOT
View Name:Guest
Subject: Choice
Close Name:kenaustus Posts: 601 Joined: 27 Jun 2003
Subject: There is an assumtion that Harmony isn't crap

Just how good is Harmony? Elegant, well designed just like iTunes? Only RC will be thinking that right off the bat.

Steve J has made comments in the past about the high cost of developing iTunes and The Music Store. Now Real has knocked out something in a very few months and are sucking all the PR they can out of it.

The proof will be in using it. From the comments above it appears that Real didn't spend much time or money in developing Harmony. maybe RC should be our official tester and tell us how wonderful it is. Just ensure you have a lot of backups before you do. And also can you tell us when you make your report about how easy it is to get Harmony off your computer and return to iTunes.

We'll all hold our breath . . .

Close Name:Kircle Posts: 271 Joined: 06 May 2004
Subject:

Everyone is missing the point! Apple makes the hardware. They get to decide what file formats to support. On the box it says your iPod will play MP3, WAV, Audible, and AAC. It doesn't say it will play Real/.rm/whatever. Now if Real starts advertising that their format is 100% iPod compatible, then Apple can then claim that Real is hurting iPod customers with misinformation and sue since they'll be the onces dealing with their customers, not Real.

So there you go. If Apple doesn't support it, it's not supported. End of discussion.

Close Name:Dean Lewis Posts: 156 Joined: 29 Sep 2001
Subject: Real is spreading FUD...

iPod users should have choice? They already have choice! They can rip their own CDs to any number of formats and put them on the iPod. The iPod can play AAC, Apple's Fairplay AAC, MP3, WAV, AIFF, Apple Lossless, and a couple others. If Real was so keen on getting its music on the iPods, it could just release the music on one of these formats, but it isn't about that... This is about selling yet another proprietary DRM with still more confusing license rights. How many DRMs are going to be out there in the world before people get fed up trying to manage it all? And how many are going to be more restrictive than Apple's? (Answer: all of them so far.)

If Real had offered a real option to Apple, Apple likely would have jumped on it. Apple has already worked withj BMW, Alpine and licensed to HP, after all. The truth is Real came begging and pleading, and Jobs saw what they had hidden behind their backs. Tough noogies, Real.

View Name:Guest
Subject: Real Networks are poo-poo heads
Close Name:JimWCB Posts: 301 Joined: 29 Aug 2002
Subject: Real can sell songs for ipod without hacking it...

Just sell unprotected MP3s.

View Name:Guest
Subject: This is fantastic entertainment!
Close Name:DawnTreader -   TMO Staff Posts: 13822 Joined: 04 Jan 2002
Subject: Re: Real Music Is Higher Quality Than iTunes

Quote
RealityCheck wrote:
Apple idolators wake up, music from Real is 192 Kpbs AAC, iTunes music is only 128 Kbps AAC. Greedy Apple doesn't want you to have access to a high quality music store, very sad.


Actually, no. Apple doesn't want a second-rate service advertised to work with iPods. From a legal stand point Apple needs to respond and indicate the company is not responsible for Real's claims and in the event Apple updates the service in a way that conflicts with Real's "chicken wire" port, Apple will not be held liable.

This is a PR stunt for Real and yet another awkward step by a company that realizes it can't build a viable music distribution service without iPod support.

Close Name:Tiger Posts: 940 Joined: 17 Jun 2003
Subject: Wall Street gets it

Has anybody else noticed...RealNetworks stock is trading at about $5 per share. Apple's is at $32.

Wall Street gets it.

Hopefully, everybody does.

RealNetworks is a dead horse. Somebody shoot it and put it out of our misery.

Close Name:DawnTreader -   TMO Staff Posts: 13822 Joined: 04 Jan 2002
Subject:

Real's market cap (the value of the company) has fallen below $1 billion. After hitting an all-time high of about $100 per share in early 2000(split-adjusting price), the stock is now trading at about 1/20th of that level.

Real Player's popularity has been eclipsed by QuickTime and the music store is not viable without iPod support.

Close Name:Biff Posts: 1479 Joined: 08 Apr 2004
Subject: You go, girl!

