Commentary: One Bad Apple

Apple's April 28, 2003, launch of the iTunes Music Store has raised more buzz than a ruptured hornet's nest. The company that Steve Jobs built arguably has created the easiest way to get digital music - and it's legal, too, if you don't mind paying a buck a song (Please, let's call the 99-cent price tag what it is. A buck). Apple also has raised the stakes in the fierce competition over which company controls the digital media market. If Apple's strategy is successful, none will.

No other company on the planet has executed a better digital media strategy than Apple. Doing digital media on a Mac is much easier and more satisfying than on a Windows XP PC. Apple's iLife digital media suite is the best thing going for working with digital photos, music, movies or DVD burning. Too bad you need a Mac to get it. Oh, let's repeat that for the iTunes Music Store: Too bad you need a Mac to get it.

PC users, the iTunes Music Store is the bomb. This service is so cool there aren't any appropriate words to describe it. The selection is phenomenal, with lots of "you can't find that anywhere else" acoustic tracks and other hard-to-find goodies. And buying tunes is so easy. You give up your credit card number, associate that with an ID and you're in business. Songs come with 30-second previews. You click "Buy," and that tune starts downloading to your hard drive. Ka-ching! And a buck quietly disappears from your line of credit.

Have you ever been to Atlantic City or Las Vegas and watched people plug pennies (OK, quarters and half dollars) into slot machines, hoping to hit the jackpot? Before they know it, the bag of coins is empty and some security guard is booting them out the casino door for loitering. Buying music from Apple may not be so different.

The problem with the iTunes Music Store is that buying is too easy. There's no complicated shopping cart process with itemized lists and the option to back out should the final price boggle your senses. You literally click "Buy" and that's it. A buck doesn't sound like much, but those dollars add up fast if you're not too careful. This has got to be the best gimmick since adult outfits started doing 900-number hot lines. The money is all spent silently and easily, with the shock reserved for that next credit card statement. "You see, your honor, my client is declaring bankruptcy because he maxed out all his credit cards at the iTunes Music Store. He's such an unlucky sod, because his hard drive crashed and he lost all the music bought on credit."

Still, Mac users have deeper pockets than do most Windows users, so they can afford those hefty charges. The average person buying a portable music player has an income of over $100,000 (Geez, who makes that can kind of money, anyway?), according to NPDTechworld. But 55 percent of Apple iPod buyers have incomes of more than $100,000.

Your Tune for Windows

Windows users, see what you're missing? It's more than bankruptcy. Apple has made obtaining lots of good music easier than pecking around the file trading sites looking for nuggets. That convenience and the buck a song price -- less if you buy some albums -- should be available to Windows users. Apparently that is Apple's plan, to bring this service to the Windows masses by the end of 2003. Launching the service for both platforms through iTunes would extend Apple's reach and give AOL Time Warner and Microsoft executives catastrophic heart failure. How many ways can you say, "Pushing up daisies?"

It's not like either competitor has done that well in the digital media market. The executives over at AOL Time Warner sneeze and the company loses $50 billion. (Show me any successful AOL Time Warner digital media product? You can't!) Microsoft's idea of digital media marketing is getting every hardware manufacturer on the planet to support Windows Media file formats. Most computers come with a floppy drive or cars a cigarette lighter, but that doesn't mean most people use the gear. Get real, Microsoft.

Mr. Jobs has the right Hollywood connections, he's successfully courted record labels for his new service and rumor has it his company is even negotiating deals directly with music artists. Apple has the right relationships, right strategy and right technology to pull off a successful music service. Don't forget that Apple's iPod music player is the retail market share leader as measured in revenue, according to NPDTechworld.

Apple appears to have all the pieces in place to execute on a music service that's easier to use than Macs. Great music selections, reasonable prices, click-and-buy ease of use, delivery through one of the best digital music software packages available and portability on a great music player: The combination is potentially great for Apple, its shareholders, consumers and, more importantly, competition.

That's because Microsoft's idea of digital media is controlling file formats the way it uses them in Office to dominate productivity suites. (You knew there had to be a reason why your waffle maker supports Windows Media formats, right?) In Microsoft parlance, competition is a market where all the products are made by Bill Gates & Co. (Hey, you can choose from six different versions of Windows XP. Woo Hoo!) Microsoft is trying to establish its digital media format as the defacto standard through the aforementioned hardware partnerships and also by creating what arguably is great digital rights management technology. Too bad, but the DRM only works with Windows Media file formats, folks.

