[Infowarrior] - Want an iPhone? Beware the iHandcuffs

[Richard Forno]

(also --- the fact the battery is not user-replacable makes this device a
non-starter for me.......rf)

January 14, 2007
Digital Domain
Want an iPhone? Beware the iHandcuffs
By RANDALL STROSS
http://www.nytimes.com/2007/01/14/business/yourmoney/14digi.html?ei=5090&en=
2c5efe51f9d74dd8&ex=1326430800&partner=rssuserland&emc=rss&pagewanted=print

STEVE JOBS, Apple¹s showman nonpareil, provided the first public glimpse of
the iPhone last week ‹ gorgeous, feature-laden and pricey. While following
the master magician¹s gestures, it was easy to overlook a most disappointing
aspect: like its slimmer iPod siblings, the iPhone¹s music-playing function
will be limited by factory-installed ³crippleware.²

If ³crippleware² seems an unduly harsh description, it balances the
euphemistic names that the industry uses for copy protection. Apple
officially calls its own standard ³FairPlay,² but fair it is not.

The term ³crippleware² comes from the plaintiff in a class-action lawsuit,
Melanie Tucker v. Apple Computer Inc., that is making its way through
Federal District Court in Northern California. The suit contends that Apple
unfairly restricts consumer choice because it does not load onto the iPod
the software needed to play music that uses Microsoft¹s copy-protection
standard, in addition to Apple¹s own.

Ms. Tucker¹s core argument is that the absence of another company¹s software
on the iPod constitutes ³crippleware.² I disagree. It is Apple¹s own
copy-protection software itself that cripples the device.

Here is how FairPlay works: When you buy songs at the iTunes Music Store,
you can play them on one ‹ and only one ‹ line of portable player, the iPod.
And when you buy an iPod, you can play copy-protected songs bought from one
‹ and only one ‹ online music store, the iTunes Music Store.

The only legal way around this built-in limitation is to strip out the copy
protection by burning a CD with the tracks, then uploading the music back to
the computer. If you¹re willing to go to that trouble, you can play the
music where and how you choose ‹ the equivalent to rights that would have
been granted automatically at the cash register if you had bought the same
music on a CD in the first place.

Even if you are ready to pledge a lifetime commitment to the iPod as your
only brand of portable music player or to the iPhone as your only cellphone
once it is released, you may find that FairPlay copy protection will, sooner
or later, cause you grief. You are always going to have to buy Apple stuff.
Forever and ever. Because your iTunes will not play on anyone else¹s
hardware.

Unlike Apple, Microsoft has been willing to license its copy-protection
software to third-party hardware vendors. But copy protection is copy
protection: a headache only for the law-abiding.

Microsoft used to promote its PlaysForSure copy-protection standard, but
there must have been some difficulty with the ³for sure² because the company
has dropped it in favor of an entirely new copy-protection standard for its
new Zune player, which, incidentally, is incompatible with the old one.

Pity the overly trusting customers who invested earlier in music collections
before the Zune arrived. Their music cannot be played on the new Zune
because it is locked up by software enforcing the earlier copy-protection
standard: PlaysFor(Pretty)Sure ‹ ButNotTheNewStuff.

The name for the umbrella category for copy-protection software is itself an
indefensible euphemism: Digital Rights Management. As consumers, the
³rights² enjoyed are few. As some wags have said, the initials D.R.M. should
really stand for ³Digital Restrictions Management.²

As consumers become more aware of how copy protection limits perfectly
lawful behavior, they should throw their support behind the music labels
that offer digital music for sale in plain-vanilla MP3 format, without copy
protection.

Apple pretends that the decision to use copy protection is out of its hands.
In defending itself against Ms. Tucker¹s lawsuit, Apple¹s lawyers noted in
passing that digital-rights-management software is required by the major
record companies as a condition of permitting their music to be sold online:
³Without D.R.M., legal online music stores would not exist.²

In other words, however irksome customers may find the limitations imposed
by copy protection, the fault is the music companies¹, not Apple¹s.

