Monday, January 29, 2007 

The iPhone Effect Revisited

Looks like has did the math that could validate my gloom iPhone Effect predictions. Nothing is set in stone, but if the iPhone is successful, this is going to happen and nobody can stop it except Apple itself (by making lots of stupid mistakes).


The Nonsense of DRM

Michael Arrington spoke to Yahoo Music GM David Goldberg and Yahoo Music VP of Product Development Ian Rogers, about the notion of labels abandoning DRM for music. The point Yahoo! is making to labels, is that DRM is contradictory to the laws of economic, it is a losing proposition for consumers and since it offers no value and consumers can get music without DRM they will not buy it. The evidence they provide is that CD sales continue to drop and digital sales are slowing down, and are definitely not growing fast enough to compensate for loss.

The good news is that according to Yahoo, labels get it. They understand that DRM will not stop anyone from stealing music but it hinders innovation and so they are ready to sell DRM-les music. However their parent companies are not ready just yet.

Overall a very optimistic forecast from Yahoo, the bottom line is that they are expecting that a significant portion of their catalog will be available for sale in MP3 format, with no DRM, including major labels content, by Christmas of 2007. To that I say Yahoooooooooooo!

Sunday, January 28, 2007 

The Future of Televsion

I just got back from the "IPTV End to End" conference held jointly by the SMPTE and VidTrans. I was fortunate to be invited as a speaker, and I got to speak about my point of view with respect to the future of Television.

While the crowd was very much old world TV, they were very curious and surprisingly thirsty for this kind of a discussion. Obviously the organizers of this event were not as open to this subject since I was the only one talking about the impact of the Internet on TV in the next five years.

When I got back I tried catching up with news from the 2007 World Economic Forum in Davos (Check out - kudos to Jeff Jarvis from the Buzz Machine for the excellent coverage), and I realized that both Bill Gates and Niklas Zennstrom spoke about the same exact topic. Interestingly we all agree that the Internet will revolutionize TV and within 5 to 10 years, broadcast TV will become a niche, and yet the three companies (Microsoft, Joost and TVersity) are going at it very differently. Same market analysis and yet a very different vision.

Note: Looks like Cisco's John Chambers and YouTube's Chad Hurley also spoke about the same topic.

Saturday, January 27, 2007 

YouTube to Develop Audio Fingerprinting allowing Labels to Monetize Copyrighted Materials inside User Generated Content

Here is a great way to work with users and not against them. Chad Hurley from YouTube said in Davos of 2007 (see video) that they are developing an audio fingerprinting solution that will allow them to identify copyrighted material, notify labels and let them claim that material by generating revenue from the user generated content.

This is really awesome, instead of suing creators of user generated content work with them, allow them to be creative, and in the same time compensate the artists.

Now, if labels take this approach from now on and stop working against users (with DRM, law suits, and rootkits) maybe they will be able to put the music industry back on track, within the next few years.

On the other hand, if they decide to keep working against users, they will eventually be displaced. Have you ever heard of a business constantly fighting against its customers that survived?

Tuesday, January 23, 2007 

Record Labels Contemplate Unrestricted Digital Music

It seems like every week, we get yet another story telling us that the labels are getting ready to sell DRM-less music. This time it is from the New York Times:

"Executives of several technology companies meeting here at Midem, the annual global trade fair for the music industry, said over the weekend that at least one of the four major record companies could move toward the sale of unrestricted digital files in the MP3 format within months."

This is great news indeed, not only because it validates one of my recent predictions, but mainly because I have been buying CDs and avoiding online music stores because of DRM. Now I will finally be able to buy my music online. If I am right and there are many people that have been doing the same, the labels will see a huge increase in online music sales during 2007.

Sunday, January 14, 2007 

Apple Refuses to Remove DRM even when Artists do not want it

By now we all know that DRM (Digital Restrictions Management) is serving the interests of one company only - Apple. An interesting article published today on the NYTimes provides ample evidence to confirm this and it even says:

Among the artists who can be found at eMusic are Barenaked Ladies, Sarah McLachlan and Avril Lavigne, who are represented by Nettwerk Music Group, based in Vancouver, British Columbia. All Nettwerk releases are available at eMusic without copy protection.

But when the same tracks are sold by the iTunes Music Store, Apple insists on attaching FairPlay copy protection that limits their use to only one portable player, the iPod. Terry McBride, Nettwerk’s chief executive, said that the artists initially required Apple to use copy protection, but that this was no longer the case. At this point, he said, copy protection serves only Apple’s interests .

Josh Bernoff, a principal analyst at Forrester Research, agreed, saying copy protection “just locks people into Apple.” He said he had recently asked Apple when the company would remove copy protection and was told, “We see no need to do so.”

I call for a ban on the Apple store, it is time for us to stop being suckers. If artists agree to sell their music without DRM, Apple has no right to refuse it. Enough is enough, it is time for consumers to fight for their rights and show Apple that this is an unacceptable behavior.

If we do not wake up right now, it will soon be too late. It is quite obvious to me that Apple is only waiting for the right time to remove MP3 support from its iPod. If they feel they can do that without compromising sales, they will. Needless to say if they ever reach that point, we are doomed.

