Apple calls French law 'state-sponsored piracy'

[Phil_The_Rodent]

By Elinor Mills
Staff Writer, CNET News.com
Published: March 22, 2006, 12:47 PM PST

A proposed French law that would force Apple Computer to make the songs it sells through its iTunes music store playable on devices that compete with its own iPod amounts to "state-sponsored piracy," Apple said Wednesday.

France's lower house of parliament passed a law Tuesday that would require digital content providers to share details of their rights management technologies with rivals. iTunes songs are protected by Apple's FairPlay technology and are incompatible with most non-iPod players. The bill, designed to prevent any single music-playing technology--and hence, any one media seller or device maker--from dominating the online market, now moves to France's senate.

"The French implementation of the EU Copyright Directive will result in state-sponsored piracy," Apple said in a statement. "If this happens, legal music sales will plummet just when legitimate alternatives to piracy are winning over customers. iPod sales will likely increase as users freely load their iPods with 'interoperable' music which cannot be adequately protected. Free movies for iPods should not be far behind in what will rapidly become a state-sponsored culture of piracy."

Apple's dominant iPod works with songs purchased on iTunes--the dominant online media store--and with tracks that are not copy protected, but it doesn't play songs that are protected by Sony's or Microsoft's digital rights management software and sold through non-iTunes services.

Apple could choose to withdraw iTunes from the French market rather than change its business, Piper Jaffray senior analyst Gene Munster speculated in a research note on Tuesday.

"We believe Apple is more likely to drop out of the French market than open up its FairPlay DRM to allow iTunes to play on competing MP3 players," he wrote. "While this sounds like a drastic move, we believe it would not materially impact business. We estimate that approximately 20 percent of iPod and iTunes sales occur outside of the U.S. The French market alone is likely less than 2 percent of iPod and iTunes business."

An Apple spokesman said he could not comment on what action Apple might take if the measure becomes law in France.

CNET News.com's Ina Fried contributed to this report.

Link (http://news.com.com/Apple+calls+French+law+state-sponsored+piracy/2100-1025_3-6052754.html?tag=nefd.top)

I thought this was interesting.

Personally, I think the proposed French legislation is in the wrong here. Neither party owns the content they're fighting about and those entering into distribution contracts with iTunes can expect limited distribution. I think Apple is obliged to defend their contractual obligations with their content providers and that no government should have the right to impose further distribution of copyrighted material which they do not own. It is up to the copyright owners, and not governments nor big business to detrmine which distribution chains they wish to pursue.

Thoughts?

[silentbobtwin]

I can see that.

But also, you have to worry about what could lead to a chain reaction causing the musician damage.

By making the content playable only on their players Apple is in the process of creating a monopoly. I consider myself aware of technology and such, especially when it comes to file sharing. I know now that Napster charges, but I don't know anyone that uses it. The iTunes store is the only place on the web, that I know of, that sells content by the song and by the episode (as they now offer television shows, movie trailers, music videos, etc.)
Again, I am unaware of any other place that allows the legal download of this content.
So now, everyone must get an iPod to use iTunes and iTunes to use their iPods. (If you wish to be good and legal and without spending $17 on a new cd)

I understand that iTunes is selling the content for the artist and therefore wishes for that content sold to be used with another of their products rather than the product of a competitor, but I think it's bad for business, it's bad for the consumer, and it's bad for the artist. It makes Apple look like a bully and it will eventually (unless someone steps up and creates a universal competitor for the iTunes store) drive prices up. The higher prices anger the consumer, the consumer lashes back by boycotting the music store- the boycott leads to a drop in sales. Some artists on iTunes are still largely unknowns. The slightest drop in sales could mean no tour or a cut back on tour which means they can't pay the bills and instead of making music they have to get a "regular job".

I know it all sounds crazy.

Anyways, I think what Apple is doing is illegal and I side with the French government. (You won't hear me say that often, :lol ) If Apple doesn't like it they should lower the price on iPod or offer some kind of discount for those who use iPod and iTunes or something, but no matter what it should be universal. I was lucky enough to get my iPod with my powerbook, if it weren't for that deal I wouldn't have an iPod.

[Phil_The_Rodent]

Interesting.

But on the other hand, there is no real Monopoly. It is only a different platform. It's like telling makers of Blu-Ray or PSP movies that they have to let everyone take their software so they can all watch the same format of movies. As long as DVDs and videos are still being sold, the other proprietary distribution channels should be allowed, IMO. mp4s and mp3s will NEVER replace CDs because they are lossy formats... just like jpegs will NEVER replace tiffs.

