July 11, 2014

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Apple Threatens Real

Pay attention now, ’cause this story gets kinda complicated.

See, Apple had this product called iPod that lets you listen to music. That sounds like a good idea. But Apple thought it would be better if the iPod could do less. So their engineers pulled a bunch of all-nighters to make sure that the iPod couldn’t play just any music a customer might have laying around. They called this DRM. I think that stands for Don’t Replay Music.

Now Apple had a competitor called Real. And Real was unhappy that Apple had made its product less useful. So Real’s engineers pulled a bunch of all-nighters, so that they could make Apple’s product better. They could’ve spent that time making their own product better, but that would have been a waste after all of the time they had already spent making their own product worse by making it do DRM too.

You still with me? Good.

Okay, so Apple was mighty ticked off that Real had made Apple’s product better, without even getting permission or anything. So Apple cried foul. Apple was shocked ‘n’ saddened that Real was trying to improve Apple’s product, like those hacker guys are always doing. So Apple drew a line in the sand, and swore to make its own product worse again.

I don’t know about you, but I find this all very confusing. I guess I just don’t have a head for business.

Comments

  1. Chris Silverberg says:

    First let me state clearly that I hate DRM and I am thankful for the work you are doing to promote fair use. But there is a problem with the content of your article…

    > So their engineers pulled a bunch of all-nighters to
    > make sure that the iPod couldn’t play just any music
    > a customer might have laying around.

    This is not a true statement. I routinely purchase CD’s, burn them, and transfer them to my iPod using iTunes an no other software. Apple never made the iPod “do less.” I have the same capabilities to put any MP3s on my iPod that existed when the iPod first came out. In fact, Apple *added* support for AAC files, so you could say that Apple has been making the iPod do *more*.

    The DRM Apple added was specifically for the iTunes Music Store. Apple is said to have not wanted to add DRM at all, but in order to reach agreement with the music labels, DRM was a requirement. So that’s the *only* place where DRM is used. When I put my own music on the iPod, DRM never comes into play. The only DRM protected files come from the iTunes music store.

    Real is accused of reverse-engineering Apple’s DRM. It’s Apple’s decision that if Real wants to put files on the iPod, they should not be DRM protected, or they need to license Apple’s DRM (neither scenario is likely). I doubt Apple could win that case if it went to court, but they could cost Real a lot of money with such a lawsuit and they could hinder Real’s efforts by changing their DRM to not play Real files (if that’s possible.)

    I personally think Apple should just license their DRM. Apple doesn’t make much on the iTunes music store anyway… the profit margins are so small they never will make much, so why not let other music stores put files on the iPod. Apple can gain revenue from the licensing of their DRM technology and retain their position with the dominant music player. If they keep improving iTunes and remain price competitive, they’ll keep their customers without the lock-in.

  2. Copyfight says:

    Apple vs. Real: A DRM Story

    Edward Felten, with the definitive post on the below-discussed fracas over Real reverse-engineering for compatibility with Apple’s iPod: Pay attention now, ’cause this story gets kinda complicated. See, Apple had this product called iPod that lets you …

  3. The Importance of... says:

    Apple Gets Real Serious About Harmony

    I’ve been writing a lot recently about the Real / Apple imbroglio (What Real’s Hacking of FairPlay Doesn’t Do, Can Copyright Holders Sue Real for Converting Files from Helix DRM to FairPlay DRM?, and Can Real Sue Apple Under the…

  4. bill says:

    Everything Chris said.

    While I think Apple is overreacting, I also think if Real wants their files played on the iPod than they should provide them without DRM.

    Would the Napster mp3 player would be “better” if Apple “hacked” Napster DRM to play iTMS tunes?

  5. craig says:

    But Bill, why would they waste their time? Apple is a hardware company. Just as the make OS X to sell Powerbooks, G5′s, eMacs, etc. they sell music so that they can sell more iPods. As Chris said there’s very little profit margin in the music store – it’s in the iPods.

    Real would probably also have a hard time continuing to sell music if it sold it without DRM. the RIAA would get bitchy.

    Great post Ed!

  6. Kelly says:

    “Apple is said to have not wanted to add DRM at all”

    And Santa Claus is said to exist. FairPlay: Another Anticompetitive Use of DRM

    “Real is accused of reverse-engineering Apple’s DRM.”

    And it’s a silly accusation. Why would anyone waste their time reverse engineering something that was reverse engineered 6 months ago?

  7. steve crandall says:

    Remember that DRM is there by the mandate of the record company – Apple and others don’t have a choice. It is likely that the contracts Apple has with the recording industry demands a due diligence on Apple’s part to protect the track from the store to the device.

    Also note that 100 million iTMS tracks/ 3 million iPods is about 3 CDs worth of music. Last Spring I surveyed a few hundred iPod owners and found the average iPod has well over 2000 tracks. To first order online music stores – even the only “successful” one – are irrelevant to the average customer.

