Wal-Mart has an online music store?!

Give me a moment to get over the shock!
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Okay, I'm better now.

If Apple doesn't have the "next big thing" sitting on a shelf at 1 Infinite Loop, then I think they just need to keep doing whatever sells the most iPods, because clearly that is where the profit is, not in selling individual songs for $.99. However, I also think that there is something to be said for keeping iTMS and the iPod together and shielded from everyone else. The whole seemless integration of the two is what makes both of them so awesome, but once you get into other stores offering downloads of the same stuff that will be able to play on iPods, that just mucks it up and it won't be as streamlined. Of course, from a consumer perspective, if all the online music stores could sell iPod compatible music, there would most likely be competition (well, in a perfect world there would be), and prices per song would drop (but what's 99 vs. 69 cents for those that only buy occasionally?), and that would be good for average joe.

But in the end the integration of iTMS and the iPod is just too sweet and near perfect that, IMO, Apple should just keep that intact and screw everyone else and continue to illustrate how poor the competition is.

I doubt you'd see song prices drop, no matter how many online stores pop up. From what I've read, the music lables THEMSELVES would have to lower the prices. And why would they? They make money no matter who sells their songs.

That point aside, I do think Apple should let others use their standards. Everyone keeps saying they make their money from iPods, not the store, so I'm not sure what their problem is.

But on the OTHER hand I can see why locking people out is a good idea. Think about it, every piece of REAL software I've ever used has annoyed me to no end. If Apple agreed to work with them, and their program sucks, you'd start hearing more stories about how the iPod is difficult to use, when really it's the other program's fault. My guess is that THIS is the main reason Apple doesn't like these deals. Pretty much every other angle says it's a good idea, so for them to be upset they must be worried about this aspect.

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Small White Car wrote:
Think about it, every piece of REAL software I've ever used has annoyed me to no end. If Apple agreed to work with them, and their program sucks, you'd start hearing more stories about how the iPod is difficult to use, when really it's the other program's fault. My guess is that THIS is the main reason Apple doesn't like these deals.

What I don't understand is why does everyone believe that just because iTunes isn't compatible with other players today means it will always be that way. Every single opinion I've come across either defends or scolds Apple's current stand on the issue, and not one of them seriously considers the posibility that Apple will shift its strategy in the future.

My take? Just as the iPod was originally for the Mac, iTunes is originally for the iPod. Expect Apple to open iTunes to all MP3 players when they good and ready, following a strategy not unlike the one they used for the iPod.

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Kircle wrote:


My take? Just as the iPod was originally for the Mac, iTunes is originally for the iPod. Expect Apple to open iTunes to all MP3 players when they good and ready, following a strategy not unlike the one they used for the iPod.

Ok so it seems that Steve will be around for a while longer after that cancer episode. As long as Steve says no, Apple won't license Fairplay. So do you think he will change his mind and what would be the reason?

Boy, you guys sure know how to milk an issue for all it's worth. How many discussions on this have there been in the last two weeks?

I think we need one more.

There were players before the iPod was released, just as there will be more players in the future.

There is more than one issue here. First is the iPod itself. A driving force behind it's sales is its simplicity, or elegant design. Now that Apple has shown the industry how to do it there is no excuse for competitors not delivering an elegant player that will sell well.

The other critical factor is iTunes. Again, Apple has shown everyone from MS to Sony to Real how the software should work. Simple, elegant and a pleasure to use. No problem or excuse - just do it.

From what I understand, if you use Harmony you are not going to be able to use iTunes. Ooops. Real has their own software and you have to use it? Can't use iTunes? Is it as elegant? What about all the music you bought on TMS?

Then there is The Music Store. Again, Apple has shown the competition how to do it. Simple. Wal-Mart, Sony, buy.com(?), etc. have their stores. Pretty soon schools and churches will have music stores for fund raisers. Let em go for it and offer all the choices they want. Might be as profitable as the lottery.

But, after Apple has shown the competition how to put all the parts together for a successful integrated offering, don't go screwing up the original. Make your own. It's not about "choice", it's about money and companies that can't understand how it's done AFTER Apple has shown them how to do it don't have much to offer except problems. They are too cheap, lazy or greedy to do their own and they are going to be too cheap, lazy or greedy to make their music store offering at the same quality level as Apples. That means they want to drag us into the same mess that PCs are in.

I have only one comment after thinking about this Real stuff recently.