So if musicians or other copyright holders agree to allow iTunes to encode their content with a propietary player, it's not really up to Apple to distribute it by other means (in fact, I'd argue they're contractually obliged NOT to distribute it by other means). It's just another available medium. And it's one that should be up to the artist to control. Legislating new distibution chains breaks Apple's obligation to the contract but bypasses the actual control in the process of the copyright holder.

[fotodog]

If you think of it as a distribution channel, then it's not a monopoly because all of these songs are available in other distribution channels (except for the exclusive stuff of course) Example: Black-Eyed Peas - My Hump can be bought on iTunes and WalMart.com as well as others.

Propriety players have been around forever and for France to say, No you can't do it seems like a bad business decision. XBox, PSP and others will be next for sure. Frenchmen will have to go out of the country to buy their goods.

[OOBE]

"We believe Apple is more likely to drop out of the French market than open up its FairPlay DRM to allow iTunes to play on competing MP3 players," he wrote. "While this sounds like a drastic move, we believe it would not materially impact business."

Hmmm...Apple is really playing its cards right...OR NOT! :P

[kiwicolin]

The losers in this one will be the French public.
The French market is such a small slice of Apples business that they won't change their world wide business model for this. Personally I think the request is ridiculous
OI don't think Apple should be punished for being successful - why should they spend money on all the r&D and markerting and then give it away for free?
Nothing stopping other companies making their own music stores and players. Shouldn't go crying to your Govt if you can't compete. If you build something better they will come ;).

[silentbobtwin]

To me, and maybe this isn't the best example, but it's off the top of my head, it's like this: A company sells milk AND cookies. But you can only dip their cookies in their milk.
Not everyone likes that brand milk, but likes to dip their cookies in milk.

I like Mp3's, but I don't necessarily like iPod and they've cornered the market. Before the craze hit there were tons of "digital jukeboxes" and now, all I see in stores are iPods. It's hard to compete against a powerhouse.

What if I don't want an iPod? What if I find somewhere else to get my music cheaper? It may not yet be a monopoly, but it is the start of one.

[Phil_The_Rodent]

Really? Because all I've seen here is a massive reduction in the price of portable mp3 players. Hell, you can get a 256 mp3 player for $40, and even cheaper if you buy online.

Also, you can only use Mac software on Mac computers. How does your milk argument hold up?

[kiwicolin]

My take on compatibility....

Itunes is free on mac and windows...
You can export and convert to MP3 which works on all players...
so whats the problem? Ipods also play mp3 (you can use them on napster etc?)...

BUT if I want to listen to music from for example... real networks on a mac I can't... so where is the fair? Why don't they force other companies to make their stuff compatable on mac?

my conclusion? Macs are more compatible than other companies, they just don't like the sucess, your sucessful your punished = stupid.

[Phil_The_Rodent]

I even forgot you could export mp3s on iTunes. I love the iTunes radio streams. :)

[silentbobtwin]

Originally posted by Phil_The_Rodent
Really? Because all I've seen here is a massive reduction in the price of portable mp3 players. Hell, you can get a 256 mp3 player for $40, and even cheaper if you buy online.

Also, you can only use Mac software on Mac computers. How does your milk argument hold up?


$40 Canadian? :lol Nevermind..

I went in to Best Buy on Friday as I usually do after lunch and I noticed that every Mp3 player on display was...an iPod. Shuffle, video, nano, etc. There was nothing else. I asked the guy in the area where were the other brands and other players and he said, "We aren't carrying them right now. There isn't a demand for anything that isn't iPod. Apple has a stronghold on the Mp3 market."
Granted, this guy is just a cohort in the store, but I figured he would know something.

As for the mac software, are you talking that a program with a .dmg file name can only be used on mac or are you saying mac programs such as iPhoto can only be used on a mac? Obviously you can't use .dmg in windows, but with most programs (IE. Adobe products) they do make versions that run on mac and pc.

With the iTunes store, when you download from it you can only play it on an iPod. What if iPod breaks and you go for something not made by Apple? You've wasted all that money on mp3's that you can't put on your new non-iPod player. It doesn't make sense to me. I don't see why they would do that? I understand the financial reasons, but in the long run it doesn't make sense.

