Apple-EMI deal dooms WMA? Huh?

Since that last post, I’ve seen a couple other articles suggesting that Apple’s decision to offer DRM-less tracks in the AAC format is going to strike the death blow for Microsoft’s Windows Media Audio (WMA) format.

Everybody loves a “Microsoft is losing” headline, but these articles are just stupid. Why?

1. If device makers had thought they could steal iPod users by supporting AAC on their devices, they would and should have done so long ago. The huge majority of AAC files on people’s computers are unprotected files from CDs ripped in iTunes, not from the iTunes Store. (This is why the Zune natively supports AAC.) Removing DRM from a miniscule percentage of the overall number of AAC tracks out there doesn’t change the equation a bit. (In fact, if I were a player manufacturer, I’d support as many formats as I could afford to license so the user would never have to think about formats at all. Isn’t the idea maximum ease of use?)
2. These writers seem to assume that the Apple-EMI deal will remain exclusive. I doubt that’s the case. EMI wants to sell tracks as broadly as possible, even to the tiny percentage of Zune users out there. Assuming they believe removing DRM will sell more tracks, why not allow Microsoft to sell DRM-free WMA files on the Zune Marketplace? And allow Napster, and Yahoo Music, and whomever else to sell DRM-free files in whatever format they choose. These folks would be happy to sell DRM-less tracks—like nearly every other digital media player, they support DRM because they have to, not because they want to. It’s costly to implement, alienates consumers, closes off interesting scenarios that might make users more prone to buy new digital media products, and so on.
3. The Business Week writer talks about Microsoft’s “expensive licensing terms” for WMA. But AAC comes with licensing terms as well! And they’re more expensive for device makers than WMA (at least according to Paul Thurott).

News flash: Apple chose to make this deal for AAC because they’ve already licensed that format, and the iTunes infrastructure is probably built to deliver files in that format, and it’s a much more efficient (filesize for quality) format than their other option, MP3. Which, by the way, comes with licensing fees as well.

The undercutting of the PlaysForSure music store partners probably did more to hurt WMA than this deal will. And Microsoft doesn’t care because those stores weren’t selling many songs anyway, and Microsoft has plenty of other ways to push the Windows Media format—native support in every PC and Windows Mobile device shipped, Xbox Live Marketplace (for video), MSN Video, Zune Marketplace and so on.

But everybody loves a “Microsoft’s doomed” headline.

EMI offers DRM-less tracks through iTunes

Both Jobs and EMI have been telegraphing this move: for $1.29, you can now get all songs in EMI’s digital download catalog as 256kbps AAC files with–ta-da!–no DRM. And while Lefsetz is pissed that that they raised the price for these tracks, I like it as the first small step away from the record industry’s self-defeating efforts to control user behavior with inept and unfriendly technology.

Wired columnist Eliot van Buskirk, anxious for any headline that portrays Microsoft as loser, seems to miss an important point: the Zune natively plays AAC files. That’s right–along with going into direct competition with the players and stores that have long supported Windows Media Audio (WMA), Microsoft went and supported the file format favored by its number-one competitor. Sure, Microsoft would have liked to establish WMA as the de facto standard, but it’s basically acknowledged that particular war is over, and it’s lost. Microsoft is not even pushing WMA for telephone handsets anymore–instead, it’s gone and built a generalized DRM system (or “content access” technology as they call it) and will let the carriers apply it to any file format they want–including AAC.

In other words, Microsoft just hopes you buy a new PC to store all your digital media files. They’re not as concerned as they once were about what format those files are in.

DRM deathwatch, continued

Steve Jobs has always struck me as a Zen-styled capitalist charlatan, kind of like Jerry Brown with money. Nonetheless, he has earned my enduring respect with this open letter to the music industry, in which he suggests that DRM-protected music files should be abolished. The nut: “Why would the big four music companies agree to let Apple and others distribute their music without using DRM systems to protect it? The simplest answer is because DRMs haven’t worked, and may never work, to halt music piracy.”