This claim requires willful blindness to the presence of online music stores
that eschew copy protection. For example, one online store, eMusic, offers
two million tracks from independent labels that represent about 30 percent
of worldwide music sales.

Unlike the four major labels ‹ Universal, Warner Music Group, EMI and Sony
BMG ‹ the independents provide eMusic with permission to distribute the
music in plain MP3 format. There is no copy protection, no customer lock-in,
no restrictions on what kind of music player or media center a customer
chooses to use ‹ the MP3 standard is accommodated by all players.

EMusic recently celebrated the sale of its 100 millionth download; it trails
only iTunes as the largest online seller of digital music. (Of course,
iTunes, with 2 billion downloads, has a substantial lead.)

Among the artists who can be found at eMusic are Barenaked Ladies, Sarah
McLachlan and Avril Lavigne, who are represented by Nettwerk Music Group,
based in Vancouver, British Columbia. All Nettwerk releases are available at
eMusic without copy protection.

But when the same tracks are sold by the iTunes Music Store, Apple insists
on attaching FairPlay copy protection that limits their use to only one
portable player, the iPod. Terry McBride, Nettwerk¹s chief executive, said
that the artists initially required Apple to use copy protection, but that
this was no longer the case. At this point, he said, copy protection serves
only Apple¹s interests .

Josh Bernoff, a principal analyst at Forrester Research, agreed, saying copy
protection ³just locks people into Apple.² He said he had recently asked
Apple when the company would remove copy protection and was told, ³We see no
need to do so.²

Apple¹s statement is a detailed treatise on the subject, compared with what
I received when I asked the company last week whether it would offer tracks
without copy protection if the publisher did not insist on it: the Apple
spokesman took my query and never got back to me.

David Pakman, the C.E.O. of eMusic, said the major labels have watched their
revenues decline about $10 billion since a 2001 peak; meanwhile, revenue
earned by the independents has held steady. He said his service offers music
from 9,800 labels, each of which has embraced downloads in MP3 format. Only
four labels still cling to copy protection, even though piracy has not
declined, and those are the four major labels.

Mr. McBride, of Nettwerk, predicted that in 2007 the major labels would
finally move to drop copy protection in order to provide iPod owners the
option of shopping at online music stores other than iTunes; by doing so, he
added, they would ³break the monopoly of Apple² that dictates terms and
conditions for music industry suppliers and customers. Some encouraging
signs have appeared recently. Dave Goldberg, the head of Yahoo Music,
persuaded EMI to try some experiments last month with MP3 downloads ‹ a
Norah Jones single here, a Reliant K single there.

With sales of physical CDs falling faster than digital music sales are
growing, he said, the major labels ³have got to make it easier for people to
do the right thing² ‹ that is, to buy recorded music unencumbered with copy
protection rather than to engage in illegal file-sharing.

IN the long view, Mr. Goldberg said he believes that today¹s copy-protection
battles will prove short-lived. Eventually, perhaps in 5 or 10 years, he
predicts, all portable players will have wireless broadband capability and
will provide direct access, anytime, anywhere, to every song ever released
for a low monthly subscription fee.

It¹s a prediction that has a high probability of realization because such a
system is already found in South Korea, where three million subscribers
enjoy direct, wireless access to a virtually limitless music catalog for
only $5 a month. He noted, however, that music companies in South Korea did
not agree to such a radically different business model until sales of
physical CDs had collapsed.

Pointing to South Korea, where copy protection has disappeared, Mr. Goldberg
invoked the pithy aphorism attributed to the author William Gibson: ³The
future is here; it¹s just not widely distributed yet.²

Randall Stross is the author of ³The Wizard of Menlo Park: How Thomas Alva
Edison Invented the Modern World,² which will be published in March by
Crown.