What Apple DRM-Free Means to Microsoft
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Apple's forthcoming DRM-free music deal with EMI raises a simple question: What should Microsoft do to steal some music marketing thunder from iPod and iTunes? |
The EMI deal is probably something Microsoft could have announced, too. But Microsoft has DRM [digital rights management] on the brain, so to speak, as evidenced by anti-piracy mechanisms in Vista, Xbox and Zune (Why is it those products use letters at the end of the alphabet?).
To recap the news: Starting next month, Apple will offer EMI music free of DRM for 30 cents more a track; album prices will remain the same. Apple makes the EMI catalog more attractive than other iTunes music in two ways: No DRM and higher encoding. People paying more for the benefits of no DRM will get better fidelity, too, as in 256kbps encoding. The DRM music is 128kbps. Additionally, consumers can upgrade their existing EMI music to DRM-free and the higher encoding for 30 cents a track.
The deal creates opportunities for Apple and solves some problems, too:
- DRM-free removes some of the usability problems associated with rights management technology.
- EMI music would be more portable, not necessarily locked into iTunes. Unless Apple does some unusual jiggering to AAC, songs in the format could be converted to MP3 for broad availability. There are plenty of devices, including Microsoft's Zune, that can play DRM-free AAC files. Windows Media Player 11 doesn't natively support AAC, by the way.
- DRM-free could ease some of Apple's legal problems in Europe, where some governments have fussed over music monopoly and the closed iPod/iTunes model.
- Apple can upgrade users' music and for a nominal fee. The current 128kbps encoding simply isn't as good as the 192kbps stuff coming from other music stores—at least to this former DJ's discerning ears. Napster upgraded users of its subscription music service to 192kbps from 128kbps for free. Apple offers no subscription service. Now, people who bought EMI music from iTunes could get better—as in higher encoding and no DRM—for 30 cents a track.
Where's Redmond's Response?
Microsoft image makers have pushed J Allard, corporate vice president over design and development for the Entertainment and Devices division, as the cool geek. Heck, a Business Week cover story opened by calling Allard one of Microsoft's "edgy thinkers." No disrespect to Allard, but he hasn't been cutting much Apple with that edge.
DRM is part of problem. With the release of Windows Media 9, Microsoft made a huge bet on DRM. No question, Windows Media 9 delivered highly flexible rights management that could be used for lots of interesting marketing purposes, such as a label releasing a new album with, say, three free plays.
But Microsoft's bet hasn't paid off in the market, even with so many music stores using Windows Media DRM. Apple did DRM better, by largely hiding it from music purchasers, and by making fairly easy the synchronization of DRM content with iPod. Microsoft played catch up on synchronization until the November release of Zune.
But Zune is heavily beholden to DRM. Music sharing—Zune's big differentiator from iPod—requires encryption of transmitted tunes, even stuff that has no DRM. So, Zune applies rights management where it wasn't before. Additionally, some label's rights restrictions prevent users from sharing—what I'll Zuning—some music purchased from the Zune Marketplace.
That also means usage rights aren't consistent across Zune Marketplace's catalog of music. By contrast, Apple has uniform rights, although the EMI deal will change that. The difference: Zune Marketplace restricts some usage rights, while Apple's EMI deal will extend them.
There's nothing exclusive about the EMI deal. In fact, EMI is ready to make its entire catalog available DRM-free in MP3 as well. Apple takes center stage, again, by making an announcement first.
"This is a great PR win for Apple and [CEO] Steve Jobs," Michael Gartenberg, a research director with JupiterResearch wrote this morning in a blog entry about the Apple-EMI deal. "Apple was seen as the company delivering DRM-free music to consumers, a move that will only increase their overall mindshare and of course, mindshare has a funny way of becoming more marketshare."
Microsoft is a master deal maker. No company partners like Microsoft. It's disturbing to see those "edgy thinkers" doing so much thinking and not taking enough action. Microsoft should have been one step ahead of Apple, with a DRM-free catalog of EMI music in Windows Media Audio. More music players, devices and PC software support WMA than AAC.
If Microsoft is going to push ahead with a heavy DRM strategy, maybe it's time to change the game plan. As Gartenberg's colleague David Card writes in another blog post on the Apple-EMI deal, "DRM should unlock new business models, not attempt to lock down 20th century ones." He gives good advice.
Related Posts:
- Jobs Calls for DRM Freedom, Microsoft Watch, Feb. 6, 2007
- Allchin's Windows Media Device Lament, Microsoft Watch, Jan. 21, 2007
- Microsoft's Connect Lifestyle, Microsoft Watch, jan. 7, 2007
- Whoa, Zune Is Social, Microsoft Watch, Jan. 1, 2007
- Welcome to My Social, Microsoft Watch, Dec. 25, 2006
- Zune Chips Away at iPod, Microsoft Watch, Dec. 18, 2006
- Microsoft's Music Madness, Microsoft Watch, Nov. 27, 2006
- Zune Goes to War, Microsoft Watch, Nov. 14, 2006
Comments (12)
Quote from your second last paragraph: "Microsoft is a master deal maker. No company partners like Microsoft."
I think what Daniel Eran from roughlydrafted.com said is more appropriate: "History reveals that partnering with Microsoft is like accepting a dinner invitation from Hannibal Lecter. One might as well just roll in seasonings and jump in the oven." or "...PlaysForSure partners who have realized that joining forces with Microsoft is like offering to help Hannibal Lecter get dinner ready."
