Spiral Frog, a Universal-backed subscription music catastrophe, has apparently called it quits. Though the service was “free” (using an ad-supported model), it still suffered from the five things that pretty much all subscription-based music models share…

Read the rest of this article on theAppleBlog >>

As far as I’m concerned, this thing was doomed from the start. It was born, like many of the hare-brained music companies’ schemes, out of thinking they could out-do iTunes. It was just one of several ventures that some of the labels entered into in ridiculous attempts to damage iTunes so they could somehow get back to the wonderful world of selling albums, not singles, at $15 a pop, like the good ol’ days of CDs.

Read the rest of this article on theAppleBlog >>

This music is heavily DRM’ed — no subscription model can function without it. I suspect the idea that you still “own” it after the year is dependent upon one’s definition of the word “own”. I don’t think I’ll like Nokia/Universal’s definition.

When the full details come out, I bet we’ll discover that unless you continue a Nokia “Comes With Music” contract on a phone (in which case you’re still paying for the subscription), or never change the PC you’re using when the phone terms expire, you will lose the music.

Today we now have details on the thing. The relevant points: 

The user is only able to change registered mobile device or PC every three months for a further two years post termination.

After two years post termination (after three years from beginning of the subscription) users will be able to keep the content on their current device/PC but will no longer be able to re-download it from the service.

In short, as I suspected, I don’t like Nokia’s definition of the word “own”.

You “own” it as long as you stay with one of their devices and keep extending your contract. Once the contract is over, however, the music is stuck on the mobile device/PC you have at the time, and cannot be moved. Own it, my ass.

Now one of their brilliant schemes — Total Disaster (a.k.a. Total Music) — is facing scrutiny from the Department of Justice.

Personally, I think Total Music is, well, a disaster. Still, I’m glad Universal’s moves are attracting some attention.

A good article on The Lefsetz Letter about the Stones deal with EMI. One portion of the article makes it clear that Mr. Lefsetz is as fond of Universal’s Doug Morris as I am:

Doug Morris is waiting for Congress to approve blowing up traders’ computers, possibly lynching them in the town square, he thinks he can beat this thing, he believes the good old days are just around the corner.

Too true.

Let’s face it, next week we’ll all be discussing Macworld news, so I thought I’d review some tech headlines from the last few days and get them out of my system before the real fun begins next week.

Microsoft to spare the iPhone.

Whew! Apple can breathe a huge sigh of relief. Bill Gates confirmed Microsoft will not crush them by releasing an iPhone competitor:

“No, we won’t do that. In the so-called smart phone business we will concentrate solely on software with our Windows Mobile program”

Funniest thing about that quote is that Gates called it the “so-called” smartphone business. No doubt because it’s running Windows Mobile. I guess if it were running some other OS it would be a smarter phone.

Windows Vista and Office 2007 flunk classes in Britain.

The UK is discouraging the use of Windows Vista and Office 2007 at British schools:

“Upgrading existing ICT systems to Microsoft Vista or Office 2007 is not recommended,” said the British Educational Communications and Technology Agency, also known as Becta, in a report issued this week.

To be honest, had they gone after Vista due to its all-around failure in the marketplace, instability and bugginess I’d be all for this. This, however, seems less like a stab at Vista (after all, Office 2007 by all accounts is an OK product) and more a pitch for open source products.Not sure a thousand school systems all running a different flavor of open source OS and office apps would be the best thing.

Bon Voyage to the Voyager.

Verizon tries hard not to claim the Voyager is an iPhone killer. No doubt they do this to keep people from comparing the two. Still, their ads tout the “touch screen”, and they want consumers to think of them as similar. They just don’t want techies to do that because they know what’ll happen, and it did.In his review, Walt Mossberg was excessively kind to the Voyager regarding it using a 3G network. He’s not a fan of AT&T, so the fact the Voyager is Verizon gets a plus, and he even tags it as costing less, though it requires a mail-in rebate and he doesn’t take into account the data/voice plan! Whatever.OK, Walt, no one will accuse you of sucking up to Apple now because you’ve given the Voyager more than it deserves. You can be honest now:

And it lacks the iPhone’s ability to use Wi-Fi hot spots and home networks, which are often faster than Verizon’s 3G network.

It also has only about half the battery life; a smaller, lower-resolution screen, and just a fraction of the Apple’s internal memory.

the Voyager suffers badly in the area where Apple’s phone shines: software.