Shows a lot of confidence in the iPod as well–DRM lock-in is one frequently cited reason why users won’t switch. I guess Apple created FairPlay simply because they didn’t want to license another DRM system. For example, using Windows Media DRM would have required them to sell songs in the Windows Media Format, which means the iPod would have to be able to play that format, which means Apple would have had to pay Microsoft royalties on every iPod sold (up to a cap of $1m per year, which is peanuts now but probably seemed like a lot at the time).

Meanwhile, a blogger at 10 layers has looked at current earnings growth and extrapolated into a future where Apple’s revenue surpasses Microsoft’s. I say it won’t happen–it would require iPod growth to continue at its current clip (impossible) or for Apple to have one or more huge hit products (very unlikely) or for Microsoft to stop growing completely (very unlikely). Still, it’s striking that Apple’s revenue is 50% of Microsoft’s today. Unimaginable 10 years ago.

CES vs Jobs

Attended CES this year for work, and was one of those who felt like they went to the wrong party. While Apple was busy introducing what will inevitably be the most-talked-about product of the year (albeit vaporware at this point–they never used to do that!), Microsoft was busy acknowledging that the copy-restriction capabilities in Vista will in fact mean that you’ll probably have to buy new hardware–including an HDCP-compliant monitor–to play most forms of high-def video on a Vista PC.

I’m not sure that Peter Gutmann is completely right about Vista’s anticopying provisions ruining the entire computer industry, but Microsoft’s assurances to me in 2005–“oh, many content owners won’t even use these copy-protection provisions” (so then why did you build them in?) — are appearing more and more like desperate spin (formerly known as “bullshit.”) So Vista as home entertainment hub could be dead on arrival. Why buy a new $3,000 system when you can add individual, locked-down components (DVD player, HD cable set top box) to your existing system? Are benefits like being able to track your fantasy football players in real time while you watch the games and highlights really worth swapping out your whole system? (Of course, it won’t make a bit of difference to sales–every new consumer PC will come with Vista Home Premium whether you choose to use all the features in it or not.)

That said, Microsoft’s Home Server announcement was actually pretty interesting–automatic nightly backup, storage of all your digital media files, capacity only limited by the size of drives you add (HP’s hardware features four swappable drives, plus 4 USB connectors for additional drives), remote access via a URL (albeit tied into Windows Live Domains, which lets you register your own domain name via a third-party in Melbourne Australia, and was kludgey as hell when I tested it for Office Live), health monitoring of PCs on your network. They purposely left out firewall software, reasoning that you wouldn’t want to reconfigure your network, but simply add a storage device to it. They also left out security and auto updating, reasoning that a lot of people have laptops and want to be secure even when they’re not connected to the home network. Reasonable. ALso, it’s not a domain controller, which means you’ll still be using local accounts on each PC…essentially, it’s just a shared folder on a new box.

But the thing they haven’t announced yet, which will make it really attractive, is the price. Let’s just say cheaper than the cheapest PC. Priced more like a consumer electronics add-on.

Now, sure, as a friend pointed out to me, you can do similar things online. But most of those services have pretty low storage limits–25GB for the free version of MediaMax seemed to be the limit–and rely on you having a fast Internet connection. Personally, I’d rather rely on my home network.

iPhone

It’s the fifth anniversary of the iPod, giving the press plenty of excuse to write another “Franco’s still dead” story about the phenomenon of our time. Slate has two today, one about how the iPod isn’t revolutionary but merely an evolution of the Walkman, and another about how combination phone-musicplayers such as Nokia’s new N91 will knock the iPod off its perch.

