Real CEO: "Open iPod to other Music Services"

[Kent Pribbernow]

http://news.com.com/2100-1025_3-5177914.html?part=rss&tag=feed&subj=news

Real Networks CEO Rob Glaser publicly lambasted Apple for locking consumers into its own music download service. Currently the iTunes Music Store only supports Apple's AAC audio format. 95% or all competing services such as Napster, Wal-Mart, and BuyMusic.com all support Microsoft's highly popular WMA audio format....a format which the iPod does not support.

"Apple's (market) share will go down if they continue to do this. The only way to presently put songs on an iPod is to (buy) them from iTunes," Glaser said, referring to downloads purchased from online music stores. In addition to iTunes songs, the iPod can play files encoded in the MP3 format, including tracks ripped from CDs.

Glaser predicted that customers will say, "I bought an iPod and can only shop at one store. What is this? The Soviet Union?"

Although one could interpret this as sour grapes (Real's Rhapsody music service competes with iTunes), I agree with his argument. I've often vented this opinion as well. Apple is making a strategic mistake by locking consumers into ITMS. While Apple's service is far more popular than any other, the entire industry is standardizing on Microsoft's audio format. Which means iPod owners won't have access to competing services, which stifles competition. For example, Wal-Mart recently launched it's own venture, offering tracks for just $.88 while Apple charges $.99. Since iPod owners don't have the option of choosing Walmart, they are at the mercy of Apple to lower prices, which may not happen. If this policy does not change, iTunes could be squeezed out, not by one player, but by the cumulative effect of dozens of competing vendors offering better options and pricing.

[Kent Pribbernow]

http://news.com.com/2100-1025_3-5177914.html?part=rss&tag=feed&subj=news

Real Networks CEO Rob Glaser publicly lambasted Apple for locking consumers into its own music download service. Currently the iTunes Music Store only supports Apple's AAC audio format. 95% or all competing services such as Napster, Wal-Mart, and BuyMusic.com all support Microsoft's highly popular WMA audio format....a format which the iPod does not support.

"Apple's (market) share will go down if they continue to do this. The only way to presently put songs on an iPod is to (buy) them from iTunes," Glaser said, referring to downloads purchased from online music stores. In addition to iTunes songs, the iPod can play files encoded in the MP3 format, including tracks ripped from CDs.

Glaser predicted that customers will say, "I bought an iPod and can only shop at one store. What is this? The Soviet Union?"

Although one could interpret this as sour grapes (Real's Rhapsody music service competes with iTunes), I agree with his argument. I've often vented this opinion as well. Apple is making a strategic mistake by locking consumers into ITMS. While Apple's service is far more popular than any other, the entire industry is standardizing on Microsoft's audio format. Which means iPod owners won't have access to competing services, which stifles competition. For example, Wal-Mart recently launched it's own venture, offering tracks for just $.88 while Apple charges $.99. Since iPod owners don't have the option of choosing Walmart, they are at the mercy of Apple to lower prices, which may not happen. If this policy does not change, iTunes could be squeezed out, not by one player, but by the cumulative effect of dozens of competing vendors offering better options and pricing.

[entropy1980]

Originally Posted by Kent Pribbernow

Since iPod owners don't have the option of choosing Walmart, they are at the mercy of Apple to lower prices, which may not happen. If this policy does not change, iTunes could be squeezed out, not by one player, but by the cumulative effect of dozens of competing vendors offering better options and pricing.

I don't see this happening at all... why? Well because it seems that the strategy is to get people to buy music from ITMS then they buy an Ipod (music sales driving Ipod sales as Apple makes no money on the music they are selling) Walmart should also be noted as losing money on their operation, their main goal is to drive more traffic to their site in hopes you buy other products while you're there. It's the integration that is selling Ipods, you have a product that a trained monkey could setup and operate and a music store and software that's tied together making equally easy to setup. Apple has taken the thinking out of getting your music, then getting it onto a device by making them work with only their product. Apple has always excelled by keeping things working well together because it's all in house. I think people know what they are getting into wheen they buy an Ipod and it doesn't seem to be slowing as you can see by this announcement.

