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| Sunday, August 01, 2004 |
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No Synchronicity for Apple, RealNetworks
Friday, July 30, 2004; 9:47 AM
Apple Computer came out with some honest-to-goodness fightin' words against RealNetworks yesterday, accusing the company of hacker-like tactics because it released software that allows people to play songs from the Real online music store on the iPod and other digital music players.
That's a big deal for Apple, the proud -- and protective -- parent of the iPod, especially because the little musical miracle is responsible for bolstering Apple's recent sales. But RealNetworks is not backing down, claiming that consumers should decide how they want to enjoy their music downloads.
RealNetworks likened its new Apple-compatible service to Compaq's first IBM-compatible PC. "We are absolutely in the right here legally and once more we are doing the right thing for the consumer," RealNetworks chairman and chief executive Rob Glaser told CNBC yesterday, claiming that the Apple-compatible songs Real is selling through its new Harmony song download service are a higher quality than Apple sells. He contended that Real has made songs compatible with many devices, the iPod included, in a legal way.
Apple's response? Picture chief exec Steve Jobs, steam rising from his ears. "We are stunned that RealNetworks has adopted the tactics and ethics of a hacker to break into the iPod, and we are investigating the implications of their actions under the [Digital Millennium Copyright Act] and other laws," Apple said in a statement. Expect Apple's programmers to work for a fix to block RealNetworks's Harmony songs from working on iPods soon. It's "highly likely that Real's Harmony technology will cease to work with current and future iPods," Apple said.
The Associated Press said "Thursday's caustic reply suggested Apple was prepared to jealously guard its iPod franchise." Yeah, no kidding. iPod has been a cash cow like no other for Apple, which has seen its Macintosh computer sales continue to slide against growing sales of Windows-based PCs.
"While RealNetworks is the first company besides Apple to sell songs in the protected iPod format, other companies sell them in the MP3 format, which the player can also use," the New York Times reported. "Richard Doherty, a computer industry consultant and president of Envisioneering, said the dispute between Apple and RealNetworks intensified the debate about control over the sale and downloading of music. 'Both companies seem resolute in their positions,' Mr. Doherty said." As for the DMCA violation charge, "RealNetworks responded that the copyright act, passed in 1998 to address the issues surrounding the distribution of digital content, explicitly permits the development of software that can share data with programs from other companies."
The San Jose Mercury News quoted Jessica Litman, a professor of law at Wayne State University as saying "Apple has a 'pretty good argument' that Seattle-based RealNetworks is at odds with the Digital Millennium Copyright Act. The 1998 law makes it illegal to circumvent technological measures designed to protect copyrighted works. Litman said the DMCA allows companies to tinker with technology to develop a compatible file format. But there's no protection for trafficking in a technology designed to circumvent these protections, she said."
Reuters said "Apple has aggressively fought against software developers who develop ways to get around the FairPlay protections, which regulate where and how files downloaded from the iTunes Music Store can be played. Analysts were relatively unconcerned about the legal implications for Real, which so far has released the new "Harmony" software on a limited test basis. To date, Apple has sold more than 4 million iPods, which now account for about 12 percent of its revenue. More than 100 million songs have been downloaded from its online music store."
RealNetworks released a statement yesterday, echoing Glaser's remarks. "Harmony creates a way to lock content from Real's music store in a way that is compatible with the iPod, Windows Media [digital rights management] devices, and Helix DRM devices. Harmony technology does not remove or disable any digital rights management system. Apple has suggested that new laws such as the DMCA are relevant to this dispute. In fact, the DMCA is not designed to prevent the creation of new methods of locking content and explicitly allows the creation of interoperable software. We remain fully committed to Harmony and to giving millions of consumers who own portable music devices, including the Apple iPod, choice and compatibility," the company said.
Apple's warning against RealNetworks's new service adds "fuel to the fight over the digital music business," the Wall Street Journal reported. But the paper noted that "Apple's statement is a delayed reaction to an announcement from RealNetworks Monday that it had created a technology, dubbed Harmony, that allows users of RealNetworks' RealPlayer Music Store to transfer songs to the iPod. Apple has maintained iPod as a closed system, allowing only digital songs purchased from its iTunes Music Store, and no other mainstream music site, to work with the music player. (iPod users can also play songs recorded in the MP3 format from personal CD collections or downloaded through file-sharing programs.) Late last week, RealNetworks Chief Executive Rob Glaser contacted Apple CEO Steve Jobs to inform him about Harmony, but Mr. Jobs reportedly was on vacation. An Apple spokesman declined to comment beyond his company's statement."
USA Today explained that RealNetworks started out trying to woo Apple rather than egg it on: "Earlier this year, RealNetworks CEO Rob Glaser sent Apple CEO Steve Jobs an e-mail seeking ways to make their digital music systems compatible, only to be rebuffed. Apple dominates digital music with an estimated 70% share of legal downloads. Its iPod is the leading music player, with a 50% market share. Most of the other 50% is in the Microsoft camp. Its Windows Media Audio format has been adopted by many rivals to offer copy protection to record labels, including the revived Napster, MusicMatch and Wal-Mart. Songs purchased in the WMA format will not transfer to the iPod. Real's songs are in the Advanced Audio Coding (AAC) format, like Apple's, but use a slightly different copy protection scheme," the newspaper said.
And the Los Angeles Times report sheds light on why anyone should care about the Apple/Real tiff. "At the heart of the conflict is the major record companies' demand that downloadable-music stores wrap their songs in electronic locks. To the industry's chagrin, Real, Apple and Microsoft Corp. developed incompatible anti-piracy techniques. Hence the Real-iPod predicament, which Real thought it had resolved," the paper said.
Real, for its part, is casting itself as the ironic Apple envoy. "So let me get this straight," Real spokesman Matt Graves told the LA Times. "Apple is complaining we're helping them sell more iPods?"
The New York Post summed up the feud with the kind of headline only the Post could dream up: "Ripping Off iPod." In the article, Yankee Group analyst Michael Goodman asks the golden question. "Is the goal here to just create a technology that you can layer over iPod, or is the real goal to bring Apple to the bargaining table?" Goodman said. "There's an interesting question here of what RealNetworks' true motivation is."
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| posted by Perimbean @ 4:03 PM |
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