Interoperability lost, except at eMusic

In a comment to his blog post The strange world of digital music, Nicholas Carr acknowledges the role that Apple’s proprietary DRM scheme has played in fending off competitors to the iPod, but opines that …there’s no reason that you couldn’t have a single DRM standard. Well, yes, and there’s no reason in theory that you couldn’t have a single OS standard. However DRM schemes, like operating systems, are choke points for the respective markets of digital music and IT, and in each case companies are highly motivated to pursue proprietary approaches in the hope that they’ll be the market winners and reap the benefits thereof, including in particular the ability to extract the major portion of the value in that market. Microsoft won that jackpot in IT, and so far Apple has done so in digital music.

As Paul Resnikoff puts it in his Parting Shot column Interoperability Lost,

The music industry–and in particular major labels–have long painted a vision of seamless interoperability, one that would allow flexibility and hassle-free portability. During a recent CTIA roundtable in Los Angeles, executives from Sony BMG, Warner Music, and Universal Music argued that DRM itself isn’t the problem–it’s the lack of communication between the competing systems themselves. …

But with the latest news from RealNetworks, and Microsoft before it, that vision is starting to look like a pipe dream. The reason is that each digital music retailer–whether it be Apple, Microsoft, or RealNetworks–has narrow business interests that run contrary to consumer needs. And as the battle for market share gets more intense, so do the usability restrictions related to each service. Now, each company wants to command a tight relationship with the consumer by building an insular, walled garden.

Resnikoff goes on to argue that this balkanization harms all the digital music stores, including the iTunes Store, because it causes consumer confusion and a reluctance to buy legal music downloads. He neglects to mention that Apple doesn’t care one whit about any harm to the iTunes Store, because Apple makes the vast majority of its revenue and (especially) profits on the iPod, and iPod users primarily get their music from CDs and P2P networks.

The silly situation is that (as I’ve previously written) the labels have a simple way out of the prison Apple has locked them into: stop insisting on DRM schemes, license their releases as DRM-free MP3 tracks, and thus allow any digital music store to sell into the iPod user base, removing Apple’s FairPlay DRM scheme as a choke point. It would be suicidal for Apple to try to protect its position by designing iPods to not play MP3 files; as I noted, MP3 is the one digital music format that Apple doesn’t control but can’t afford not to support.

Of course, in their obsession over controlling their customers the major labels aren’t going to do this, thus leaving it to “upstarts” like eMusic to build a digital music business that works with every device on the market today. There’s no interoperability lost in the world of independent music; it’s a paradise by comparison.