Steve Jobs Back To Being A Fan Of DRM In iPhone 'Bundle'?

from the let's-pretend-we're-bundling-music... dept

This has been rumored for some time, but the Financial Times is reporting that Apple is trying to negotiate with the record labels for a new offering that would provide access to music as a bundle with an iPhone. The idea is that you could buy the iPhone and get "unlimited" access to music, either in a lump sum or with a subscription fee. Of course, there are some rather important caveats. While this would get a lot of attention, you only get access to the music for the lifetime of the device or subscription (if you didn't pay a lump sum). While there's a small concession that you'd get to keep 40 to 50 songs after the device died or the subscription ended, you'd lose the rest of the songs. In other words, despite Steve Jobs' supposed dislike for DRM, this music would be quite DRM'd. Limited subscription plans have been around for ages and they've never gone very far because of those limitations. People know better by now, and so should Steve Jobs.

Filed Under: business models, drm, iphone, itunes, music, steve jobs, subscriptions
Companies: apple

Apple Sued Yet Again For Patent Infringement Over iTunes/iPod

from the promoting-what-kind-of-progress,-exactly? dept

Apple has been sued over and over again by companies claiming to hold patents on some of the most basic concepts found in Apple's iTunes and iPod offerings. However, given Apple's seeming willingness to pay up to settle such suits, it really shouldn't be a surprise that more companies are coming up with even more ridiculous patents to sue over. The latest is from a company named ZapMe which claims to hold a couple of patents that it says covers iTunes and the iPod. Of course the company is demanding an injunction and damages, though it seems unlikely that a court would ever grant an injunction. As for the patents themselves one was granted back in 2006 and the other came earlier this week. The newer patent is actually a "continuation" patent, a process that has been widely abused by some patent holders to adjust older patents to make sure they cover newer technologies. The Patent Office has been trying to put some limits on continuations, but a court recently wouldn't allow them to put the new rules in place. Take a read through the patent itself and explain, please, how this possibly served the purpose of furthering innovation?

Filed Under: continuation patents, ipod, itunes, patents
Companies: apple

Giving An Allowance Patented: Acacia Sues Apple

from the giving-allowance-isn't-prior-art? dept

Acacia is a well known patent hoarder, who buys up or licenses various unused patents and sets up subsidiaries who do nothing but sue companies in the market who actually make products. The latest Acacia lawsuit has been filed against Apple for the "allowance" feature in iTunes that allows someone to transfer a dollar amount of iTunes credit to someone else -- effectively allowing a parent with a credit card to issue some "allowance" for a kid to purchase iTunes. You would think that such a concept wouldn't be patentable, given the history of parents giving kids an allowance -- but apparently the folks working in the patent office never received allowances as kids. The patent itself seems rather straightforward, but it's difficult to understand why such a thing is patentable in the first place. In the Teleflex v. KSR ruling the Supreme Court noted that the patent office shouldn't just approve patents on combining obvious ideas. Mixing the internet with allowances would seem to fall into that camp, though this patent was issued prior to the Supreme Court ruling.

Filed Under: allowance, itunes, patents
Companies: acacia, apple

Antitrust Lawsuit Wants To Force Apple To Add WMA Support To iPods

from the right-diagnosis-wrong-solution dept

We've noted a few times that people have gotten way too trigger-happy about invoking antitrust law any time a company does something they don't like. Antitrust law is supposed to prevent the abuse of actual monopolies like Ma Bell. It's not supposed to be an all-purpose weapon to be used against any company whose market share exceeds 50 percent. A lawsuit filed on New Year's Eve claims that Apple has violated antitrust law by declining to license the WMA DRM format from Microsoft for the iPod. There are several obvious problems with this. In the first place, while Apple has undeniably dominated the market for portable music players, there's no shortage of competition. Big companies like Microsoft, Sony, and Samsung make competing MP3 players. Consumers who don't like the formats supported by the iPod have no shortage of alternatives. Second, it's really not a good idea for the courts to be getting embroiled in technical debates over what formats devices should support. The issues involved are complicated, and the market evolves quickly. By the time the courts get around to making a final decision, the issue is likely to be ancient history. Third, it's hard to fault Apple for failing to support WMA-based DRM when even Microsoft itself broke compatibility with its old DRM scheme when it introduced the Zune. Surely if Microsoft can't be bothered to support its own audio format, it's hard to justify forcing Apple to do so.

It's also worth noting that none of this would be an issue if the DMCA didn't give digital rights management technology the force of law. This sort of thing isn't a problem with non-DRMed music formats because there are plenty of tools out there for converting from one music format to another. Without the DMCA, there would be similar tools for converting copy-protected music to the appropriate format. But under the DMCA, such a tool would be an illegal "circumvention device." Repealing the DMCA's anti-circumvention provisions is a much better solution because it would give consumers the freedom to play their music on the device of their choice without getting the courts involved in the messy business of deciding which MP3 players have to support which audio codecs.