As with so many of the new feature-packed mobile phones, the Voyager’s user interface is clumsy and confusing, requiring too many steps to perform simple tasks.

its applications, such as the photo organizer, music player, Web browser and email program, are primitive compared with the iPhone’s.

That’s enough. You get the idea. The Voyager is no iPhone. This should have been obvious when all the ads show of the “touch screen” is it lighting up when touched. If they showed any more you’d know what a klutzy phone it is.

NBC Universal continues battle against consumer rights piracy.

NBC Universal has formed a coalition of companies to help develop anti-piracy measures. Good idea, guys. It’s not like that’s ever been tried.I mean, it’s not like anyone or any group or body developed some kind of, oh, let’s just call it Digital Rights Management, or DRM for short, with the aim of protecting content.

“A disproportionately large amount of [internet] traffic on our networks is peer-to-peer. The cost of that traffic is passed on to the user base,” he said. “We all have a stake in solving the [piracy] problem.”

Now that NBC Universal is on the case, I’m sure we’ll finally get solid, fair, un-crackable DRM for video that will be a win-win for everybody!Riiiiiiight.

Sysadmin hacks employer who didn’t fire him.

This one’s a real beauty, and gets better as you read it. Let me get this straight:

• Idiot thinks he’s going to get laid off.
• Idiot places destructive code in employer’s HP-Unix systems.
• Idiot does not get laid off.
• Idiot leaves the destructive code in anyway!

This is a riot, right? What a moron. Oh, but it gets better. So much better.

• Idiot’s code goes off on appointed day, but has a bug so it doesn’t work.
• Idiot fixes bug, and resets code for same date next year!
• Idiot’s destructive code is found by co-worker.
• Idiot pleads guilty.

Paul Thurrott finally asks a reasonable question.

Paul is a piece of work. After talking up the Zune 2.0 and following the Microsoft party line, he now decides to mention that it has so many things wrong with it that it needs serious work.Most of us not drinking Redmond Kool-Aid already knew that, but Paul spells it out pretty well.

Adobe updates Photoshop Elements for Mac (finally).

After more than two years (it won’t ship until March) and bypassing version 5.0 completely, Adobe is finally upgrading Photoshop Elements on the Mac.I’ve written about Adobe’s treatment of the Mac before, and this way-too-darn-long delay in getting a modern (and native) PE for the Mac is just one example.I ran PE on the PC before switching to the Mac, and it’s a fine product. I’m not crazy about the new colored interface but the feature upgrades look good even coming from PE 5 on the PC. Coming from PE 4 on a Mac they look great.I’m happy for Mac PE users, but I still think it’s ridiculous they had to wait this long for an update and Intel-native code. I don’t know why the Mac crowd puts up with that. As much as I liked PE on the PC, I’ll always explore alternatives on the Mac.

So the net is abuzz with the story that Warner Music will sell DRM-free music through Amazon.

Numerous headlines call it a coup for Amazon, saying they beat Apple to the punch. And many are proclaiming it as a change of heart for Warner. It’s neither.

I don’t understand why it’s hard for some people to see that the only motive behind all this DRM-free love from Warner (and Universal before them) is motivated by the labels’ hatred for iTunes, and their attempts to break its popularity in the online music market. Amazon did nothing special to get Warner’s music, it was practically given to them by Warner.

Of the four major labels, only EMI makes their music DRM-free on iTunes as well as Amazon. And they did so long ago, without having to first make fools of themselves in a few more failed efforts. I would say that they have seen the light and shown a change of heart, but Universal and Warner? No.Consider the following:

• It’s still not clear whether Universal has opened up their entire catalog DRM-free. That was certainly not the case when they initially made music available for Wal-Mart and Amazon.
• Universal has also made their music available “free” (though not DRM-free) via other means such as Spiral Frog (which is bleeding money) and the Total Music initiative. They dole parts of their catalog out free or DRM-free to everyone but iTunes.
• Warner is now making DRM-free music available for Amazon, but if it’s really a change of heart why do they care where the consumer gets the music? Why not make the obvious choice of also using the world’s largest online music store? Same goes for Universal.
• Does anyone think Apple wouldn’t offer Universal or Warner music DRM-free if they could? Please. The labels are withholding it from them (either outright, or via unreasonable terms) in an attempt to gain some alleged advantage. This advantage is supposed to be pricing, and yet Amazon sells for the same (or maybe even less) than iTunes!