Microsoft has given music labels a free tool kit (What's $500 million in unrecovered research and development costs between friends?) so they can make CDs with some content protected by Microsoft's DRM. It's a good Windows Media format proliferation technique, but music labels haven't been biting. The labels, which are uncertain about how to deal with online music file trading, appear frightened of a devil's deal with Microsoft. At the same time, Microsoft hasn't had a lot of luck with music downloads of copy-protected Windows Media Audio files.

Or so I say. Microsoft points to Pressplay and a 300,000-song library -- supposedly 100,000 more than the iTunes Music Store- - as evidence record labels in fact do support Windows Media Audio. But Microsoft is comparing, well -- pardon the pun -- apples to oranges. Pressplay is largely a music-on-demand service, where people pay a flat fee to stream songs. Yes, the songs can be purchased, too, that is if the device you want to play it on supports WMA. Sure, that aforementioned waffle maker is a good sign that your device might support WMA, if you like the format. To my discerning ear, 128kbps WMA files don't sound nearly as good MP3s at the same bit rate, 160kbps or 192kbps.

Apple has a DRM, too, but it's there to prevent mass piracy, while allowing for the kind of personal copying allowed under "Fair Use" laws. I encourage everyone to check out Pressplay for more oppressive licensing policies enforced by WMA's DRM.

Stomping for AAC

Apple would like nothing better than to steer digital media toward accepted standards, such as using MPEG-4 for digital music and video. Forget Microsoft's DRM and WMA lock and key. The consumer electronics industry, Hollywood and music labels generally have favored that approach. Apple's music service could be instrumental in providing a viable and attractive alternative to making a Windows Media format devil's deal. That also would ensure that Microsoft could not in the future choke the Mac out of being able to access or use digital media, which is driving new computer sales.

For the iTunes Music Store, Apple adopted the Advanced Audio Coding (ACC) portion of MPEG-4. (This AAC should not be confused with the Agility Association of Canada or the Aluminum Anodizers Council.) Four companies contributed to ACC, so content creators and consumer electronics companies wouldn't be beholden to technology from Microsoft or anyone else.

If successful, Apple's online music strategy and push for MPEG-4 -- a standards-based technology to which more than a dozen companies contributed patents or technology -- could really sway music labels. Hollywood is an easier win. Mr. Jobs already has great presence there as CEO of Pixar, and Apple software is the most widely used in movie and broadcast production.

As for AOL Time Warner: I'll be the first person to admit I could use to knock off about 40 pounds. But AOL Time Warner is really huge! That company can't get off its fat ass to compete with lettuce. Until AOL Time Warner trims down some, that company is just going to continue sitting there picking its teeth and talking about digital media and online entertainment. But the company never does anything but add more weight, as in buying more digital media technologies, and staying sitting down on its even fatter ass doing nothing.

Now comes along svelte Apple, Hollywood ties, great technology, legendary stylishness and ease of use in tow. Would you buy music from Microsoft? Hey, don't yell at me for asking! But Apple's cool, right? You might buy music from Apple rather than searching for it on file trading sites, right?

Still, AOL Time Warner is doing a few things right. The company has dumped RealNetwork's proprietary digital media format for ACC in its online radio service. And rumors are abuzz about an eventual sweet-heart deal between Apple and AOL Time Warner for using the iTunes Music Store as part of America Online.

But that won't happen without Apple delivering a Windows version of the service.

I would use it. When I listened to my first AAC-encoded song purchased from the iTunes Music Store, my heart sank. I simply didn't like the audio quality at all. It was like something was missing. Yeah, how about Windows. In listening to music purchased from Apple's store on a PC and a Mac with the same setup -- M-Audio's Sonica connected to Logitech's Z-680 speakers -- the sound satisfied on the Windows XP notebook and disappointed on a Power Mac G4 and 1GHz PowerBook G4. I've long been a critic of the Mac's inferior audio quality to a Windows XP PC. So for now, I'll be buying my music on a Mac and listening -- after burning to a CD or converting to MP3 -- on a Windows XP PC.

Joe Wilcox has been covering technology since 1994 and now spends his days writing about Microsoft for CNET News.com. More rants and raves from Joe can be found online at joewilcox.com.