Apple needs to do better than 128Kbps. I don't need 192, like Real's store offers. 160 would be fine, but 128 is a joke. To me, that's the only "real" thing Real has to offer.

If Apple/iTMS wants to stay the leader, they need to step up with better quality at this point.

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Billy K wrote:
I have only one comment after thinking about this Real stuff recently.

Apple needs to do better than 128Kbps. I don't need 192, like Real's store offers. 160 would be fine, but 128 is a joke. To me, that's the only "real" thing Real has to offer.

If Apple/iTMS wants to stay the leader, they need to step up with better quality at this point.

I get tired of supposedly intelligent musings, like this article, that can't seem to deal with the whole story as it will break down their arguments into mindless mush. So instead, key facts are left out completely.

Dear author, you have not addressed the fact that the iPod actually supports a lot of formats in addition to AAC+Fairplay (MP3, AIFF, Apple Lossless, and more) which enable a lot of content from others, besides Apple, to be placed on the iPod. This includes content PURCHASED from Audible as well as AOL sessions.

You have not addressed the fact that Apple brought iPod support to Windows to broaden the market for it (first with MusicMatch who bites). Then Apple brought iTunes to Windows in order to better meet the needs of this larger market as demanded by it.

You have not addressed the fact that Apple has done deals with other very large partners (ex. Pepsi, AOL, VW, BMW, etc.). These deals have now extended to include another device manufacturer, Motorola, to put music on cellphones.

All this in the first two years of iPod and one year of the iPod music store. During a time when Apple has had to make the world's first ever music store successful (others, like Real and Microsoft, are busy running around doing everything but make their stores successful) and open up international versions of their store (no small feat I'd guess).

So please spare us you limited view of a complex story. Apple is the only one that seems to know what to do to make a great digital music product these days while also creating a successful digital music business partnering with others. So what if they don't have an open licensing model for FairPlay?

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Guest wrote:
I get tired of supposedly intelligent musings, like this article, that can't seem to deal with the whole story as it will break down their arguments into mindless mush. So instead, key facts are left out completely.

Dear author, you have not addressed the fact that the iPod actually supports a lot of formats in addition to AAC+Fairplay (MP3, AIFF, Apple Lossless, and more) which enable a lot of content from others, besides Apple, to be placed on the iPod. This includes content PURCHASED from Audible as well as AOL sessions.

You have not addressed the fact that Apple brought iPod support to Windows to broaden the market for it (first with MusicMatch who bites). Then Apple brought iTunes to Windows in order to better meet the needs of this larger market as demanded by it.

You have not addressed the fact that Apple has done deals with other very large partners (ex. Pepsi, AOL, VW, BMW, etc.). These deals have now extended to include another device manufacturer, Motorola, to put music on cellphones.

All this in the first two years of iPod and one year of the iPod music store. During a time when Apple has had to make the world's first ever music store successful (others, like Real and Microsoft, are busy running around doing everything but make their stores successful) and open up international versions of their store (no small feat I'd guess).

So please spare us you limited view of a complex story. Apple is the only one that seems to know what to do to make a great digital music product these days while also creating a successful digital music business partnering with others. So what if they don't have an open licensing model for FairPlay?

"So, Real tried a different tack; it figured out a way to crash Apple's iTunes party, and allow iPod owners to load music from Real's own music store, or any downloaded music that uses Microsoft's Windows Media format, onto their iPods."

i thought real would use real music file format not wma format as that is their own design, am i off?
i'll bet that using this software converts the music to mp3 and using anapod you could then extract the file and use it unincomberred by drm!! cool. smooth move real!

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Guest wrote:
I get tired of supposedly intelligent musings, like this article, that can't seem to deal with the whole story as it will break down their arguments into mindless mush. So instead, key facts are left out completely.

Dear author, you have not addressed the fact that the iPod actually supports a lot of formats in addition to AAC+Fairplay (MP3, AIFF, Apple Lossless, and more) which enable a lot of content from others, besides Apple, to be placed on the iPod. This includes content PURCHASED from Audible as well as AOL sessions.

You have not addressed the fact that Apple brought iPod support to Windows to broaden the market for it (first with MusicMatch who bites). Then Apple brought iTunes to Windows in order to better meet the needs of this larger market as demanded by it.

You have not addressed the fact that Apple has done deals with other very large partners (ex. Pepsi, AOL, VW, BMW, etc.). These deals have now extended to include another device manufacturer, Motorola, to put music on cellphones.