There is no change of heart, and the labels’ heads are still securely positions up their rectums. Any move they make to break iTunes, which is raking in money for the labels, proves that.

It concerns me that the labels hurt their own profits and customers’ interests in an attempt to get back at iTunes. It’s stupid, deceitful, and wrong-headed thinking. Why aren’t the stockholders enraged? I’ve come to expect this from the labels, but when I see how some of the headlines spin this latest announcement it’s clear some people aren’t paying attention.

Bottom line is this: If the music is truly without restriction, why do Universal and Warner care where you get it? It’d by like taking their CDs (also DRM-free) and selling them at Best Buy and Target but not Wal-Mart! It would be insanity to not sell your DRM-free CDs through the largest retailer, and yet when it comes to digital music this is just what Universal and Warner are doing. It’s almost impossible to construct a scenario where the reason behind this is anything other than taking misguided shots at iTunes in the face of ignoring your own potential sales, profits, and customers. Why they’re not called on this is beyond me.

More tech headlines to chew over, with my comments.

Nokia and Universal Give Away Music. Not!

So today Nokia announced a new service that allows those who purchase certain Nokia phones will be able to download music “free” for an entire year.

What kind of music? Well, it should come as no surprise that Universal is all over this, which makes it all the more clear that this music will hardly be free. This is simply the first fruit borne of Universal’s Total Music initiative, which I wrote about here.

This music is heavily DRM’ed — no subscription model can function without it. I suspect the idea that you still “own” it after the year is dependent upon one’s definition of the word “own”. I don’t think I’ll like Nokia/Universal’s definition.

When the full details come out, I bet we’ll discover that unless you continue a Nokia “Comes With Music” contract on a phone (in which case you’re still paying for the subscription), or never change the PC you’re using when the phone terms expire, you will lose the music. And good luck burning a CD.

There is simply no way Universal is going to let you download tunes for a year and keep them forever.

Sales of iWork do impact Microsoft.

There’s plenty of proof that iWorks 08 has been a hit. But some claim that even though it’s taken 16% of the Mac market it won’t effect sales of Microsoft’s Office come their new version in January (or whenever they ship it).

I don’t necessarily disagree that the number of copies sold won’t be impacted much. However, the profit on those sold will be impacted. Look at the deals MS has felt compelled to make on Office lately (e.g., Pro edition to students for only $69; buy Office low now and get Office 2008 for only $7.95).

Bottom line is iWorks doesn’t need to impact Office sales so much as profits. Office is a major cash cow for MS, and taking a bite out of that begins to reduce the free money MS gets to print.

Thurrott Loves the Kindle.

Paul Thurrott wrote a glowing review of the Amazon Kindle.

What bothers me about the review is that he glosses over the real vendor lock-in represented by the device, yet howls frequently about Apple’s alleged (but non-existant) “lock-in” with the iPod.

Another Apple-basher says Leopard’s just like Vista (*yawn*).

This is getting old. It started with the usual MS apologists (Wilcox, Thurrott, Foley), and now we have PC Magazine’s hit piece.

The article is ludicrous, and like most of them simply mentions a personal experience and what was found on various message message boards as “proof” that Leopard’s just as bad as Vista.

But what about all the great reviews of Leopard (even from non-Apple-friendly sources)? He simply doesn’t mention those. Well, I’ll correct his oversight. In fact, I already did so when calling other MS apologists on this silly argument (see the link for numerous links to great Leopard reviews).

And what about all the horrendous news about Vista (from the day it was released up to right now)? Well, he doesn’t mention those either. I’ll correct that as well; there’ve been so many I’ll just pick a few:

• Windows Vista is essentially warmed-over Windows XP.
• Uninspiring Vista: How Microsoft’s long-awaited operating system disappointed a stubborn fan.
• The verdict: Leopard spanks Vista, continues OS X’s reign of excellence
• The majority of IT professionals worry that migrating to Windows Vista will make their networks less stable and more complex
• Windows XP Significantly Outperforms Vista, Tests Show

I picked the last three because they were written in the last four weeks. I did this in case an MS apologist wants to use the “Joe Wilcox” Vista defense. This is the claim that somehow all of Vista’s problems were early, and have since been cured (though Joe never specifies how they were cured). Well, he’s wrong. It still sucks.