Both miss a really important point: it’s the software, not the hardware! MP3 players predate the iPod by several years. There are literally dozens of Windows Media-based players that are cheaper and offer more features than the iPod. Why have they all failed against the iPod? Sure, the white shiny box looks cool, and the font in the UI reminds people of their first computer (which was a Mac…unless you were a programmer or a masochistic DOS devotee). But the real advantage comes from the iTunes software that iPodders use to collect songs from the hard drive, acquire them from Apple’s online store, arrange them into playlists, and transfer them to the device. It’s simple, attractive, intuitive, and works correctly. The Windows Media Player, as every 20-year-old knows, sucks in comparison.

This fact completely sinks Slate’s article about the N91. The author, a Mac user, probably hasn’t had much experience with the Windows Media Player, as he breezily states “PC users can get even smoother integration—the N91 connects directly to Windows Media Player without the need for an external application.”

But the other thing that this guy and all the other writers who’ve proposed that the musicphone will kill the iPod are missing: convergence never works. Over and over and over, consumers have shown that they would rather buy multiple devices, each of which does one thing well, than a single device that does nothing well. When I reach down to skip a song, I don’t want to accidentally dial my mom. When I want to call my friend Barry, I don’t want to start playing a Barry White song. No matter if the UI designers are geniuses, a combination device is by nature too confusing, and the “sacrifice” of carrying two devices isn’t really a sacrifice at all.

That’s not even getting into the business side of it. Carriers want you to buy their ridiculously overpriced songs directly over the air from their stores and charge you extra data fees for doing so, not buy them from an online store and transfer them to your PC. So they’ll be reluctant to stock these things. So they don’t want to stock any phone that actually duplicates the functionality of an iPod. Even if Apple comes out with the rumored iPhone, probably they won’t have agreements with all the carriers–will I really want to switch my coverage from Verizon to Cingular just so I can get a combo device? No. I want the best phone with the best coverage for making phone calls, and the best music player with the best features for playing music.

If Apple’s really expecting to sell 25 million iPhones next year, they’re smoking crack.

Gear that sucks

Maybe it’s my imagination, but it seems that when I used to buy electronic equipment, I could have a reasonable expectation of it lasting for a few years.

I had a cheap-o Sony CD player that lasted about 10 years, and the only reason I replaced it was because it inserted a layer of noise in certain CD-R.s (I think it was some copy-protection scheme, since it didn’t simply refuse to play, but actually added layer of static that rose and fell in volume…and the problem never appeared in other players, such as my car or Bose portable…thanks, Sony!). I have my grandparents’ 27-inch Zenith TV, it’s got to be 15 years old and having no problems. My VCR lasted about 8 years before it started eating tapes. I have a Gallien Krueger 800 RB amplifier for my bass, it’s from the early 1990s and completely bulletproof. My six-year-old desktop PC, which was put together by Hard Drives Northwest (a local whitebox manufacturer) is still running great, despite an OS upgrade, lots of software and hardware installs and uninstalls, and years without antivirus software (I run Firefox and the free level of AdAware for spyware, and scan monthly using the free Trend Micro scanner…the whole AV industry’s a well-orchestrated scam, but that’s another topic).

But most of the stuff I’ve gotten lately has sucked.

1. iPod sucks. I got a 20GB fourth-gen iPod for my birthday in October 2004. One year later, the hard drive is dying–it often lags and has totally frozen a couple of times. I took it into my local Apple store “Genius Bar” and the condescending pretentious long-haired jerk tried to reinstall the system software, failed, and told me “we’ll give you 10% off on a new one.” (I managed to save it that time by reinstalling the software at home, but it’s failing again.)

Wait a second—my (overly generous) parents paid $299 for a cute package containing a hard drive, audio digital signal processor, two-color LCD, and headphones. And it lasted just over one year. Piece of junk.

(Aside: this is the main reason why I’ll never buy another Mac, even though the software’s usually better than its Windows equivalent. Faulty hardware that’s completely non-serviceable. I once had a Classic II whose hard drive died after a few years. Irreplaceable—you need special tools just to get the damn thing open. Apple’s the king of planned obsolescence.)