    It is wrong to say anyone dominates a market if their store has done

  8. Kelly says:

    “Remember that DRM is there by the mandate of the record company – Apple and others don’t have a choice.”

    Remember that the head lawyer for Apple’s iTunes Music Store has said that IF they had a choice, they would still have included DRM.

  9. Dave says:

    Silly little consumers, DRM isn’t for us. You’re an fool if you’re buying from either iTunes or Real or any other DRM syndicate. Mp3 is the defacto consumer standard and plays on all devices (except for Sony’s new player; destined for garbage cans everywhere). Good luck playing those DRM protected files in 5 years when your unique player breaks. I’ll still be able to listen to my mp3′s decades from now. The amazing part is I’ll still have this little sliver of shiny plastic that’ll allow me to use modern encoders at anytime, plus have a backup copy and some fancy artwork. Being able to play on any music device, anywhere, anytime is worth a few extra bucks to me. Then again, I don’t buy Top40 crud either. YMMV! :-)

  10. Aaron Swartz says:

    Ernie, who suggests DRM is there to allow companies to lock-in users, must be happy that his theory is being confirmed.

  11. anon says:

    I can’t follow the argument that this makes Apple’s product better. It may make Real’s product a lot better though, especially if you can transcode Real files to standard mp3 (or mpeg for video). Just translating from one DRM regime into another isn’t really so hot, though.

    I also agree with Dave. The only reason I accept iTunes DRM is that I make audio CD backups from all the songs that I purchase.

  12. Aaron Swartz says:

    It makes Apple’s product better since it can now play files purchased thru Real. Imagine if your VCR could suddenly play Betamax tapes. Your VCR would obviously be better.

  13. Neal Parikh says:

    People have mentioned this already, but I felt it was worth really underscoring since I’ve seen these errors from a wide variety of sources. First, the iPod is fine with non-DRM files, and second, Real’s store uses DRM just like Apple’s (and everybody else’s).

    The iPod does *not* require DRM. If you purchase a CD and rip it into MP3 or AAC format with iTunes or any other software product, it will play on an iPod just fine (or any other MP3 player, for that matter). Indeed, many people still just download music off P2P programs and play them on their iPods or in iTunes.

    The only place DRM shows up is in the iTunes Music Store, where Apple had to put in DRM in order to placate record labels, as said above. And here’s the restriction in the iPod: the iPod can only use one kind of DRM: Apple’s FairPlay. However, *non*-DRM files work just fine. All Harmony does is translate from one kind of DRM to the other.

    It’s also misleading to state that “[Real] could’ve spent that time making their own product better, but that would have been a waste after all of the time they had already spent making their own product worse by making it do DRM too.” Real uses DRM just like Apple and everybody else. They just use a different kind that isn’t supported on the iPod. Indeed, if Real had a music store that didn’t use any DRM, then their files would play on the iPod without any extra engineering effort on their part, and this wouldn’t even be an issue.

    So I think the article makes two misleading claims. Another point is that I think Real’s DRM is more restrictive for the consumer than Apple’s FairPlay (though perhaps less restrictive for the developer). I can’t find specifics on what Real’s allows the user to do, but I remember journalists talking about how Apple’s was the least restrictive DRM scheme when the iTunes Music Store first came out.

    The problem, then, is still to get record companies to wise up about DRM in general; if they dropped the DRM idea, all the stores and players would become compatible almost automatically.

  14. Ed Felten says:

    Neal,

    I don’t see how anything you say contradicts the (implicit) argument I made in the original posting.

    Apple does DRM, and the purpose of that DRM is to keep people from doing things they want to do with music they bought. (You’re right that the DRM is no barrier at all to using pirated files with the iPod.)

    Real’s DRM, likewise, makes their product less useful, because it prevents customers from making lawful use of the products they have bought.

    Maybe Real’s DRM is worse than Apple’s; I don’t know. But the point I was trying to make is that both DRM systems make the companies’ products less useful to law-abiding customers. And the companies worked hard to achieve this result!

  15. David says:

    It doesn’t really matter what companies try to “secure” their product. When a file fails to play, someone will write a freely distributable patch that effectively removes any and all security measures. Thank you to all you wonderful programmers that insure my mp3′s, DVD’s, and whatever comes along next, will give me enjoyment for many years to come. Digital has made it so much easier to copy. Building cable decoders was a LOT more work…

  16. anon says:

    Aaron Swartz writes that if my VCR could also play betamax tapes then it would obviously be better. Really? The VCR would be more capable certainly, but I don’t have any betamax tapes and I don’t know anyone with any betamax tapes. I could then get betamax tapes and this may increase my selection of different viewing options or it may give me more options for suppliers. So to me this potential is not “obivously better” just the potential to be better.