It wouldn’t be hard to bring up another 40 or so articles praising Leopard or denouncing Vista or talking about them both where Leopard is judged superior.

Jermaine Dupri tells us what a good album is.

I’m a music lover, and I like albums, so reading this drivel was especially painful to me. A few thoughts on Mr. Dupri’s screed:

• You do not get to define what a good or great album is. I would like to think that most artists who create an album at least think it’s good anyway, don’t they? Don’t they?
• Only history can truly decide what albums are great, but good ones to the general public are noticed pretty readily. It’s already clear American Gangsta is not in that category.
• So it sold 425,000 units? What’s your point? If singles were allowed it would have sold, what, 250,000 of those? That’s the equivalent of 25,000 more albums whose money you left on the table. And much more importantly, it’s as many as a quarter-million potential new fans to enjoy Jay Z’s music, perhaps attend a concert, buy more of his work, etc., all because they got to buy one song and then wanted more. Do you get it now? You didn’t just shutoff immediate sales, but people who could become actual fans.
• To drive the above bullet point home, in case you didn’t get it: You need exposure. Selling a single song is a great way to gain that. What will you use instead, radio?
• You cannot tell your customer how to consume your product. Not in this day and age. You’re as out of touch as the record labels whose credo you’ve adopted.

As for all the crap about how you guys created iTunes, blah, blah, blah, you’re delusional. Sure, iTunes (and Amazon, Walmart, etc.) have nothing to sell if you don’t produce, but without them who’s going to sell the stuff? You? Um, no. You need an outlet for sales, and you need to connect with your fans. Crapping all over iTunes while telling me it’s all or nothing for an album is not the way to do it.

Yesterday I wrote about Universal CEO Doug Morris and how he claims all the mistakes the major labels have made (and are making) in regards to digital downloads are only because they “just didn’t know what to do”.

My post was based on an excerpt of a longer interview with Morris. The full interview is available on Wired, and suggested reading. After reading the entire interview, this is what immediately sprang to mind:

Oh. My. God.

It turns out the earlier excerpt wasn’t just a quote pulled to make Morris look silly. No, pretty much all the stuff he says in the interview will do that. Let’s take a look at a few other gems Mr. Morris had for us…

“”It was only a couple of years ago that we said, What’s going on here?’ Really, an album that someone worked on for two years — is that worth only $9, $10, when people pay two bucks for coffee in Starbucks?” Morris sighs.“

He should be bounced out of the CEO office for that remark alone. The “worth” of anything is relative, and one item’s worth has no bearing on another. Morris implies a cup of Starbucks is worth $2 so an album should be worth X times as much. I could just as easily claim a downloaded album is overpriced at $10 (it is) so a cup at Starbucks should be worth 35 cents!

Doug, things are worth what people are willing to pay. No more. No less. The rampant “free” music your industry all but encouraged this decade has devalued your property. You had your “Starbucks” in the 90’s when CDs were 18 bucks and people bought ‘em. That’s over.

“If you had Coca-Cola coming through the faucet in your kitchen, how much would you be willing to pay for Coca-Cola? There you go,” he says. “That’s what happened to the record business.””

Geez, this guy’s analogies are killing me. With all the free-flowing music on tap today people still buy CDs (declining sales) and digital downloads (rising sales) by the truckload. You’re simply pissing and moaning because the truck’s not as big as it used to be. It’d be the same damn size if you’d sold the digital goods eight years ago instead of trying to sue everybody, charge too much, stomp all over fair usage rights, and sucker us into subscription models only 10 people want.

Even after the lessons of the last eight years you guys are still encouraging people to look into alternatives. I’ve got news for you: When somebody finds an alternative and becomes comfortable with it, I don’t think you can get them back.

In this next quote, the emphasis is mine:

“”I wouldn’t be able to recognize a good technology person — anyone with a good bullshit story would have gotten past me.” Morris’ almost willful cluelessness is telling. “He wasn’t prepared for a business that was going to be so totally disrupted by technology,” says a longtime industry insider who has worked with Morris. “He just doesn’t have that kind of mind.””

Then why the f**k is he still the Universal CEO?!

And Doug, why admit you’re an idiot to the world? Are you as clueless about digital print as you are digital music? Did you think nobody would read the article and see your quotes?

