g r o t t o 1 1

Peeve Farm
Breeding peeves for show, not just to keep as pets
Brian Tiemann
Silicon ValleyNew York-based purveyor of a confusing mixture of Apple punditry, political bile, and sports car rentals.

btman at grotto11 dot com

Read These Too:

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James Lileks
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As the Apple Turns
Entropicana
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Capitalist Lion
Red Letter Day
Eric S. Raymond
Tal G in Jerusalem
Aziz Poonawalla
Corsair the Rational Pirate
.clue
Ravishing Light
Rosenblog
Cartago Delenda Est



Cars without compromise.





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Tuesday, September 25, 2007
00:33 - Into the Wild

(top)
A TV ad just now:
Now playing in selected theaters!

Yay!

Moviefone.com:

This movie is NOT currently playing in your area.

Aww! Dagnabbit!

What am I, living in a bus in interior Alaska?


14:08 - Lock Washer II: Electric Boogaloo
http://daringfireball.net/2007/09/amazon_mp3_downloader

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Looks like it's time for a teachable moment in iTunes land. Amazon has now apparently opened up a DRM-free MP3 store, selling tracks for less than iTunes does (89-99 cents) and at higher bitrate (256 Kbps), with admirable iTunes tie-in support on the Mac side (and presumably on Windows as well).

Those who insist that the iTunes Store is a racket and a cash machine for Apple will get to see one of two things happen next. Either Apple will protest (either verbally or by changing its offerings somehow) against this encroachment on their turf by the first real and compelling competitor that has yet appeared; or Apple will express support for Amazon's move by keeping their offerings exactly the same and touting the fact that everything you buy from the Amazon MP3 Store works with iTunes and your iPod.

If Apple is really interested in remaining the leader in the space, in fact, it will have to reduce its prices accordingly, even if that means introducing variable pricing. But there's a lot more DRM-free music in the Amazon store than in the iTunes store, which means that Amazon was apparently able to forge a deal with the labels that's even more favorable for the consumer than Apple was. It's not just EMI, it's lots of labels participating in this. A snub against Apple, perhaps? A statement that the labels are tired of being pushed around by Apple, the upstart in the industry, and will jump on the DRM-free bandwagon as long as it's through someone other than iTunes?

The big breakthrough that got Apple its foothold in the music-store space in the first place was its ability to negotiate an unprecendented deal with the labels who before then had never been open to selling digital music in a non-subscription format; the only reason they were able to convince the labels to get on board was with FairPlay DRM. Now, though, non-DRM doesn't seem to be a deal-breaker anymore.

And if Apple is serious about its stance on DRM in the long term, they ought to welcome this development, because selling music through iTunes has never really been part of the business model. It's never been a big profit center. It's been a necessary evil, something Apple was forced to provide because nobody else could do so while ensuring the seamlessness of the iTunes/iPod user experience. Nobody could while DRM was an indispensable part of the equation.

Well, now that Amazon is selling MP3s that go straight into your iTunes library, Apple ought to be pleased as punch to relinquish what little market leverage they've had to date by being an exclusive distributor of proprietary content. When the labels are willing to sell MP3s, the market will necessarily quickly adjust and put them all on the same price no matter who's selling them; they'll be like CDs on the shelf at Target and Wal-Mart, whichever you happen to find yourself in. Amazon will just be the first of a zillion such stores all selling MP3s for the same prices; hell, I'll bet I could set up my own storefront and resell Amazon MP3s with a few cents' markup. (Maybe they'll offer a wholesale rate.) Even if Apple wants to retain its higher prices on its DRM'd AAC files, it won't be able to. Not when there's an alternative that's better in every way.

And this should be just fine with them. What Apple really wants is to sell iPods, not to lock you in to the iTunes ecosystem. They should be perfectly happy to continue to dominate the music player market in a world where it's not necessary to declare allegiance to one digital retailer or another. It's immaterial to their bottom line, which is that as long as your iPod will play the most widely supported music formats, including unprotected MP3s just like it's done since it first bowed in 2001, then it will continue to sell at the top of the bestseller lists.

Amazon is perfectly happy to sell iPods for Apple. Now they'll be selling the same music as Apple does. Apple still makes the same profit and retains the same market share as before, in the segments that matter to it. What it makes from iTunes song sales will dwindle into the noise, if it weren't there already; and that'll be just fine.

That is, if Apple's goal is not in fact to lock you in and to profit from the margins built into the iTunes store. If it is, then today's a day to freak out and sell your AAPL.

... $153? The market sure doesn't seem to be worried. Though I guess we'll see tomorrow...

UPDATE: It occurs to me that the iTunes Store will still bring unique value in the form of non-music offerings (e.g. TV shows and movies, particularly when HD arrives) and, in coincidental enough timing, the Wi-Fi iTunes Music Store. Ain't no Amazon downloading gonna be happening in the Starbucks/iPhone milieu.

Monday, September 24, 2007
09:17 - There but for the grace of Jobs
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/09/24/cnpc124.xml&DCMP=I

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People might be skeptical of some of the advances in Leopard (and rightly so, in the case of the new wonky Dock, the stupid flat indistinguishable folder icons, and the mercifully-already-backed-off-from transparent menu bar). But that's not going to stop people from upgrading to Leopard for things like Time Machine, QuickLook, and the indispensable Cover Flow Finder view. (Yes, I'm being facetious there.)

You can be sure, though, that it's not like we're about to find this happening in our own backyards:

It took took five years and $6bn (3bn) to develop, but Microsoft's Vista operating system, which was launched early this year, has been shunned by consumers with computer manufacturers taking the bizarre step of offering downgrades to the old XP version of Windows.

A note on the electronics retailer website Dabs.com reads: "If you're not ready for Vista, you can downgrade to Windows XP without affecting your Sony VAIO warranty and switch back to Vista at any time."

Hey, I know: Apple could sell Macs, put Boot Camp on them, and offer a "downgrade to Windows" option! Yuk, yuk, yuk. Okay, that was stupid. (But not as stupid as those folder icons.)

UPDATE: Ahem.

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© Brian Tiemann