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  • Ian Ritchie : Scottish Business Insider

Radical moves at Apple's core - music downloads just got cheaper

THERE SEEMS TO BE an aura surrounding Steve Jobs, chief executive of Apple - a kind of 'reality distortion field' that exempts him from normal standards of criticism. The recent launch of Apple's iPhone demonstrated this superbly; press comment on the new product ranged from the enthusiastic to the orgasmic. But guys, calm down - it's only a phone! And it is uncertain whether Apple will do well entering a market already well served by other, pretty competent players, such as Nokia and Motorola.

Apple has certainly succeeded in dominating the business of downloading music onto personal music players with its iPod. The iPod has over 70 per cent of the world market and with iTunes it also owns the leading music download site.

Personally, I haven't bought much music from iTunes. On the few times that I did I discovered that the files were copy protected in a way that tied them to my computer and my iPod device. This means that I effectively didn't really own the music I had bought and paid for, because Apple could potentially change its systems at any time in the future and I would be left - music-less.

So I buy CDs in shops and put them onto my iPod. Bizarrely, it is often cheaper to buy a classic CD from a shop than to buy the tracks via a digital download and this way I will always have the music in future, no matter what device I use to listen to it. If you buy a CD published by Sony it will play just as well on Panasonic equipment, whereas if you buy your music from Apple iTunes, you can only play the music on an Apple iPod.

Consumer groups and governments around Europe have attacked this exclusive link between the iTunes format and the iPod device. The French passed a law last August, which gives regulators the power to order Apple to open up its formats to others and the Norwegians have just declared that by next October, music bought from iTunes should be playable on other devices. Apple is also under pressure from Holland, Finland and Germany to open up its file formats in order that music owners can have more confidence that they will be able to continue to play their music indefinitely.

Of course, many people download their music from 'peer-to-peer' sites for free - or I should say steal it, since no money is exchanged and the originators of the music, the artists and recording labels receive no reward for their efforts.

It is estimated that only 10 per cent of music downloads are actually done legally. It's a simple equation - buy a file legally and it will be heavily restricted about how you can use it, or steal it and no such restrictions apply. You are paying extra for a substandard 'crippled' version.

Steve Jobs has clearly been rattled by all this and has suggested a solution - simply remove the copy protection from music tracks. It's a radical idea, but it makes sense.

Arguably, Apple has as much to lose as anybody from such a move, but Jobs reckons that as, on average, only three per cent of tracks on iPods have been downloaded from iTunes, he can only gain by offering 'noncrippled' versions of music - I for one would certainly buy music in this way.

But, it requires the record companies to trust us.

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