Filed Under: anti-circumvention, antitrust, dmca, drm, itunes
Companies: apple, microsoft

Apple Wants To Make DRM Extortion Explicit

from the fair-use-costs-extra dept

For years, DRM critics have been arguing that the technology isn't so much about stopping piracy as it is about taking away traditional fair use privileges and then selling them back to you. I've agreed with this for a while, but I never thought I'd see a major DRM vendor admit it so candidly: Steve Jobs has apparently been pitching Hollywood studios on the idea of selling "premium" DVDs that include an iTunes-compatible version of the movie. For an extra $3 or $4, you can buy the privilege of playing your legally-purchased movie on the device of your choice—well, the Apple-manufacturered device of your choice, anyway. Only the DMCA makes this kind of extortion possible. Tools like HandBrake make it possible to convert a DVD to an iPod-compatible format without any help from Apple, but Handbrake is an illegal "circumvention device" under the DMCA. Compare that to the CD, which was developed long before the DMCA and comes without copy protection. The courts have held that "space-shifting" your CDs to a portable music device is a fair use. So you can legally import your CD collection to your iPod, or any other device, without paying a penny. But Steve Jobs apparently wants to charge you $4 for the privilege of doing the same with your DVDs.

Filed Under: business models, drm, itunes
Companies: apple

Universal Music's Plan To Take On iTunes: Bring Back PressPlay And MusicNow!

from the wait,-that-sounds-familiar... dept

Business Week has the story that Universal Music's Doug Morris is planning to take on iTunes by bringing together the major record labels and having them set up their own music subscription service, and then having ISPs and mobile operators force customers to opt in. First of all, it should be pointed out that this same story broke a month ago about Universal Music's plans for a subscription service by the site Digital Music News. It just that this is from a more established publication. When the initial report came out a month ago, we detailed why it wouldn't work, and there's no indication that anything's changed. Doug Morris has shown repeatedly that he doesn't understand the economics at play, and is simply looking to squeeze as much money as possible in the short term, without any kind of long term strategy.

However, what's most amusing about this is that it looks like it's going to merely be an update of the last time the record labels tried and failed to do something similar. The big labels all teamed up to create the services MusicNow and PressPlay, which became better known as MusicNot and PressPause. That's because they were created by companies who were too scared of cannibalizing their existing business. It took Apple to come along and show them how a music service could be done. While you can hope that they've learned something, Morris's repeated statements on the economics of music suggest he still hasn't figured it out. He might want to talk to his bosses at Vivendi, who seem to understand that selling music isn't the business model the company should be in. In the meantime, as was noted a month ago, there's still not the slightest shred of evidence that ISPs or mobile phone operators are willing to force all their customers to opt into a $5/month charge for music subscriptions.

Filed Under: itunes, music, record labels, subscriptions
Companies: apple, riaa, sony bmg, universal music, warner music group

CBS More Focused On Keeping Fans Happy

from the keep-the-fans-happy,-and-business-models-work-out dept

It's fascinating to watch the different approaches that competitors NBC and CBS are taking to dealing with the online video market. NBC has seemed almost to have a new strategy every day, happily putting videos up on YouTube, pulling them down from YouTube, being happy with YouTube, being upset with YouTube, putting videos on iTunes, pulling them down from iTunes. It's as if NBC doesn't have a real strategy at all -- or, at the very least, different factions within the company "win" every few weeks or so. In contrast, you have CBS, who recognized the importance of online video at nearly the same time as NBC. However, rather than going with a constantly shifting target, CBS's strategy has evolved in a pretty straight line. The company quickly realized that distribution and awareness was a lot more important than protection and focused on getting videos available wherever people wanted to view them (not just where CBS could control everything). That meant syndicating the content as widely as possible and even embracing the benefits from people sharing CBS content on YouTube and other sites. That's why it's not too surprising to hear CBS' Les Moonves respond to questions about NBC's decision to take its content off iTunes by saying that CBS is thrilled with iTunes and sees no reason to follow NBC's decision. The really telling statement is this one: "We look at iTunes as much as a promotional vehicle for our shows as a financial vehicle." That's why NBC is focused on putting up barriers for viewers, while CBS appears to be focused on taking them down.