All this in the first two years of iPod and one year of the iPod music store. During a time when Apple has had to make the world's first ever music store successful (others, like Real and Microsoft, are busy running around doing everything but make their stores successful) and open up international versions of their store (no small feat I'd guess).

So please spare us you limited view of a complex story. Apple is the only one that seems to know what to do to make a great digital music product these days while also creating a successful digital music business partnering with others. So what if they don't have an open licensing model for FairPlay?

I hope you don't think I'm nitpicking, or being argumentative for argument's sake, but your article is titled "Should the iPod/itunes Club Be Exclusive?"

It's not. Not be a longshot.

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Billy K wrote:
I hope you don't think I'm nitpicking, or being argumentative for argument's sake, but your article is titled "Should the iPod/itunes Club Be Exclusive?"

It's not. Not be a longshot.

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Anonymous wrote:
So please spare us you limited view of a complex story.

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Billy K wrote:
I hope you don't think I'm nitpicking, or being argumentative for argument's sake, but your article is titled "Should the iPod/itunes Club Be Exclusive?"

It's not. Not be a longshot.

I think APPL will break Harmony. They have no choice. If they don't, then soon every music store will sell to the iPod, the #1 player. This will weaken APPL's position as the #1 store for D/L's. Which means that no one will be able to negotiate a better deal with the labels. The music store is potentially a huge business, bigger than the iPod. Five or ten years from now, APPL could be selling billions of songs/year. Without having to manufacture anything, just run some servers. But the $plit needs to be flipped.
-Zato

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Bryan wrote:
Hey Billy, while I see what you are getting at, I think the argument can be made that iPod/iTunes is exclusive. The iPod won't play downloads from other DRM-based services, and iTunes downloads can't be played on anything but the iPod, and soon iTunes-enabled phones.

That's a form of exclusivity, though whether or not Apple is following the right path is really a different discussion. For the purposes of Vern's column, however, there's only so much you can say in the title.

Thanks, as always, for the comment.

Bryan
Editor
TMO

That's me above. I keep getting logged out.

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Anonymous wrote:
The music store is potentially a huge business, bigger than the iPod. Five or ten years from now, APPL could be selling billions of songs/year. Without having to manufacture anything, just run some servers.

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spxyu02 wrote:
I'm gonna have to disagree with you there. The meat and potatoes of this whole deal will always be the iPods. Apple makes close to no profits selling songs at a buck a piece, and on top of that, music piracy will always be around and probably one step ahead of whatever restrictions companies put on their players (kind of like spammers, virus writers, etc are always one step ahead of the spam blockers and virus updates). So while I think that the store will definitely stay on, as less and less people want CDs and instead will want the convenience of ordering online, I do not think that iTMS will overtake the iPod itself, or even become as huge as you say it will. People will come to find music through cheaper means and there is a cieling to hit in terms of number of songs available that people will actually want.

Yea, I do see your point about the iPods becoming cheaper and how then apple well make less and less money off of each iPod sold. I still think, however, that even the licensing isn't gonna get them that far because of all the ways that we will continue to use peer-to-peer programs to "trade" music with each other and things of that nature. If there comes a point where the iPod will only play iTMS and iTMS licensed types of songs and no longer play an mp3 you ripped from a cd or "borrowed" from a friend, then maybe the iTMS will bring in the big bucks. I don't have the numbers in front of me, but overall music downloads (from kazaa etc) still dwarft legit music sales.

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spxyu02 wrote:

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Anonymous wrote:
The music store is potentially a huge business, bigger than the iPod. Five or ten years from now, APPL could be selling billions of songs/year. Without having to manufacture anything, just run some servers.

I'm gonna have to disagree with you there. The meat and potatoes of this whole deal will always be the iPods. Apple makes close to no profits selling songs at a buck a piece, and on top of that, music piracy will always be around and probably one step ahead of whatever restrictions companies put on their players (kind of like spammers, virus writers, etc are always one step ahead of the spam blockers and virus updates). So while I think that the store will definitely stay on, as less and less people want CDs and instead will want the convenience of ordering online, I do not think that iTMS will overtake the iPod itself, or even become as huge as you say it will. People will come to find music through cheaper means and there is a cieling to hit in terms of number of songs available that people will actually want.

Billy K wrote:
"Apple's not going to make any money off $50 or $100 iPods. What they'll make money off in the future is licensing - that is, licensing Fairplay. THAT'S why they're so upset with Real. Apple is trying to dominate the market on digital song delivery and the format it's delivered in. Right now, the iPod is what's giving them a good shot at it."