[Raven]

Here's an old article from The Register.

Either way (whether Apple decides to lower song prices or not), the next few months will give us a good look at where Apple's priorities are...

[Janak Parekh]

Originally Posted by entropy1980

I think people know what they are getting into wheen they buy an Ipod and it doesn't seem to be slowing as you can see by this announcement.

Agreed, but I also agree with Kent: long-term, this is a very risky strategy. Apple dominated the GUI market with the original Macintosh, but by tying software to hardware, allowed MS to catch up and surpass them with Windows. The iPod is popular, but you can't assume it's going to eclipse every other device for forever.

--janak

[entropy1980]

Originally Posted by Janak Parekh

Agreed, but I also agree with Kent: long-term, this is a very risky strategy. Apple dominated the GUI market with the original Macintosh, but by tying software to hardware, allowed MS to catch up and surpass them with Windows. The iPod is popular, but you can't assume it's going to eclipse every other device for forever.

Point taken and I think Apple is already planning the next step...
as seen in this article. I don't think you'll catch Apple as flatfooted this time around. They are in it to dominate the music player market they are expected to make a huge amount of money just Ipods I think if they begin to lose any momentum you will see them open up functionality, until then why should they they are leading the market no reason to open it up to anyone else especially when AAC is making some big inroads with not only DVD-ROM consortium this week but also even in Motorola's MPx series supporting it.

[c38b2]

WMA is a proprietary format made by Microsoft no less - why can't the industry standardize on AAC which is based on the MPEG-4 codec? Real's statement makes as much sense as telling Apple to put Windows on their computers which, of course, is unfathomable.

http://www.vialicensing.com/products.../standard.html

[Janak Parekh]

Originally Posted by c38b2

WMA is a proprietary format made by Microsoft no less - why can't the industry standardize on AAC which is based on the MPEG-4 codec?

Because AAC standardization is not enough. We need devices to standardize on FairPlay -- Apple's proprietary DRM layer on AAC -- and as of yet I've seen no inclination on Apple's behalf to even license the darn thing. If they did, I think we'd see consumer manufacturers snapping it up.

WMA is proprietary. And so is Windows. But by decoupling it from hardware, it makes a big difference long-term.

--janak

[klinux]

Originally Posted by c38b2

WMA is a proprietary format made by Microsoft no less - why can't the industry standardize on AAC which is based on the MPEG-4 codec? Real's statement makes as much sense as telling Apple to put Windows on their computers which, of course, is unfathomable.

http://www.vialicensing.com/products.../standard.html

Many people in the Apple camp make this arguement which I don't buy. WMA, RA, ATRAC, and AAC are all as proprietary as one another. You are not free to modify it or distribute its encoder or decoder for free. The term standard is fishy as well because every single company call its codec the standard. Consumers decide what the standard is. If consumer prefers say, DTS over AC3, VHS over Betamax, KDE over GNOME, etc then THAT is the standard.

If VIA wants its product adopted, why doesn't it lower its licensing fees?

[David Horn]

I agree with you here, Kent. Apple annoy me intensely with the iPOD - partly cause it's way overpriced and partly because they've delayed the UK launch of the MiniPod till July.

However, nearly my entire music collection is WMA and it's going to take ages to re-rip it. And I don't like iTunes. How come Apple aren't being pressured by the DOJ for restricting access to other companies?

Finally - and a shot at Real - they drive me up the wall. They complain about Microsoft bundling WMP free with Windows, saying it's bad for them and illegal. Did it ever dawn on them that their software's crap? I will never install something that tries to hide spyware on my PC and pops up ads from time to time. It runs on my Dad's PC so he can listen to BBC radio stations and that's it.

Give me WMP any day.

[entropy1980]

Originally Posted by David Horn

How come Apple aren't being pressured by the DOJ for restricting access to other companies?

Are you out to lunch or what!? Apple is not a monopoly you have many options for MP3 players! If you don't like what Apple's doing don't buy go get one of those "awesome" WMA players! :roll: