Tuesday, December 13, 2005

Steve Jobs and his DRM

So far Steve Jobs has not licensed his “FairPlay” DRM to anyone except Motorola so they could build the “ITunes Phone”. Is this decision hurting Apple or helping them? I believe the decision is hurting his company.

I’ve read Apple’s AAC wrapped in their “FairPlay” DRM is the most popular downloaded music format on the Internet with all downloads coming from their ITunes Music Store. From what I understand Jobs only uses ITunes as means to sell IPods. Imagine if he were to license his DRM to other content providers like Napster, Yahoo!, and Peer Impact. I believe all these services would embrace the format due the popularity of IPod and sell all their music in this format. In return, this would increase Apple’s music format dominance and sell more IPods. I think Apple would also sell more IPods if it supported more formats and DRM containers such as media technologies that Microsoft has developed. (Maybe Microsoft won’t license their technology at a “fair” price so that’s why the IPod doesn’t support it.:) ) I also have to believe that Microsoft is thanking Apple for not licensing their DRM to other content providers because that leaves Microsoft's formats in the game still.

I’m sure Steve Jobs has some good reasons for not licensing his DRM and in the short term it would be hard to argue them, but I think he is settling. He could be more of a dominate force in the music format market then he currently is and with video becoming more and more popular he has the opportunity to dominate that format as well. But, I think video might be the format that final convinces Jobs to license his DRM. I don’t believe that everyone is going to want to watch movies and TV shows on a 2 inch screen going forward. There are plenty of devices out there today that people will prefer to watch there videos on and they don’t support Apple’s DRM. The IPod is great for music and Apple won everyone over with its look and ease of use, but they are forcing “A square peg into a round hole” when it comes to watching video on an IPod.

Next week I will talk about alternatives to the video IPod and devices that you can buy for your home that are not even in the same category as the video IPod for watching video, listening to music, and viewing photos that are stored on your home computer.

Tuesday, December 06, 2005

DVD Window

This past Friday my wife and I wanted to watch Star Wars III – Revenge of the Sith. I looked at her and see looked at me and together we said, “Who’s going to drive to Hollywood Video to rent the movie” and in the same breath we both said, “Not it”. Then I thought, “Why can’t I download the latest movie releases so I don’t have to leave my house”. It was 9 o’clock at night and we just put the kids to bed. We were both tired from the week, but we were really in the mood to watch the movie. I’m sure the scenario above just doesn’t pertain to my house. I’m sure there are plenty of people that would rater order a movie from their house instead of driving to the video store.

I believe the Movie Studios see the value in shrinking the video window and are trying to come up with a solution, but it must be hard to change something that has been in place for so long. There are many reasons for shrinking the video window, but here’s a list that I have come up with.

Fighting Piracy
By shrinking the window when movies are released for rental, sale, and on-demand it will decrease the need for people to make pirated DVD’s available on the Internet. If a movie was available for download at the same time you could rent or buy the movie in stores, I think people would be less interested in downloading pirated movies for a couple reasons.
- The legal version of the downloadable movie would be much higher quality then the pirated version.
- The price for the downloadable movie would cost much less then the physical DVD.

Lower Prices
The distribution costs for making a movie available for download is much less then the physical version. Digital versions of the movie don’t take up shelf space and don’t accrue the costs necessary to create the physical DVD.

Unlimited Inventory
Ever go to your local video store to get one of latest releases to find out they are all gone? Well… this wouldn’t happen in the digital world. Especially with the delivery technologies that Peer Impact possesses. Peer Impact can support an unlimited number of downloads at one time. If Star Wars III was released on the Internet and there were thousands of people that wanted to watch it that day they could without leaving their house. Using Peer Impact’s content delivery technology every person would be involved in the distribution of the movie which allows it to scale infinitely while also getting it to every person as fast as their Internet pipe could handle.

Personally, if I could order all my movies from my house I would never go to a video store again, especially if they were cheaper.

Giving Users What They Want
With the coming of Home Networking solutions in the near future more and more users are going to want this convenience and they will have 2 options. 1. Download a pirated version of the movie they want to watch. 2. Download them from a trusted source in high quality and at a reasonable price.

Much like the person who delivered ice to your house became less and less useful due the invention of the refrigerator the same will happen to video stores. We all know the day is coming were you don’t need to go to movie store to rent or purchase a movie, but I hope it happens before the piracy problems get too big.

Here is another good article talking about the same thing:
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