In the end I think this is going to be a repeat (different circumstances) of what happened to cds. Prices went up, sales went down, the industry put the blame elsewhere and something better comes up. A new music store will come out eventually, even though it might not be able to compete. I believe iTunes has exclusive rights to the downloads? I could be wrong.

I don't count Napster in this case because it's P2P (right?) With the iTunes store when you download the new Shakira single, you know you're getting that. When you download it on any P2P you could be getting a cover, or even a virus.

[Phil_The_Rodent]

I REALLY hope that Canadian comment wasn't directed at me as an insult.

iTunes is a free download and, as Colin said, will convert mp4 to mp3. As a musician, though, I know that if I make an agreement with ANY music distributor, I expect them to not distribute my materials through other means as the one they have been contracted to provide. They have not been given that permission by me and I don't believe it's any government's right to change that and take my control away. It simply doesn't belong to them.

[silentbobtwin]

Haha, no, I went to Canada last summer with some friends and we went to a bar and when we got the bill my friend said, "xxx dollars?! Canadian!?" I guess you had to be there, but it was funny. No insults towards Canadians, I actually envy the country- it seems a lot better than America (no offense homeland) except for the weather.

Anyways, I guess I don't see the distribution as the problem. I see the problem as compatibility. If I buy a Spiderman DVD (sony studios) it better work on my Apex DVD player. (I hope Apex isn't owned by Sony or that doesn't help me at all). It's pointless to have a thousand versions of the same mp3 just because one plays here and doesn't play there. I understand we're trying to create jobs, but this is a bit extreme.

[kiwicolin]

The MP3 will play on anything including an ipod. I like apples format because the sound quality is better, doesn't have that hollow ringing sound that mp3 has.

They used to say build a better mouse trap...
Now it build a better mousetrap and avoid the govt breaking it and sharing it with your competitors :)

[Phil_The_Rodent]

Originally posted by silentbobtwin
Haha, no, I went to Canada last summer with some friends and we went to a bar and when we got the bill my friend said, "xxx dollars?! Canadian!?" I guess you had to be there, but it was funny. No insults towards Canadians, I actually envy the country- it seems a lot better than America (no offense homeland) except for the weather.

Anyways, I guess I don't see the distribution as the problem. I see the problem as compatibility. If I buy a Spiderman DVD (sony studios) it better work on my Apex DVD player. (I hope Apex isn't owned by Sony or that doesn't help me at all). It's pointless to have a thousand versions of the same mp3 just because one plays here and doesn't play there. I understand we're trying to create jobs, but this is a bit extreme.

Ahh. See? I don't consider compatiability a problem, I consider distribution a problem. Like if you owned a VHS tape machine (open source) vs. a beta machine (proprietary). A beta played movies with better quality (like mp4) but if I contracted a company to distibute my movie via VHS, I certainly wouldn't expect them to distribute Betamax behind my back. Or have any government legislate them to do so.

[silentbobtwin]

I can see that, but if you're going to put yourself out there why limit where you go?
If I'm trying to get my stuff out there I want it available to anyone and everyone who might even remotely be interested. It seems like by signing an agreement with Apple you're stuck with them, especially if there is a clause that says you can't sign agreements with any other distribution. Or maybe I've misunderstood everything this entire time...which is possible, but unlikely..I tease.

[Phil_The_Rodent]

:)

I didn't say i wouldn't sign distibution agreements with others. It IS possible (but unlikely) that I'd want to sign an exclusive agreement, but that's up to me, now isn't it? I'd want to know what I'm getting into and keep control of the process in every agreement I make. If I had a video, I'd definitely want to distribute it via DVD and VHS.

but on that line of thought, wouldn't letting one company control it all support a monoply more than letting them take only one distribution method?

[silentbobtwin]

Isn't that what Apple is doing? Controlling it. We have the right to sell this mp3 and you can listen to it on our product.

It's not like, here's the mp3, enjoy.

And now, I'm starting to think I really misinterpreted the article, but maybe not.

And if you buy an mp3 from iTunes can you or can you not play it on another player besides iPod?

[kiwicolin]

you can play it on other players, but you need to convert it which I tunes will do for you
What the French Govt iss complaining about is that you can't purchase the music from itunes natively onn other players. AND dig this, it doesn't play Microsoft and Sonys PROPRIETERY formats hmmm... seems they should be after Sony?

[silentbobtwin]

Wait, so basically they are upset because you have to convert it? If that's the case that's pointless. It's a one click process.

Wow, I'm glad we don't tie up the court system with idiotic and frivolous lawsuits here in America. (sarcasm)