On The Guts of a New Machine (Part Two)

My second response to a chunk in The New York Times article The Guts of a New Machine concerns the comments of Rob Glaser from RealNetworks. You can read my first response (on rapid design processes) here.

Three visions of Apple & the music player market in five years:

Nor will music bought through Apple’s store play on any rival device. This means Apple is, again, competing against a huge number of players across multiple business segments, who by and large will support one another’s products and services. In light of this, says one of those competitors, Rob Glaser, founder and C.E.O. of RealNetworks, ”It’s absolutely clear now why five years from now, Apple will have 3 to 5 percent of the player market.”

It’s an interesting position this, but I wonder if it’s true. I mean, the iTunes Music Store has clearly been a bit of a success in the States, even if it’s not going to topple retail CD sales any time particularly soon. An awful lot of people already have tracks from it, and – given Pepsi’s deal to buy and give away 100 million tracks and MacDonald’s rumoured deal for a further billion – a hell of a lot of other people are going to join them pretty soon. It seems clear that if Apple sell or distribute that number of tracks during this early period then it’ll help them sell iPods straightaway. And later it should have an equally positive effect when people come to replaced their devices – the retention levels should be directly improved as a result. At least this much seems obvious – the more tracks you own, the more you then have to lose by transferring to a player that can’t read them.

Now that’s already a different sense of the future than that held (in public) by Rob Glasner. And it doesn’t take a genius to try and push that a bit further. Given the scale of their lead, you could easily argue that the possibility exists for Apple to create de facto bought-music standard that is attached exclusively to their products. They’ll have a lock-in. At which point the question emerges – how long is it in their best interests to maintain it?

Now, I’ve painted a fairly rosy picture of Apple’s use of DRM and non-device-independent music files so far, but there are clearly disadvantages as well. History has shown us (with a few notable exceptions) that unless consumers and companies have little or no choice about whether to use them – things based on non-proprietary and vaguely open standards seem destined to ‘win’ in the long-term. They’ll get used on the most devices and in the most interesting and dynamic (and obviously inexpensive) ways. In fact just last year I was arguing that Apple’s resurgence was a direct result of steering away from this kind of proprietary activity (Apple and the Pirate Everyman). Their moves towards open standards seemed to be based around creating the best hardware and software for exploiting the (perhaps problematic / perhaps not) confusions and collapses around intellectual property.

But of course there’s no reason why the style of DRM’d AAC that Apple use couldn’t be subsequently opened up as an available format for use in other devices. And I don’t doubt that if there was an economic rationale for doing something like that then they’d do it in a heart-beat. Say – for example – the restrictions were stopping more people buying the devices than they were retaining. So with that in mind, here are two more very very lightly-sketched out possibilities for Apple’s future treatment of their DRM’d non-device-independent AAC format:

(1) Apple have leveraged their current dominance in legal downloads and players into a technology that they (perhaps) license to other players resulting in a situation like with plugins or (kind of) like Microsoft OS’s, where almost no music player in the world can afford not to pay to play Apple Music Store tracks (compensating for the corresponding loss in iPod sales). (2) They just open the doors to other companies building players that can play Apple Music Store tracks. There are clearly technology issues around both of these issues (like – I believe – the way that the sale and subsequent approval of Music Store tracks are handled over the internet direct with Apple. But fundamentally, I can see no reason why the current chain between track and player could not subsequently be broken (or reinforced) according to the needs of the market.

Importantly, I’m not going to articulate my position on whether Apple’s DRM-based, non-player-independent approach to the selling of music is the right or most moral one. If you find these issues interesting, then Jim Griffin and Cory Doctorow have a lot to say about it in a variey of places, including in the Aula Exposure book.