Posted by Grant | April 2, 2007 2:45 PM
I can't see what stops Microsoft from doing exactly what Apple is going to do with non-DRM'd music files. Plus Ms could one-up-man Apple by simply selling losless-compressed music.
Also, Xbox Live is working rather well and actually stealing AppleTV's thunder (ATV happens to be a news item because of it being hacked to death up to DivX-Gen's standards, far beyond Apple's), which shows Apple is not that invincible. Plus, it is not as if Apple is stopping being as DRM-heavy as it takes where it counts: cheap mid-fi music tracks, TV series and Disney movies.
Posted by Snafu | April 2, 2007 3:27 PM
"Apple is not that invincible"
Apple had no reason to try and stop people from fooling around with the Apple TV. It's not being sold as a loss like your average Console is, if someone buys an Apple TV and never buys something from the iTunes Store then Apple is much further ahead than someone buying an Xbox 360 and pirating video games.
Posted by Bob Jones | April 2, 2007 4:30 PM
"Microsoft should have been one step ahead of Apple, with a DRM-free catalog of EMI music in Windows Media Audio. More music players, devices and PC software support WMA than AAC."
When was Microsoft ever one step ahead of anyone, especially Apple?
Of course they "should have been" but they weren't. Right now, they "should" get off the music subscription concept. No one wants it. People want to own their own music and vote with their dollars.
If Microsoft wants to join the real world, it should come down out of its ivory tower, look and listen.
Yours sincerely,
John Davis
Posted by John Davis | April 2, 2007 9:04 PM
I will be surprised if MS quickly follows into this DRM free thing. When do they ever want what is best for the consumer?
And are they really that good at partnering anymore. Just the other day didn't HP and few others abandon Windows Media Center? Oops....
And why keep on talking up subscriptions? They don't work. Period. And if they ever did (which they won't), Apple could jump in at any time. Game over.
Apple continues to lock down the music thing more and more each day. And who would have thought that the last piece would be to go DRM free?!!! Now we will see what the market will accept and who will win.
My bet is on Apple.
Posted by brock | April 2, 2007 10:40 PM
Bottom line is - Vista Plain Sucks..!!
I couldn't believe how convoluted some steps are just to perform a simple task - XP will be a hard product to get off of peoples machines - Especially when they find out they can't upgrade without serious hardware upgrades, & drivers if they can even find them.. BTW, the new Apple OS coming out is going to put Vista to shame.. Vista isn't an improvement, it's just Bill's ego looking to "one up" Apple, plus his need for another 20 billion.. Written by a "12" yrs. windows tech..
Posted by Lancelot | April 2, 2007 10:43 PM
I agree with Grant. The Zune debacle has proven that jumping on any Microsoft bandwagon is a very dangerous business decision. MS is a lousy partner, just ask any engineer who ever tried to make a better Windows system.
For Intel, it's been like pulling teeth to get MS to support any of their hardware innovations, and for the Sonys and the HPs of the world, it's got to suck big time to be completely unable to deliver a realiable product. HP used to sell computer systems that were highly respected for their quality and reliability, but in the days of the monopoly that approach simply isn't feasible.
-jcr
Posted by John C. Randolph | April 3, 2007 5:16 AM
I agree with Grant. The Zune debacle has proven that jumping on any Microsoft bandwagon is a very dangerous business decision. MS is a lousy partner, just ask any engineer who ever tried to make a better Windows system.
For Intel, it's been like pulling teeth to get MS to support any of their hardware innovations, and for the Sonys and the HPs of the world, it's got to suck big time to be completely unable to deliver a realiable product. HP used to sell computer systems that were highly respected for their quality and reliability, but in the days of the monopoly that approach simply isn't feasible.
-jcr
Posted by John C. Randolph | April 3, 2007 5:16 AM
The very idea that Apple would do something to the AAC files to stop them playing in anything but iPods just goes to highlight the anti-apple attitude of the author.
If the author did some basic research like look up AAC in Wikipedia they would find that AAC is an internationized standard and does not belong to Apple so they would not be able to change it in any way.
Posted by Declan Lynch | April 3, 2007 1:16 PM
No body partners like Microsoft - How true.
Just ask any one who has tried to deal with Microsoft; especially the small software developers that Ms likes to refer to in their TV ads.
Steps:
1. Sign an NDA that protects Ms but not you;
2. Deliver unprotected content to Ms for "evaluation"
3. Attend a meeting at which you are expected to core dump everything you know to Ms for 0 return
4. Wait for a response
5. Wait for a response
6. Ms makes a vaporware announcement that they are developing a similar product
7. Discover Ms has file a patent application based on you IP
8. Hire an IP lawyer
9. Write a lot of checks
10. File suit
11. Write more checks
12. Settle with Ms for about 1.5 xs your legal expenses.
What a partner.
Posted by Dan Reiss | April 3, 2007 3:54 PM
Zune development appears to be stuck in neutral. I doubt that they will do anything about anything until "Christmas Shopping Season".
Posted by TomT | April 3, 2007 4:25 PM
There's a new Internet disease and its name is John C. Randolph.
Posted by Slippers | January 13, 2008 7:38 AM