Quote
Guest wrote:
Two thumbs up! Let the FUD fly. How amusing. These battles are untimately won by introducing the best technogy Rather than control and domination. We will see how far Apple can get the "Old controlling the Whole Widget" approach!
Uh-huh. Like the Gameboy, for example? I think history would show that the best technology often does NOT win. But you're certainly right about Apple! I mean look at how poorly their "approach" is doing! How amusing indeed!

View Name:Guest
Subject: Real
Close Name:algr Posts: 282 Joined: 07 Aug 2003
Subject: Here's the choice I want.

Choice? How about the choice to use Real's codec in quicktime! That's the choice I want. For years Real has kept this locked up, to the inconvenience of all. (They give the encoder away free, but once you use it, it's impossible to convert your video to anything else.

Close Name:algr Posts: 282 Joined: 07 Aug 2003
Subject:

"Uh-huh. Like the Gameboy, for example?"

Gameboy has always had a real technological advantage. - It was dirt cheep compared to anything else. No one wants to buy their 8 year old a $299 gadget and watch him forget it on the school bus after three days and never see it again.

View Name:Guest
Subject: Will the DRM still work?
Close Name:iggyb Posts: 112 Joined: 09 May 2003
Subject: iggyb

Quote
Biff wrote:
Quote
Guest wrote:
Two thumbs up! Let the FUD fly. How amusing. These battles are untimately won by introducing the best technogy Rather than control and domination. We will see how far Apple can get the "Old controlling the Whole Widget" approach!
Uh-huh. Like the Gameboy, for example? I think history would show that the best technology often does NOT win. But you're certainly right about Apple! I mean look at how poorly their "approach" is doing! How amusing indeed!



How the hell did you figure out that was a girl?

Close Name:jacrav Posts: 268 Joined: 04 Jul 2001
Subject: Get REAL …

I hope Real isn’t getting as much attention in the real world as it is in this forum …
My only experience with that company is that when I downloaded the “free” RealPlayer X app. I apparently signed up unwittingly for the “trial” pro version, and started getting billed for it on a monthly basis, even though I never even used the app. once … after I called them (Long distance, as I live in the Caribbean), I was told by the support rep that I would be reimbursed for the last 2 payments (I hadn’t scrutinized my AMEX statements for several months, but had actually been billed 7 times, including two billings in one month) It took a lot of screaming and kicking (and threatening legal action) before I was finally refunded.
A very ethical company, and one I would sure be glad to see do business with Apple …

Close Name:DavidPhila Posts: 9 Joined: 09 Jun 2003
Subject: iPod users welcome limitations on their choices?

I love my Macs and my iPod, but I'm really confused that people would be so blindly loyal to Apple that they think it's just great when Apple sez you can't buy music from any other music web site. And people complain about the imaginary and untested lower quality of Real music files, but I'm certain that 98% of iPod users have downloaded illegal files from file-sharing networks. So top quality encoding (which itunes doesn't offer btw) isn't the main issue anyway.

I respect Apple's desire to make more money, and that's what this is all about. This isn't an issue of principal or quality or technical innovation. Apple is protecting its online store by keeping us from buying elsewhere. And as a loyal iPod consumer (working on my 2nd iPod), I'm not real crazy about Apple's tactic. Competition is a great thing for consumers, and I'd like to see more of it, not less. Competition is what leads to innovation.

And the petty gloating over Real's faultering is, of course, exactly what one hears from Windows users about Apple. It's pathetic to hear it from Mac loyalists. RN has been a major competitor to Windows, and it may be dead soon. MS has shown that it can use its profits from its near monopolies in OS & office sofware to move into any market, undercut and kill its competition. Competition becomes a thing of the past and the consumers are screwed.

I'm sure Apple's move somehow makes business sense. It looks to me like a short-term tactic at the expense of long term strategy--reminiscent of earlier Apple mistakes--but I'm probably wrong, since those guys aren't stupid. What I can't understand is a bunch of iPod users cheering being abused.

Close Name:Small White Car Posts: 1950 Joined: 02 Jul 2004
Subject: Not that

Quote
DavidPhila wrote:
And the petty gloating over Real's faultering is, of course, exactly what one hears from Windows users about Apple. It's pathetic to hear it from Mac loyalists.


