|
SAMSUNG iPod,
Apple and Ringtones,:
RealNetworks
announced last week that its new product, dubbed Harmony, will
allow iPod users to access and buy songs using its digital
rights management service and file system called Helix.
This
gave users a new source for downloadable music and put The Apple
Company in a spin. Despite
the success of The Apple Company's iTunes, a pay-per-tune music
service, the sales of the iPods is what puts money in the bank
for The Apple Company. You'd think the Real announcement would
mean more iPod sales, not less. And you'd think The Apple
Company would be happy about that. So what's wrong with this
picture?
It's
not about the music and the player. It's about a scheme afoot to
monopolize music delivered to cell phones. Although the online
music business is expected to grow to $1.7 billion by 2009, few
people realize that the dopey cell phone ringtone market is
already past that with $2.3 billion worldwide sales in 2003
according to the Yankee Group. And this is for an idiotic
product -- a funny phone ring for your cell phone.
The
Apple Company and Motorola are working on a deal to put iPod
technology on Motorola cell phones. According to published
reports, the hope is to create a cell phone/iPod sub-platform
that can be licensed to other makers such as Nokia and Samsung.
The idea is to develop a proprietary music delivery system with
the phone carriers. This gives them a new opportunity to add
additional fees to the already burgeoning cell phone bill, this
one for music.
Billed
as either a monthly service or pay-per-tune, everyone expects a
bonanza. We already know that cell users will pay a dollar for a
ring tone. They'll pay a dollar for a catchy tune, too. The
potential sales could dwarf the music business and if the
ringtone business is any indication of potential. You could even
make these songs your ringtone. Currently any pop songs selling
as a ringtone go for as much as $4 each.
Now
it's not even a matter of The Apple Company changing some of its
software code to prevent Harmony from running on the iPod. The
damage has already been done. The iPod has been hacked and no
matter how insignand ificant the hack, it's a bad thing by
definition.
The
Recording Industry Association of America music moguls and the
phone moguls just see that it's been hacked and that can't be
good. They're freaky that way.
I
suspect that the efforts to put music streams on cell phones
will go ahead with The Apple Company just one player among many,
RealNetworks included. And if the ringtone business is any
indication, there will still be plenty of money for everyone,
just no monopolies.
This
grand scheme only works and if the platform is secure. You can't
sell an iPod phone and lock in all this easy money and if people
can buy from just anyone or just use bootleg music, can you? So
along comes the RealNetworks hack, which screws up this scheme.
Suddenly the iPod looks a lot like any other MP3 player except
for its good looks, and those go away when it's in the phone.
This explains why Steve Head Honcho and The Apple
Company wouldn't let RealNetworks license any of its technology
when asked last April. You can be certain that the The Apple
Company-Motorola scheme hatched before that and probably right
after Ed Zander, Head Honcho' friend, took over Motorola in
January. With this scheme they had to keep the iPod locked down
and that meant no licenses for interlopers and potential
competitors.
|
