Summary
1) The announcement by EMI and Apple may have been over-hyped since the key issues that consumers have is one of cost and then of inter-operability on devices.
2) The EC announcement against Apple accuses it of restrictive business practices since it is not offering equal access to products and services in individual EC countries.
3) It is hypocritical for Steve Jobs to call on the major record companies to offer tracks online without copy-protection software - as iTunes/iPod is the issues as it does not work with competing services or devices.
Analysis
·The joint announcement by Eric Nicoli, EMI and Steve Jobs, Apple in London last week may have been over-hyped since the key issues that consumers have is one of cost and then of inter-operability on devices.
·The vast, vast majority of downloads are still via file sharing networks and are being downloaded for free. Clearly, more regulation enforcement and especially over coming consumer issues of cost and interoperability will help to counter this. To note, ISPs are not and should not be responsible for regulation enforcement.
·The rather conincidental EC announcement against Apple is welcome news, particularly for British consumers who have to pay the highest rates in Europe for downloading music. From an open market perspective, Apple is limiting choice for European consumers since consumers can only download songs from the iTunes website in their own country, preventing British users from taking advantage of buying the same track for a lower price in other European versions of iTunes. And so, British consumers of iTunes are paying over the odds (approximately 20%) and Apple is accused of restrictive business practices since it is not offering equal access to products and services in individual EC countries.
·Even if Apple hides behind the weak defence of commercial agreements with certain music companies stipulating certain copyright provisos, the mass of popular and current tracks may not come with such provisos. In any instance, the strength of iTunes in the European market, Apple has the clout and volume to work with the major music companies to operate a pan-European iTunes store.
·Although, the announcement of EMI singles and albums free from copy-protection software and with a higher sound quality being offered as a premium product, shows some innovation in the music download – but it is nothing less than consumers expect having been bred on CDs (and vinyl in my case). It is unlikely, that these ‘premium’ DRM free tracks will drive single music sales as they priced at a 25%+ premium to regular tracks already.
·It is hypocritical for Steve Jobs to call on the major record companies to offer tracks online without copy-protection software. However, iTunes/iPod is the issues as it does not work with competing services or devices. And so, consumers can only download songs from iTunes to iPods. This further limits consumer choice and, in my opinion, is a further example of restrictive trading practices.