Citizens of the world wake-up, it is time to ban the iTunes store.

Wednesday, January 10, 2007 

The iPhone Effect

Now that we know an iPhone is headed our way, we should be asking ourselves how will this impact the industry and what will be the response from Microsoft and the rest of the software and hardware players in the mobile phone market.

Here are some of my thoughts. Before reading them, please be fore-warned that I am taking the success of the iPhone here to the extreme. While all of the ideas below have a foothold in reality, in practice only some of them are likely to occur and the degree of their realization may vary.

  • Microsoft will have to create its own phone and will no longer be able to rely on third parties. This is just like they had to do with Zune in order to compete with the iPod, only this time it will happen a lot faster, maybe we will even get some announcements (not products though) before the end of 2007. They will not wait till the iPhone takes the market, like they did with the iPod, since they are now smarter (hopefully) and they have much more to loose. Regarding their Windows Mobile partners, well, we know already that they have no problem screwing their partners (PlayForSure anyone? Or is it SureNotPlay...).
  • Microsoft's Windows Mobile partners should all dump Windows Mobile right now and switch to Access (the buyer of Palm OS and creator of a Linux based OS for phones). Since Windows Mobile will no longer be partner friendly, Palm OS may blossom again and its acquisition by Access may prove to be one of the best deals one could make. Of-course the iPhone will make them a niche player, focused mainly in enterprise applications along with Blackberry and Motorola's Good, nevertheless the enterprise market will offer enough growth to make them successful companies.
  • Nokia will realize that the only Nokia device that can maybe compete with the new iPhone is the N800 Internet Tablet. They will have to integrate cellular capabilities into it, before the end of 2007 or it will be too late for them. They will also need to come up with a super cool user interface and to better leverage their touch screen. One possibility here is to fully embrace Yahoo Go and to build on it a fancier interface.
    The only thing that will work for them is their open platform approach, which will stand in sharp contrast to the Apple's closed system and the new closed system from Microsoft.
  • Google and Yahoo will fight over who gets to put their web applications on the iPhone. Apple will be the big winner continuing to play them both and taking the best features from each. Apple will not allow neither Google Talk nor Yahoo Messenger to run on their phones, and instead they will use iChat, making it the number one IM tool on mobile devices, leaving AOL far behind.
  • Danger (the maker of Sidekick) will fight hard to avoid chapter 11, since the iPhone is targeting their market so they will unfortunately be the first casualty. In fact their 2007 sales will likely decline sharply.
  • Cisco will sue Apple over iPhone but this will blow away after a while and will not become an issue.
What about Apple? Apple will not only sell millions of phones in 2007 but they will double their Mac sales and this trend will continue through 2010 at least, giving them a mind boggling 20% of the personal computer market at that time. They now stand a real chance to do to the PC what Firefox did and is doing to IE, or in other words to do to the PC what the PC did to them.

The "Apple-ization" of Microsoft will continue and will turn into a huge weakness for Microsoft. Microsoft is essentially moving the game into Apple's home court and this will cost them. As is the case with almost any huge monopoly, their own mistakes will defeat them or in this case their attempt to beat Apple in Apple's own game.

In the same time, we the consumers will become more and more dependent on closed and well-integrated platforms that are easier to use but are also less flexible and fully controlled by this new software and hardware monopoly called Apple. This is the dark side of Apple, and we the consumers will switch to the dark side, allowing Apple to become as big as Intel and Microsoft combined.


My Biggest Takeaway from CES 2007

Here it is spelled out for you, I should have gone to MacWorld! This is my takeaway from CES if you catch my drift...

I do not use Macs, I do not own an iPod (my wife does) and I dot not like closed systems, but Apple knows how to build products and it is about time we get a decent mobile communicator. So if it is as good as it looks I am converting. Who knows what happens next, maybe I will get a Mac...

Thursday, January 04, 2007 

Some Predictions for the New Year - 2007 will be the Year of Mainstream DRM-Free Music Services

I always said the only way to kill DRM is let more and more people experience its side effects. This will lead for low sales and lack of competition with iTunes, which will eventually convince the music industry to do without it. Guess what? It is happening and it is happening now!
Don't take my word for it, check this piece from Reuters (published in this case on PC Magazine):
Ailing Music Biz Set to Relax Digital Restrictions

Looks like Yahoo! (which I credited in the past for their anti-DRM agenda) and Amazon are planning to open a DRM free music service and in the case of Amazon they actually avoided opening a DRM based service so far because of their anticipation for a DRM free one. Jeff Bezos deserves a few more points for this decision (and for many others like the S3 and EC2 services but this is a totally different subject).

With all the respect for Yahoo! and Amazon, the real competition for iTunes (and this is my second prediction for the new year) will come from MySpace. Their attempt to streamline the process of exposure, publicity, distributions and sales for musicians via its social network, holds the promise to disintermediate the labels altogether. If DRM wasn't going be killed by the music industry, the MySpace approach would have been the one to kill it along with the music industry, by creating a new one.