Oh, believe me, my opinions of REAL have NOTHING to do with all this. I absolutley REFUSE to let anything that company makes touch either my Mac or my PC. I've been burned by them too many times in the past.

Everything they make ends up hurting the consumer and I would love to see them fail. The fact that Apple's fighting them is interesting to me, but even if they became best friends tomorrow I will NEVER use any REAL software again.

View Name:Guest
Subject: REAL Headaches
View Name:Guest
Subject: It's the End-to-End Experience
Close Name:Tiger Posts: 940 Joined: 17 Jun 2003
Subject: I want in!!!

This is blatant petty jealousy at its rawest.

Apple found a way to make oodles of money and have the coolest thing on the market. Real hasn't had a hit with anything. Woo hoo. 550,000 Harmony subscribers.

Pit that against 100 MILLION songs sold legally on iTMS.

They want in before they're put out of business. As for Apple's requirement us use their store for their device, big deal. They have over 700,000 songs. Can you listen to them all? I can't. It is their way of quality control for the listener. You're not forced to buy an iPod. I wish I could afford one! RealNetworks needs to pack up its toys and go home. You lost this game. You were never really in it to start with.

Close Name:Roger Plowman Posts: 29 Joined: 01 Nov 2003
Subject: Um, guys?

Am I the only one who gets the point that an iPod is a piece of hardware?

Or that what Real has done is create a format converter from RA to AAC format?

While A) I don't like Real *AT ALL* and B) I understand why Apple is in a snit that their holy cash cow has a new hitchhiker, I have to say that Apple's up a creek here, without a paddle (or boat).

Once you buy the hardware you can do with it whatever you like, Apple has no say in the matter. Always assuming Real followed strict reverse-engineering guidelines to create their format converter, Apple also has no say in the matter.

When all's said and done AAC (or Fair Play or whatever) is just a data format. No different in principle from Word's DOC format, or XML or Jpeg.

Or, closer to home, PDF. Do you hear Adobe or Microsoft creebing that someone has dared to (gasp) convert their third party format into DOC or PDF? Didn't think so...

From what I understand Harmony converts the file on the fly as it loads it to the iPod. Surely that's innocuous enough?

I also don't understand why having access to EVERY music format (including WMA and Vogg Orbis) would be a bad thing for Apple's bottom line vis-a-vis the iPod.

Imagine this scene at an Apple store:

"Can I help you?"

"Yes, I have a question about the iPod. I'm a big music fan and I've got tons of downloaded stuff already. Will the iPod play it?"

"Well, where did you download it from?"

"Oh, some of it is MP3's but I got a lot of it from Rhapsody."

<pause>

Currently:

"Um, well, the iPod will play your MP3's no problem!"

"What about the stuff from Rhapsody?"

"Well, no. But the iTunes music store has lots of stuff you can get too. You know they've sold over 100 MILLION songs?"

"But what about the stuff I've already paid for?"

"You could convert it to MP3..."

"How do I do that? Will it take long?"

"Uh, well that depends..."

OR (ALTERNATE UNIVERSE)

"Sure, no problem! In fact the iPod can play any music format ever created. Just plug it in, fire up either iTunes or Harmony or Windows Media Player and pick what you want to load to the iPod."

"Great! I'll take it."

Now if you're Apple which conversation would you rather have with a prospective iPod buyer?

More formats = more iPods sold.

Surely this is not a difficult equation? But, as always, Apple is determined to shoot themselves in the foot with a Gatling gun. <shaking head>

I just do not understand what Apple is *thinking*...

View Name:Guest
Subject: Is that RC as "Guest"?
Close Name:DavidPhila Posts: 9 Joined: 09 Jun 2003
Subject: The hallowed "desired customer experience"

I think one should think twice before using a meaningless phrase like "desired customer experience." Desired by whom?

And then you should get off your high horse. I don't think I'm likely to hurt myself or others by buying music from a competing website, downloading such music to my desktop and dragging it into iTunes. Maybe I'd like to do that. Maybe another music site will be cheaper or better designed than Apple's music store. ITMS is not perfect, and it's perfectly conceivable that an alternative store would be better.

