Wednesday, May 13, 2009

Ganging up on iTMS

Microsoft is running a new TV ad with “Certified Financial Planner” Wes Moss, promoting the $15/month Zune Pass as being cheaper than buying thousands of songs at $1/each from the iTunes Store.

As Ars Technica writes:

Moss compares $30,000 for iTunes to $15 for the Zune Pass. So where does Microsoft get the $30,000 number? Well, seeing as the 120GB iPod appears in the ad, I'm thinking the company is estimating each song at about 4MB, which really isn't much of an exaggeration. Of course, it's not exactly $15 versus $30,000. The $15 is a monthly fee, so you're likely going to be paying more if you plan on playing music for more than a month. That said, it would take you 166 years and 8 months to shell out $30,000 for the Zune Pass; many of us won't be living that long.

As of November 2008, the Zune Pass allows its users to keep any 10 songs per month. In other words, if you wanted 30,000 songs for keeps, just like the iTunes Store, you would have to wait 250 years. The cost would be a whopping $45,000, however. In other words, it's only really worth it if you're OK with the fact that you have to keep paying the monthly fee to keep access to the songs that you don't yet own. Otherwise, iTunes (or any other à la carte model) is the way to go.
Good Morning Silicon Valley (the Merc) observes:
The commercial doesn’t even mention the Zune itself; a non-techie viewer could be forgiven for thinking that the Zune Pass was an alternative service for iPod users. But going head to head on hardware probably isn’t the best play for the Zune anyway. The first step is to try to introduce doubt about committing to the Apple ecosystem by arguing the benefits of subscription over ownership. It’s a legitimate argument, depending on your needs, but one that hasn’t helped other subscription services like Real’s Rhapsody slow down the iTunes juggernaut. There’s no particular reason to think that Microsoft’s attempt to make the case will fare any better.
Whether I agree with their conclusions or slant, Microsoft is making legitimate comparisons between its offerings and Apple’s. That’s competition, and if it starts to have an impact, Apple will have to stop acting like a music monopolist.

What I found remarkable is that the Beast of Redmond is being more honest in its attack on Apple than is Sony.

In an interview posted this month by Nikkei Electronics Asia, Sony CEO Howard Stringer has suddenly become a convert to open standards. Stringer laments the failure of Sony’s late proprietary efforts to control consumer music libraries:
Q: In your keynote speech at the 2009 International Consumer Electronics Show (CES), you said that open technology is important today. Is that feeling based on the needs of customers?

A: That's right. Customers will refuse to accept it unless the technology is open. Youth in particular really dislikes closed technologies, closed systems and the like. …

Sony hasn't taken open technology very seriously in the past. Its CONNECT music download service was a failure. It was based on OpenMG, a proprietary digital rights management (DRM) technology. At the time, we thought we would make more money that way than with open technology, because we could manage the customers and their downloads.

This approach, however, created a problem: customers couldn't download music from any Websites except those that contracted with Sony. If we had gone with open technology from the start, I think we probably would have beaten Apple Inc of the US.

There was a time when it made sense to divide the market with closed technology, and monopolize a divided market, but that's just not an effective strategy any more. In the Internet universe, there are millions of stars - millions of options that have been created through open technology.
Every CEO is entitled to his woulda, coulda, shouldas. However, after years of being Sony going its own way on proprietary standards, I will believe Stringer’s deathbed conversion to open standards when the Memory Stick in every Sony camera is replaced by the de facto industry standard, Secure Digital.

However, Stringer was flat out lying seriously misinformed in his next paragraph:
Apple's iTunes Store uses its own proprietary DRM called FairPlay. I think this gives Sony a chance to provide something that Apple can't. And we have to move ahead and grab that opportunity before Apple begins to provide support for other hardware and blocks us out.
Apple announced four months ago that it was going DRM-free. Today, the FAQs on the iTunes Store are very clear:
iTunes Plus Frequently Asked Questions

What is iTunes Plus?
Now all songs on the iTunes Store are iTunes Plus songs. That means every song is available in our highest-quality 256 kbps AAC encoding (twice the former bit rate of 128 kbps), making for a sound that's virtually distinguishable from the original recordings. Plus, All music on iTunes is available without digital rights management (DRM). There are no burn limits and iTunes Plus music will play on all iPods, Mac or Windows computers, Apple TVs and many other digital music players.

Can I still buy music encoded at 128 Kbps with Digital Rights Management (DRM)?
All songs on the Store are now available in iTunes Plus, so tracks are no longer available as 128 kbps and with DRM.
Steve Ballmer, the honest competitor? I guess that goes with him being the nice one too.

Graphic credit: Joy of Tech.

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