Why make a penny or two per D/L through Fairplay licensing, when (if they can get a better deal from the labels) they could make 50 cents per D/L? They already have 70% of the market. A year from now, after the Moto and HP sales are added, it could be 80%. How much could they possibly make from licensing the remaining 20%?

-Zato

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Billy K wrote:



Sound familiar?

The iPod will cease to make money for Apple in five to ten years. It's called commoditization. Eventally, there will be a basic formula for making a decent MP3 player, and they will get really, really cheap. just like what happened with the Walkman. They started at $200. In ten years, you could get one for $20.

Same thing with PCs. Dell makes like a nickel off their boxes. Same thing that happened to DVD players. Profts are down to a few buck per unit. But DVD manufacturers are raking it in - as are the people who hold the patents to the DVD format.

Apple's not going to make any money off $50 or $100 iPods. What they'll make money off in the future is licensing - that is, licensing Fairplay. THAT'S why they're so upset with Real. Apple is trying to dominate the market on digital song delivery and the format it's delivered in. Right now, the iPod is what's giving them a good shot at it.

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Billy K. wrote:
To be fair, doesn't that make the Dell DJ, Rio, iRiver (etc., etc.) exclusive, as well? They don't play AAC (the #1 legally donloaded format). And I could be wrong, but I don't think they all play OGG Vorbis, either.

Why must Apple open up DRM? They made the investment, they took the risk and now they are reaping the benifits. I see this like a man who goes to a casino and loses all his money (Real), then when he sees someone spend a fair amount and hit it big (Apple), he demands to get a share of the winnings. Not fair Real. Go wither and die, you're an embarrasment to the enitre PNW.

Aren’t we all armchair CEOs ? It’s all very nice and challenging to find arguments for and against Apple’s position in this matter. The one thing most people agree on, however, is that Realnetworks is a deadbeat trying to get rich quick riding on the coattails of the innovator.
Now, Vern, I disagree with you when you seem to imply that because Real came up with their (dis)Harmony PoS, Apple needs to license FairPlay. Of course, SJ said that the iTMS doesn’t make any money, but let’s not forget that this is all part of the Reality Distotion Filed: I’m pretty confident that, even if the money isn’t very big, it IS there. The big investment is now made: the software is written, and it only needs updates; the store has been built, and, as it grows, will need a few more investments to accommodate the growth, but the catalog is expanding, and sales are increasing, while expenses are slowing down: the money inflow is therefore increasing--the more downloads, the better margins. When downloads start coming at 10 million a week or more, the iTMS is going to really rake it in (even at 10-15 ў/song: 1-1.5 M$ per week …). The iPod, however, has a very limited life expectancy, like all hardware. In our day and age, in this domain, three years is a lifetime, and the shelves in Cupertino had better be stocked with the new insanely great thing that will replace it. Licensing FairPlay to hardware manufacturers (HP and MOT) is OK, but to SOFTWARE ? No way, all of a sudden, Microsoft would be buying one of the licensees and that would be the end of it: the features would be incorporated into WMA right away …
Seems to me that Apple needs to keep everything proprietary for a while, as long as the iPod is successful, and until the iTMS reaches a “critical mass” which makes it a real money-maker. Let’s not forget that MP 5 is on the drawing board already, anyway, and that, like AAC is now, it will be an even better compression format, and that 128-bit will sound nearly like CD-quality
and all that with FairPlay …

If Fairplay was licensed, at every online music store you would get a choice, WMA, Real, AAC or Appl or something like that. It would be similar to the choice you get at a movie site, Real, WMP, Quicktime. There would be no domination by any brand. You would just choose the DRMed format that your player uses. No advantage for Apple there.

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jacrav wrote:
Now, Vern, I disagree with you when you seem to imply that because Real came up with their (dis)Harmony PoS, Apple needs to license FairPlay. Of course, SJ said that the iTMS doesn’t make any money, but let’s not forget that this is all part of the Reality Distotion Filed: I’m pretty confident that, even if the money isn’t very big, it IS there. The big investment is now made: the software is written, and it only needs updates; the store has been built, and, as it grows, will need a few more investments to accommodate the growth, but the catalog is expanding, and sales are increasing, while expenses are slowing down: the money inflow is therefore increasing--the more downloads, the better margins. When downloads start coming at 10 million a week or more, the iTMS is g