Apple as a Target

It looks like Apple (AAPL) has won the position of target-in-chief for media and technology companies -- as highlighted by news of the moment.

Today we've got five major movie studios and six major tech companies -- including Microsoft (MSFT) and Cisco (CSCO) -- banding together to form the Digital Entertainment Content Ecosystem, or DECE. (Yes, it is perhaps the worst name for an alliance in recent memory.) DECE is an attempt to counter Apple's closed system, which makes most songs and video downloaded through iTunes playable only on other Apple products. Apple made that system so easy to use, it came to dominate digital entertainment. But DECE wants to create a standard that would let any company offer DECE downloads that would then be playable on any DECE product made by any other company.

We also have the advent today of MySpace Music -- which has the support of four of the five major record labels. Why? Because they want to dent Apple's hold on music downloads. MySpace Music will try a different model, centered on streaming music paid for by surrounding ads.

Meanwhile, tomorrow Microsoft's new Zune models will be available -- yet another direct shot at Apple. Zune has only 2% of the music player market and doesn't pose any immediate threat to the iPod, but the new products show that Microsoft doesn't plan to give up the chase.

Ah, ya know, I remember, a decade ago, when Microsoft was in every company's cross hairs and Apple was basically irrelevant. The world has turned upside down.

Comments

[imurphit:]

People just don't get it. Ease of Use = Profits = Music+Video+iPod + iPhone = iTunes !

Apple will double down investments and lead again thru the bad market.

2008 Sep 15 11:07 AM

[PK de C'ville:]

"Ah, ya know, I remember, a decade ago, when Microsoft was in every company's cross hairs and Apple was basically irrelevant. The world has turned upside down."

Yeah. It's a wonder, but we do see a strong difference in responding to the challenge then and now.

Msft knifed Netscape and was found guilty of monopolistic 'malpractice'.

Apple will take these guys out by out innovating w/ products, ecosystems, quality, security, and marketing. No contest.

DECE will either die and go away or succeed in being adopted by Apple.

And then they'll still need to deal with trying to make money in Apple's iWorld!

2008 Sep 15 11:07 AM

[Marc Brodeur:]

The music companies basically brought this on themselves by insisting that DRM be on all the songs. Apple took advantage of that to restrict their use to only Apple products. Apple is smarter than they are.

2008 Sep 15 11:08 AM

[brijar:]

I'm so sick of all these companies and analysts stating "you can only play music downloaded from iTunes on an iPod or through iTunes on your PC" It's all BS. The fact is you CAN play ANY song downloaded from iTunes on ANY mp3 player. It just takes a small amount of work. You select the songs you like, burn a standard music CD of them through iTunes then rip the CD back to your computer. Viola, you have DRM free MP3s.

Get with it folks

2008 Sep 15 11:21 AM

[awcabot:]

Almost two years ago Apple's CEO wrote an open letter to the music industry urging them to abandon DRM, since licensing FairPlay is too risky. See: www.apple.com/hotnews/.../.
Therefore Mr. Maney' idea of targeting Apple seems a bit out of place.

2008 Sep 15 11:28 AM

[brewer:]

Labels are just mad that Apple won't let them gouge consumers but instead insists on keeping prices down to $1 per song and $10 per album. Which is actually MORE than they make on CDs since there are no production OR distribution costs involved. Artists still get very little of the cut. And 'brijar' is correct, the iTunes music DRM is really not very restrictive.

I predict that DECE will fail just like 'playsforsure' did. Microsoft left the consumers high and dry with that one. There should be a class action suite against them.

2008 Sep 15 11:54 AM

[wishchild:]

Apple's Enemies...

First, it was only PC companies... then electronics companies with iPod... then record companies with iTunes... then movie studios with iTunes Movies... then cell phone companies with iPhone... then wireless carriers with AT&T partnership... then console game companies with AppStore... probabably GPS and TV next... It's all about digital convergence and Apple is the clear leader here.

2008 Sep 15 12:31 PM

[Murphy Mac:]

Brewer said: "I predict that DECE will fail just like 'playsforsure' did. Microsoft left the consumers high and dry with that one. There should be a class action suite against them."

Brewer is right. PlayforSure, Yahoo!, Amazon Unbox --- they all make half-hearted attempts and leave their customers AND partners in the cold. Surely all the mp3 makers are irked with Microsoft, but they don't have the power to address the rejection of PlayforSure.

It's hard to picture a day when Apple says my iTunes music won't play. With the others it's a near certainty.

2008 Sep 15 12:44 PM

[Brandon:]

The stock market is insane right now. Can anything else be said?

2008 Sep 15 01:53 PM

[digivision:]

when a company makes so many enemies it means they are doing a lot of things right :-)

2008 Sep 15 03:14 PM

[digivision:]

if 100 mil people have ipods they are not going to give a crap
if there is another standard that plays on all mp3 players ..

DECE needs to find 100 mil more customers to compete
maybe MS plans to sell 100mil zune . to do that they would have to give one up free with every copy of windows

2008 Sep 15 03:16 PM

[Anonymous W...:]

Gee, another new standard that's late to the party. Can't be just about MP3 market as that is too far along in maturity. Apple is moving at mega speeds and the DECE will be long in the tooth trying to gain any traction. More Zunes ? Gee golly, I can't wait. I wonder if they'll be as lame as the new MSFT commercials. It's like Apple is getting free advertising benefits from MSFT who is proving how nerdy Gates is at any age and that image is bolstering MSFT negatively. Does anyone really feel like buying MSFT products after watching those vague commercials. Any teenagers going "ooh, ahh" ?

2008 Sep 15 05:45 PM

[KenC:]

You wrote, "But DECE wants to create a standard that would let any company offer DECE downloads that would then be playable on any DECE product made by any other company."

Hmmmm....did they perhaps think of removing DRM? That would "create a standard that would let any company offer DRM-free downloads that would then be playable on any device made by any other company. By creating a DECE-DRM standard, they can exclude both customers and outsiders like Apple. How is this customer-friendly? Cause if it ain't customer-friendly, it isn't going to gain any traction.

2008 Sep 15 08:22 PM

[vassar:]

The real point is that these companies are competing against themselves more than against Apple. Good luck to them!

2008 Sep 16 08:30 AM

[Roger Knights:]

Don't forget the BestBuy + Napster alliance--that makes a fourth competitor. (There are so many that the net effect may be consumer confusion.)

2008 Sep 17 10:12 AM