Filed Under: itunes, online video, piracy, tv
Companies: apple, cbs, nbc

Apple Announces New iPods, Cue Fanboy Frenzy, Navel-Gazing

from the ihype dept

Apple refreshed its iPod line today, announcing the long-expected touchscreen iPod among other things. The event was pretty wide-ranging, with a lot to chew on. The biggest early news was the announcement that iPhone owners will be able to create ringtones from songs they've purchased from the iTunes Music Store... for an additional 99 cents on top of the cost of the downloaded track. Perhaps this is an attempt by Apple to throw a bone to disgruntled record companies, but it's likely to call attention to legions of mobile handsets other than the iPhone that will let user set MP3s and other types of audio files as ringtones for free. Apple also sliced the price of the 8GB iPhone by $200, to $399 -- indicating that demand has slowed as demand among diehard Mac fans and other early adopters has been filled. The price cut is probably also a reaction to the iPod Touch, which appears to be an iPhone without any phone, and a similar 8GB model of it has been priced at $299. This may prove to be an attractive alternative to the iPhone for many users, since it has a fairly similar feature set, outside cellular connectivity, including WiFi web browsing -- but comes at a lower upfront cost, plus without the need for a long-term contract with AT&T.

Perhaps the most curious announcement, though, was news of an Apple partnership with Starbucks. iPhone and iPod Touch users will eventually see an extra icon on their screen when they're within range of a WiFi-enabled Starbucks. The application it leads to will allow them to see what songs are playing in the store, and buy them from the iTMS, and they can also access the iTMS without having to pay usage fees for the hotspot. On the face of it, it's a pretty underwhelming offering, just like all of Starbucks' previous attempts at digital music downloads, and the fact that Steve Jobs claimed Apple had been working on it for two years is hardly reassuring. Despite Jobs' contention that the service is "very cool", it's hard to see it selling more iPods, or making much money on its own.

Filed Under: iphone, ipod, itunes
Companies: apple, at&t, starbucks, t-mobile

iTunes Partners Starting To Get Fidgety

from the let's-go-month-to-month,-please dept

It's no secret that the entertainment companies have been less than thrilled with the power position wielded by Apple with iTunes. They've tried -- and failed -- to force Apple to change its pricing (even though that sounds quite a lot like price fixing) and they generally seem upset that Apple is getting all the credit for revolutionizing the digital music world, while people look on the big entertainment companies as out of step with what Americans want while struggling to hang on to an antiquated business model. With that in mind, it wasn't all that surprising last month to see Universal Music refuse to renew its contract with Apple, preferring to go on the equivalent of a month to month basis. Universal Music also didn't include Apple in its trial of DRM-free downloads -- which is doubly amusing since it was only following the stringent demands of companies like Universal Music that Apple agreed to use DRM. Now it seems that the separate company NBC Universal is following the lead of its former sister company. The company is refusing to renew its iTunes deal for offering downloadable NBC TV shows. Of course, this news also comes as we inch closer to NBC Universal's own video website, officially named Hulu so hoarding videos for itself may be part of the strategy (which would be typical backwards thinking, but that comes as no surprise). It looks like, once again, we're basically going to have a totally fragmented market for online video. That certainly wouldn't be good for Apple, but it would likely hurt NBC Universal too. In the meantime, though, Apple may be facing a challenge as more companies fail to renew their contracts. Update: Apple seems to believe that NBC Universal needs Apple more than the other way around. Rather than waiting for NBC to pull its shows, Apple has apparently kicked them off.

Filed Under: itunes, music
Companies: apple, nbc universal

Universal Music To Test DRM-Free Sales, But Perhaps For The Wrong Reasons

from the nose-cut-spite-face dept

Following the lead of rival record label EMI, Universal Music says it will later this month begin selling DRM-free music downloads through a variety of sites -- but not through Apple's iTunes Music Store. Apple and Universal have a long-running spat which culminated in Universal's refusal last month to to renew its iTunes Music Store contract. While its music is still sold through the store, Universal could yank it at any time. Universal's decision not to give Apple the unprotected tracks seems like little more than an attempt to reduce its influence in the music market -- which is a little ironic, considering that it was the record labels' insistence on using DRM that made Apple so powerful in the space. Making the unprotected tracks available through other retailers is about the only way that Universal can fight back, but it's hard to see the benefit in not selling the product through iTMS, given its popularity. The problem for Universal is that few people pay attention to what label artists' records are on, so they're not going to go, "Oh, 50 Cent is on Universal, so I should go to Amazon to buy his unprotected MP3s." If they're an iTMS user, they're generally just going to look and see if the 50 Cent songs they want are available there, then download them. In that case, they're going to purchase the cheaper, DRM-encumbered track, since it's what's available, and Universal misses out on the chance to sell them a higher-priced unrestricted track. The core of the label's disagreement with Apple is pricing -- but their attempt to strike some sort of blow against the company will, in all likelihood, only end up hurting themselves.

Filed Under: entertainment, itunes, music, record labels
Companies: apple, emi, universal music