Digital Music Confusion
Competitors Promote Differing Standards and Devices
By Sebastian Rupley
PC Magazine
July 29, 2004— Due to an ever-growing array of digital rights management (DRM) strategies, incompatible file formats, and disparate portable music devices, the digital music scene has gotten complicated.
Nevertheless, digital music is selling briskly online, and innovative new strategies for distributing music and sidestepping proprietary formats are appearing.
This week, RealNetworks shook up the music scene when it announced that its new Harmony software will allow users to play digital tunes bought from the company's online music store on Apple iPods and many other kinds of music players, including the new Microsoft-compatible ones that are appearing. Apple has kept its DRM strategy for songs proprietary, and some analysts predict that legal action may result from RealNetworks' moves.
"Compatibility is key to bringing digital music to the masses," said RealNetworks' CEO Rob Glaser in announcing Harmony. "Before Harmony, consumers buying digital music got locked into a specific kind of portable player. Thanks to Harmony, consumers don't have to worry about technology when buying music. Now anyone can buy music, move it to their favorite portable device, and it will just work, just like the way DVDs and CDs work."
Songs from the RealPlayer Music Store can be played on over 70 portable digital music players, including all generations of Apple's iPod. By contrast, many other online music stores distribute music in proprietary formats. Apple's iTunes store delivers music to be played on the iPod, and Napster uses Microsoft technology that won't work with the iPod.
Microsoft's Moves
Microsoft is focusing on its own DRM strategy in the digital music wars. The company recently introduced the next version of its Windows Media DRM software, code-named Janus. Numerous online music and movie services, entertainment companies, and consumer electronics firms, including America Online, have lined up to support the software.
Click here to read more about Microsoft's Janus software.
Microsoft is firmly behind a rental model for content distribution. Janus includes a "time bomb" feature, which allows users to rent music and movies for very short periods. "You will be paying a low monthly fee to fill your portable music player with thousands of songs," said Microsoft corporate vice president Amir Majidimehr in a June interview.
The company has also announced that it will launch an MSN-branded online music store later this year, and is partnering with many hardware manufacturers that are building upcoming Portable Media Center devices to compete with MP3 players and the iPod.
Price Points
In our look at Musicmatch's online music service, we note that Musicmatch Jukebox 9.0 contains two additions that make it easier to share music online: You can now subscribe to an all-you-can-stream plan and share playlists with friends. Price competition is getting heated in the music wars too.
Click here to read a review of Musicmatch Jukebox 9.0.
Our recent look at Wal-Mart music downloads noted that its prices are lower than those at other music stores: 88 cents for a song, and $9.44 for an album. Songs from the Wal-Mart store come in WMA format, for playback on Windows devices.
Click here to read a review of Wal-Mart's online music service.
After the iPod
Digital music overall has become a full-blown social phenomenon.
In a report released by Jupiter Research this week, analysts predict that sales of digital music in the U.S. will reach $270 million by the end of the year — over twice the revenues from last year. Apple Computer recently reported very strong quarterly results, and attributed much of the success to sales of the iPod, of which there is a new, updated version.
Click here to read more about the Apple's new iPod.
Hewlett-Packard is co-branding the iPod and supporting Apple's DRM strategy. Apple's iTunes music store also has over 70 percent market share in sales of digital tunes.
Increasingly, it's looking like the biggest battles in digital music will continue to surround proprietary strategies and partnerships. The outlook for consumers? Sunny if you consider that major players like RealNetworks and Microsoft, with its anticipated online music store, are preparing to try to reslice Apple's overwhelming chunk of the digital music pie.