Apple's restricting my ability to shop somewhere other than ITMS means I can't go out to seek the highest quality or best music on my own. For Apple or for Apple zealots to defend Apple's actions in the name of "desired customer experience" or platform integration is just self-serving crap. iPod owners who actually welcome Apple's telling they can buy online music only from Apple have bought a religion, not a music player.

And for those of you cheering Real's demise, I suppose you'll be happy when most of the news/video sites on the web offer streaming video only for Windows Media Player.

Close Name:Jon Stanard -   TMO Mac Specialist Posts: 2038 Joined: 27 Jul 2001
Subject:

My biggest peeve is that iTMS doesn't have everything. If they don't have what I want, they are severely limiting my options, and that's not fair. As I said above, if it's in a format that works on the iPod, who cares where I bought it. Seriously. It's just stupid. To not let this work is ABSOLUTELY no different then if Apple made it so you bought a physical CD and ripped MP3's from it, that if that would not work. Same thing. It's just where you bought it, and that's lame.

View Name:Guest
Subject: Is Real stupid?
Close Name:ricardo Posts: 18 Joined: 16 Jun 2004
Subject: Interoperability

Ultimately the online music experience should feel the same as going in to any record store of choice, buying a cd and it plays on your stereo - regardless of brand. It has a long way to go being in its infancy and we may well just have to watch companies we admire as well as those we despise succeed and falter until the story plays out.

Bottom line - Real made a move to become a interoperability bridge between online stores and devices. Apple seeks to protect their turf. Makes sense for both in this early stage.

I love my original 5 GB iPod (battery continues to work!) and buy from iTMS. If other stores became available with songs I cannot buy on iTMS - you bet I would look into accounts on those as well if I can play the music on the iPod. In fact - I just might invest in a new 4G iPod if more options opened up for more song purchases digitally instead of ripping my cd's onto iTunes and to the iPod.

Close Name:zpok Posts: 80 Joined: 06 May 2004
Subject:

Whatever Apple's, MS's, Sony's and Real's strategies are, they can't do everything right for everybody. That's impossible.

However you look at it, the iPod is a piece of hardware. It is also a piece in a chain of masterly honed consumerism that's actually nice to use, but first and for all it's a piece of hardware.

Now, if an iPod owner wants to convert Ogg files or use Harmony, that's their business. Not everybody has to shout "woopie" and spend spend spend in Apple's holy grail of online Music. If someone really really wants to shop at Real's store, or any other store for that matter, let them. And take into account, it's MUSIC they're buying, not stock-options, karma points or superior formats. Music. Mu-sic.

Apple may publicly state they WON'T take Harmony into account when they keep finetuning their great iTMS to iPod experience, but what the f*ck else will they do about it?

Real hasn't done anything wrong, and might even - although I'm sceptical beyond words - they might even have made a good product for once.

Oh yeah, they "hacked" their way into iPod, and they will have to have one hell of a warranty statement attached to the product, and they won't be able to guarantee compatibility. But it's an interesting move, and maybe a useful one.

One last thought: I understand a lot of what's happening here, but this format warring has got to stop sooner or later. It's slowly getting to the point where technologically challenged people are going to be bigger iPod users than us wizz kids. And them "stupid" people are not very impressed with the finer points of format struggling. They want transparancy and simple stupid stuff that works. Now correct me if I'm wrong, but isn't that why 99% of mac users use a mac instead of a peecee??????

I'm with them.
Praise be Jobs, but make the music scene a bit hipper and more fucking rock and roll instead of members only!

Not that any of this is very important....

View Name:Guest
Subject:
Close Name:DawnTreader -   TMO Staff Posts: 13822 Joined: 04 Jan 2002
Subject:

I don't see anyone being "abused". Quite the contrary. Apple has mulit-year distribution deals with the majors which will allow the company to hold the line on prices. Further, and although iTMS has turned a slight profit, Apple's primary goal is to make margin on iPod sales.

The other music services are struggling due to a business model that seeks the sale of music as a primary profit center. Most likely that model will fail.

The iPod story isn't over. Quite the contrary. It's a story that has just begun. I expect Apple to eventually open the iPod to support WMA and eventually license FairPlay to a select group of vendors.

I spent several yea