C|NET Asks Who Will Win the Online Music Wars?

[Jason Dunn]

http://news.com.com/Editors%27+Picks%3A+music/2009-1025_3-5345107.html

"Napster first knocked the music industry on its rear a few years ago by allowing millions of people to freely "swap" digital music files, a practice the courts frowned on, essentially driving Napster offline. While illegal downloading still occurs, millions of people are paying to acquire music legally from Apple Computer's iTunes, Rhapsody, the re-launched Napster and even sites operated by mega retailers such as Wal-Mart. Now mighty Microsoft has jumped into the game, and its deep pockets, tech savvy and take-no-prisoners management could change the game for consumers and competitors. Who are you betting on?"

Who do you think will be the major player in this market a year from now - the one with the most market share? Vote in the poll!

[Jason Dunn]

http://news.com.com/Editors%27+Picks%3A+music/2009-1025_3-5345107.html

"Napster first knocked the music industry on its rear a few years ago by allowing millions of people to freely "swap" digital music files, a practice the courts frowned on, essentially driving Napster offline. While illegal downloading still occurs, millions of people are paying to acquire music legally from Apple Computer's iTunes, Rhapsody, the re-launched Napster and even sites operated by mega retailers such as Wal-Mart. Now mighty Microsoft has jumped into the game, and its deep pockets, tech savvy and take-no-prisoners management could change the game for consumers and competitors. Who are you betting on?"

Who do you think will be the major player in this market a year from now - the one with the most market share? Vote in the poll!

[Janak Parekh]

I think the far more interesting question will be two years from now -- if MSN Music is a success, I still think it'll take more than a year because of iPod's marketshare, etc. For one year, I still think it's iTunes. In that case, I think it's an open field, and Microsoft may very well gain an advantage if they market and evolve the tech properly.

--janak

[Suhit Gupta]

I was just talking about this with Janak over lunch (yeah we are geeks and have nothing better to talk about ). IMHO, MSN music will win because of the flexibility of WMA, because Apple is so stringent with the AAC format and because in terms of interface the MSN music store is about as good as the iTunes store.

Suhit

[Neil Enns]

We need another poll option which is "anything based on WMA" I don't think that any one music store will really come out ahead, but I do think that all of the WMA-based stores will kick iTunes all over the place.

Neil

[bdegroodt]

Seems like this goes back to the old "Does MSFT want to win this market?" question. If so, watch out in 5 years (3 generations of junk first). For my $.99, Mr. Jobs and company win by a long shot.

[Mojo Jojo]

In regards to Apple and being stringent, I am not sure all the cards are on the table when it comes to what Apple is doing and what we know.

If this article is true...

http://www.pcworld.com/news/article/0,aid,117683,00.asp

...then it would show that Apple is playing the field, just that the ones complaining are the ones not being approached. I think after a year of growth and market leadership for legal downloads it gives iTunes and Apple some clout and strength at the bargaining table.

[Felix Torres]

http://news.com.com/Jobs+offered+to+...l?tag=nefd.top

The yellow sheet has bit more detail on the nature of the offer.
Turns out, there is less here than meets the eye:

"Apple, it seems, was ready to open up its iTunes Music Store and make the song downloads there compatible with Sony's digital-music players. "

In other words, Apple offered to supply ATRAC3 downloads via itunes, which is to say they ask Sony to shut down Connect in return for a piece of itunes. In other words, they told SONY to their face: "We know how to sell music onlne better than you."

Which is true but not very polite. ;-)

A more meaningful offer would have been to let Sony players play Apple AAC natively, but that would not have been wise considering the specs of the Walkman jukebox.

[Mojo Jojo]

I don't know... the article on C|net says a little more but not much.

At any rate would you agree that the least you can take from this is Apple is indeed trying to make in roads that will make it a less proprietary service? Why jump at your 'enemies' offer when you can at least explore the waters of your 'enemy's enemy' and perhaps make a friend?

[Felix Torres]

Well, it suggest that, public posturing aside, they really are taking MS somewhat seriously.

But in offering to help perpetuate the ATRAC format they:
- inviting Sony to "make peace with the honorable ancestors" by staying with a non-competitive format past the point when it makes any sense
- maintaining the format balkanization that keeps the market divided

Seems to me that Apple's strategy is to ensure that no-universal file format can appear at all; not WMA (fair enough) *or* AAC (which is puzzling, since owning the universal format would seem to be good for Apple).

As for Sony, their choices are limited:
1- They can assume that the only thing wrong with their strategy is that Connect sucks, which is what Apple was trying to convince them of, and try to fix it or replace it, maybe by buying MusicMatch
2- They can accept that it is ATRAC that is killing them and try to do a Real
3- The can go spend oodles of money and buy Apple
4- They can throw so much money at Apple that Jobs will finally license AAC/Fairplay
5- They can swallow their pride and adopt WMA

It says something that the cheapest and simplest solution is to just license WMA and let their hardware engineers run wild.

At some point, Sony is going to have to decide if they're in the hardware business or the ATRAC business.

[Mojo Jojo]

Originally Posted by Felix Torres

Seems to me that Apple's strategy is to ensure that no-universal file format can appear at all; not WMA (fair enough) *or* AAC (which is puzzling, since owning the universal format would seem to be good for Apple).

But which way do you want them to go with AAC? If past history is any example how would Apple keep AAC a money making venture?

Take Quicktime. Apple invested a lot of money, liscensed it to everyone, and then when they were making money MS stepped in and created their own codecs. So was licensing a good option/business plan?

Not dealing with Apple directly but lets look at browsers. Netscape, Mosaic, open standards that all browsers used and wham, along came MS. Did standards (some what equivellent to open licensing) stop them?

MS is a cake and eat it too company, they win out of force even if you play fair to the industry. You can't sleep with them and not expect to get pushed out of the bed. To beat MS you have to cut them out of the market, and even THEN that doesn't stop them. Clone, rebrand, incorporate, push. The beat goes on.

So Apple keeps the AAC format and brand populariaty to themselves, they make money and are now labeled 'the bad guys' for doing so or they are 'not smart and hubris is going to kill them' for not licensing. So tell me why Apple should open its vaults and invite other companies in to take their cash?

It is my opinion that opening AAC to MS is to make a decision on when you want the profit to disappear. Instead they can choose a different path, make some money (the goal of all public companies) and push thier brand recognition into a different direction that has been lacking in the computer industry but appeals to consumers, style AND extreme ease of use.

Will it work? I think so. Computers have grown stagnant. They don't 'fit' into the general publics lifestyle these days. Here is something to chew on, take you and your family a couple branches out on the tree if you will.

How many times have you been called as the computer expert to fix their problems? What is the ratio of computer savy people to not savy people in your family? Now if Apple markets to the percent that is not savy through style and popular culture, and MS has to overcome their own brutish, geek club, and techinically challeneging type of branding... I think Apple has a shot.

No offense to the geeks out there mind you.