    Back to this iPod example. I don’t have any RealAudio files. Is the selection at Real’s music store better than Apple’s? Do I need another online supplier for competition on price/convenience? I do want a wider selection. Warp Records has gone with its own store, BLEEP, and I expect to see other specialty stores. But given the competition of existing music retailers like Tower or Amazon.com, I am not sure how important it is to have several online stores selling the same thing.

    I haven’t seen too many details about Real’s technology, and I also am not too familiar with their store. I look forward to learning more and expect a strong argument that they are improving Apple’s product. But for now it remains far from obvious for me.

  17. Aaron Swartz says:

    Felten, the error with your argument is that the DRM makes the iTunes Music Store less useful, not the iPod.

  18. Mason says:

    Sure are a lot of nitpicky comments for a post partially in the “humor” category.

  19. Hal says:

    If only we could get things for free, they would be even better. A store that sold everything for free would be more useful than a store which charged for its items. Of course this is a superficial analysis. If everything could only be sold for free, there would be fewer goods on sale. So in the long run, we are actually made better off by the seemingly harmful practice of charging for goods.

    It is unwise to look only at the immediate and short term effects of anything, including DRM vs non-DRM systems. Superficially, the non-DRM systems are better, just as the store which charges nothing is better. But in the long run, both have the same problem, which is that there will not be as many goods if people don’t get paid for them.

  20. Neal Parikh says:

    In that case, I misread the implicit argument you made in the article. Apologies!

    I do agree with you that Real’s DRM translation system is a good idea, and makes DRM a bit less intrusive on the (paying) customer.

  21. Xavier Itzmann says:

    ‘ “Apple is said to have not wanted to add DRM at all” — And Santa Claus is said to exist. ‘

    The 1st and 2nd generation iPods had no ability to play DRM music. Apple created a machine free of any and all music constraints. It would play MP3, WAV, and AIFF musics. This is proof of the fact Apple was not interested in DRM music.

    Apple later added the possibility for 1st, 2nd, and newer iPods to play protected mpeg4 (mp4) audio files, such as those sold by the iTunes Music Store.

    You are not forced to use protected mpeg4. Apple burned enough midnight oil that iPod now plays the following free, non-DRM, utterly unprotected music formats:
    MP3
    WAV
    AIFF
    Lossless
    AAC (unprotected mp4)

    In addition, iPod gives you the option, but not the requirement, to use the following DRM file formats:
    Fairplay AAC (protected mp4)
    Audible

    Apparently, misinformation regarding the iPod continues to exist, just like it does regarding Santa Claus (and yes, I am reversing your analogy).

  22. Bubba Ray says:

    Why did Apple do this? Because they don’t want you to spend money on music at Real’s store when you can spend the money on music at their store. Real’s addition does make the iPod better, but it hurts Apple at the iTunes store (or whatever it is), so of course Apple’s pissed. I don’t think Apple would make any new sales off of iPods simply because it now works with Real DRM, but they might lose sales if songs can be bought through Real. And while you can play non-DRMed music on an iPod, that’s not what this is about. Real and Apple aren’t about to say “Here’s something to remove our DRM;” that’d piss off the RIAA (and we don’t want that to happen). So Real will go out and cross their DRM into Apple’s, and then Apple will try to break that. This isn’t about the DRM, or even the iPod. It’s about selling music.

  23. Steve @ PM-style.com says:
  24. Edd S says:

    “This is proof of the fact Apple was not interested in DRM music.”

    Logical fallacy.

    The previous version of RealPlayer did not include FairPlay support. Does that prove that Real was not interested in FairPlay support? No, it does not.

    There are other possible reasons as to why support was not included before (cost, lack of time/resources, etc). To claim that “was not interested” is the only possible reason is a logical fallacy.

    Not that I’m surprised. In discussions of the Real/Apple issue, I’ve seen almost every logical fallacy in the book used by Apple zealots.

  25. Adam Mersky says:

    Did anyone see this story in Wired today…or everywhere else for that matter. Real seems real intent on driving users to its store to try out its new compatible standard.

    http://www.wired.com/news/digiwood/0,1412,64582,00.html

  26. Fazal Majid says:

    Apple’s decision is obviously driven by the desire to lock iPod users into the iTMS for legal downloadable music. A marginally profitable business for them today, but that could change when they get real market power, and something the labels are clearly afraid of.

    Real’s reverse engineering is designed to open that market to their flavor of DRM-ed music. Evil fights evil…

    DRM is for customers a faustian bargain between freedom and convenience. Depending on your personal trade-off, the proliferation of DRM can be a net negative rather than a positive, and thus adding Real DRM to the iPod is a negative as well. On the other hand, the whole fuss will raise the average consumer’s consciousness of the restrictions, and may lead them to avoid them if possible. I for one will stick to Audio CDs losslessly encoded. I have never bought a single track off iTMS or Real, and am not prepared to do so.

  27. Dan Semaya says:

    This is the best (and funniest) description of the Apple-Real conflict that I’ve read.

    (I took Ed’s InfoSec class last fall and I just discovered his blog 10 minutes ago.)