2. Notebook PCs (still) suck. I should have known better–I’ve been telling people for years that laptop PCs are unreliable, then I have to go and drop four grand on one.

I had been thinking about getting into some multitrack hard drive recording. At the same time, I had simpler needs, like being able to work anywhere in the house and wanting to record my record collection digitally. This required a notebook.

I mulled getting a Powerbook, but they say the G4s aren’t quite up to snuff for serious recording. I thought about an Alienware, but was worried that the company wouldn’t be in business through the life of the warranty, so finally made the safe choice and bought a Dell with a four-year support contract. This is a top of the line machine, the XPS Gen 2, built for gamers. I added a notebook soundcard to go with it, figuring I could start by converting my records. If that worked, I would consider getting a breakout soundcard with FireWire connection, which you need for multitrack recording.

Long story short, every time I jostle the computer or touch the soundcard, or so much as breathe on any part of it while an audio file’s being recorded (that is, if it’s in memory and hasn’t been saved to the hard drive), it bluescreens. Total memory dump, forced restart. The help screen says it’s a driver problem (surprise). I downloaded updated drivers for the soundcard. Problem not fixed. Dell support was completely unhelpful, and frankly I’d rather reboot and suffer than send it back to them since I know the problem arises from non-standard hardware (the soundcard) on a slapped-together system. Yes, even a four-grand notebook from Dell is still a just-in-time mass-produced piece of equipment.

What’s the point of having a mobile recording system if it’s not mobile? Needless to say, I won’t be using it for recording…although I don’t want to buy a Mac either given my experience with Apple. Sigh.

3. Xbox 360 sucks. I’m lucky. I got a free Xbox 360 through work for evaluation purposes. Free games too, including Project Gotham Racing 3, and a free one-year Live subscription. Lucky me.

The games look absolutely beautiful, even on a standard definition 15-year-old 27-inch Zenith. The Live experience is addictive and reasonably easy to set up (although there’s some poor documentation about connecting it to a WEP-enabled wireless network).

Unfortunately, the early stories are true: the box itself is a piece of junk. I got about 10 hours of gameplay, and maybe about six hours of DVD playback before it started failing. Now, I can play a game for about 10 minutes before it blackscreens. Or I can watch a DVD for about 20 minutes before it blackscreens. Xbox support was, unsurprisingly, completely useless (“have you cleaned the connectors?”).

The really sad part is they had previously sent me another unit, but asked me to send it back because they anticipated it would have problems connecting to Xbox Live. In other words, I am 2 for 2 in terms of defective 360 units. And they haven’t bothered to replace the second one yet–I guess the launch is over, I’m done writing my articles and being quoted in the press, so they suddenly have no use for me.

I not only sympathize with the guy who’s suing Microsoft–if I’d spent $600 on all this, I’d be incredibly angry–but I think he might have a case. Why has Microsoft pulled back on their initial sales expectations? Because they can’t ramp up production as quickly as they thought they could. Why’s that? Surely they estimated demand and planned sufficient manufacturing capacity before the launch, didn’t they?

Of course they did. But I bet they’ve uncovered a severe defect in one of the components, or in the way the boxes are designed, and they’re having to do a major reset. (Sound familiar?)

4. GK (now) sucks. For a while I was in three bands, each with its own practice space. Since not all of those bands had bass gear for me to borrow, I needed a small mobile amp for practicing. One of my bandmates had been allowing me to use her GK combo amp and it sounded great, and I love my old GK head, so I bought a GK Backline 110 for a couple hundred bucks. 70 watts, 10-inch speaker, weighs about 15 pounds. Just a little practice amp. Much easier than hauling around a 90-pound speaker.

I played it literally four times before it totally failed. When I took it in to the warranty repair shop, the guy shook his head. “We see these all the time. You know, the old ones used to be really good, but in the last couple years they’ve gone way down in quality.”