Competition for iTunes Music Store

bbloke

bbloke

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It seems Microsoft and MTV are to team up to compete with Apple's online music offerings. This seems like it could be a potentially tough challenger, compared to other/previous competitors, but I guess they will have to battle against the populairty of the iPod if they go for an WMA format.

http://www.macworld.co.uk/news/index.cfm?home&NewsID=13358

MacWorld UK said:
A new potentially serious combination of companies hope to steal a slice of the online music market from Apple's iTunes - MTV Networks and Microsoft have a plan.

The two companies have confirmed they will launch a new service - "Urge" - in the US in 2006. The online music service will launch with a catalogue of two million songs across multiple genres, and will be heavily marketed across MTV's broadcasting assets, MTV, VH1 and CMT. These have an audience of some 165 million music fans.
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In a move that may interest regulators worldwide (such as in Europe and Korea) who are considering Microsoft's potentially anti-competitive practice of bundling its media player with its OS, the company will integrate the new Urge service within a future version of Windows Media Player.
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This new digital music service will offer both a la carte and subscription services, as well as access to MTV's video assets.

Urge has quickly won the support of at least two major labels. It's interesting that both these labels are believed to be the ones that are applying the most pressure on Apple to offer "flexible pricing" on downloads.
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Apple had and has important competitors. The most important one is the illegal download of music on the 'net. Another one is the sale of actual CDs in retail stores. Yet another is the re-sale of used CDs. And _then_ there's other download services, like MTV and Microsoft are building. Can't really blame them for trying: Apple's iTMS is like an icon of itself already.

The question is if Steve Jobs outstays the record industry's welcome by pressing for 'his' rights to demand fixed pricing for too long. After all, iTMS is merely a means to an end. If the big labels start to withdraw, iTMS can come to a grinding halt.

So Jobs' job is to react at the right moment. Give them a _little_ in order to keep the position. The question is when.

So far, no competitor had a real chance. Even those who've tried to re-engineer compatibility with the iPod hadn't. MTV/MS _can_ ignore the iPod, but that leaves far less than 50% of the potential market to them. (If we assume that only owners of digital music players actually buy songs off the internet, which I believe is wrong, but we ain't got any numbers for getting that right.)
 
And how many windows users have iTunes? and how many windows computers don't? the ones that don't, could potentially be an avenue for competition to win over.

1) iPod is a good trend and has lasted for a long time. But if competitors began to release comparable products then there could be trouble.

2) Once MTV/MS start releasing this, there may be file compatability issues. This will anger many customers on both platforms. iTunes can convert WMA, but can it convert DRM'd WMA? iTunes needs to convert it too. And the last time i tried it didn't let me.

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If you're inside the United States, then converting a protected music file to a non-protected format without resampling (burning to CD, importing back) is illegal since it's directly circumventing copyright protection schemes and is in violation of the DMCA. Since Apple is an American company, it cannot legally put the option of converting protected WMA files to an unprotected format into iTunes, unfortunately.

It's even illegal to convert a protected WMA file into a protected AAC file, since that process requires the "decoding" of the protection in the WMA file and applying a protection scheme compatible with AAC files. This could only happen if Apple and Microsoft discuss and agree on the ability to do this.

Remember, the American music companies like their money more than their customers. :(
 
Not to mention that the music companies also like to rip off the people that they claim to be standing up for -- the artists :)
 
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