Thursday, 28 August 2008

(Column) - The French government is proposing a law that could force Apple to open standardize its iTunes Music Store and make the audio format compatible with all music players, as oppose to exclusively working with the iPod. Though Apple doesn’t generate much profit from the music store in comparison to other products and services, Apple counts on iTunes to retail the much profitable and trendy iPod family of portable audio players. The law is under consideration and will be voted on Thursday in parliament.

If the French government is successful in enacting the law, it would be a blow to the iTunes Music Store, since Apple would have to comply with the French government and make sure the file format is compatible across the board. Not only does it take away from Apple’s exclusive strategy to promote its iPod music player, but it will also let consumers, at least in France, use software to bypass the Digital Rights Management (DRM) techniques that are used to protect digital content and convert them to the format of their choice.

From the consumer’s perspective, bypassing DRM is intriguing and adds to our freedom, but it could be deadly to Apple’s spot as the number one music retailer. Consumers will no doubt take advantage of the iTunes massive library and distribute songs uncontrollably over peer-to-peer networks (initial threat), which would surely cut on Apple’s already limited profitability. Moreover, Apple would have a crippling time continuing a symbiotic (I use this term loosely) relationship with music labels that support Apple because of its stronghold on the market.

While this law may never have an impact in the North American market (thanks to the RIAA), it just might be the motivational factor that’s needed to ratify similar laws in other countries. According to industry observers, Apple may have to shut down its iTunes Music Store in France should the government sanctions such a law, and assuming the trend continues across other countries (excluding the United States), Apple is in serious trouble. What could be good for the consumers may ultimately lead to a crippled company that revolutionized the digital music age.

Alongside industry analysts, music artists, film production companies and record labels are actively discouraging the law because of piracy concerns. The concerning factor is the Domino Effect theory, which would ultimately lead to iTunes’ downfall.

As much as I despise the Digital Rights Management technicalities, this is perhaps one of the few times when I will actively endorse the notion. Piracy aside, the entire model is at risk here, and if we want to continue to enjoy the benefits of digital music (and to halt RIAA’s baseless campaign against piracy) we have no choice but to be pro-DRM.

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- Apple vs. Media: Media Loses Big Time

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