I don’t think a CEO has to know everything, but I think he has to know how to tell whether he’s being BSed or not. Telling the world you’re a dope, and were therefore better off following your own stupid ideas instead of somebody else’s stupid ideas is not a particularly encouraging strategy. Maybe Doug will get lucky; perhaps Universal shareholders don’t read Wired.

Meanwhile, when discussing the iTunes deal with Apple:

“”Looking back, the best thing we could have done would have been to mandate one format,” he says. So why didn’t that happen? Morris is happy to field this one. “It never crossed anyone’s mind!” he exclaims. “We were just grateful that someone was selling online. The problem is, he became a gatekeeper. We make a lot of money from him, and suddenly you’re wearing golden handcuffs. We would hate to give up that income.””

AAAAAAAARRRRRRRGGGGGHHHHH!!! (Sorry, had to get that out of my system.)

So what’s the problem, Doug? You’re making a lot of money from iTunes, and would hate to lose their business, but you’re actively working on initiatives to limit their revenue and crush them.

Universal has all but admitted the incredibly successful iTunes store simply doesn’t charge enough and provides too many usage rights for the consumer. Their goal is to jack up revenue in any way they can via subscriptions (with very restrictive DRM), higher prices, a cut of the hardware profits, ads, or any other screwy scheme that comes to mind. Apple won’t play ball, so Universal wants to crush them and hop in bed with Microsoft, who’s already paying Universal a hardware cut of the Zune and never met a DRM they didn’t like.

I find it laughable that Universal reminds everyone the hardware vendors didn’t create the content, but never point out that the content providers didn’t create the hardware.

“”Our strategy is to have the people who create great music be paid properly,” he says. “We need to protect the music. I know that.””

The labels have been using artists for years; stop acting as if you’re a caretaker over anything other than next quarter’s profits. If you were taking care of artists, they’d be coming to your defense. They’re not. Instead, the successful ones are leaving the labels and forming their own deals (sadly, in some cases with the same digital download detest that Morris has).

Finally, this item in the article is particularly enlightening:

“Morris’ ascent coincided with the rise of CDs — the biggest boon the music business has ever known… By 2000, more than 900 million CDs were being shipped each year. Many of those were back-catalog purchases, as music fans converted to the format that seemed destined to make all others extinct.”

This tells us Morris was not some kind of genius, but rather simply rode the CD wave where it was all but impossible not to grow and rake in huge volumes of cash. The entire industry was doing it hand over fist. So what we’ve learned is not only that Morris isn’t very bright now, we don’t even know if he was particularly bright then.

I’ve written numerous posts about Universal’s stupidity regarding their moves in relation to digital downloads and sales. Not only their actions to prop up the unworkable music subscription model, but also those designed to damage Apple’s iTunes store even at the expense of selling more of Universal’s own product.

Through all these moves Universal’s ignorance has been evident. I always thought that ignorance was not because they were actual idiots, but rather the result of them unable or unwilling to “let go” of the old business models. They continued to believe (wrongly) they could get back to their glory days when they controlled everything and charged too much for it, but could sell it anyway because there were no practical alternatives.

But now, having read excerpts of an interview with Doug Morris, Universal’s CEO, I see the inability to let go was only part of it. The rest is that, as it turns out, they are idiots. What’s more, they knew they were idiots but made no attempt to do anything about it. This quote from Morris absolutely boggles the mind:

“”There’s no one in the record industry that’s a technologist,” Morris explains. “That’s a misconception writers make all the time, that the record industry missed this. They didn’t. They just didn’t know what to do. It’s like if you were suddenly asked to operate on your dog to remove his kidney. What would you do?””

Remove my dog’s kidney? What kind of f**king analogy is that? Your company is losing money, CD sales are in the toilet, you’ve piled one stupid idea on top of another (all doomed to fail) while simultaneously sticking your tongue out at the online store that’s making you money, and your excuse for this debacle is that you guys “just didn’t know what to do”?! Are you insane? Unbelievable!

Even if I bought the analogy, wouldn’t you rush your dog to the nearest vet or animal hospital? In other words, find people who do know what to do. Honestly, this quote conjures up images of sick animals writhing in pain around Universal’s offices because their management is too stupid to know what to do or find the required expertise. This guy kind of scares me now.

Universal shareholders, how can you read this stuff and not want to rush out and sell all your stock?

A couple months ago I wrote about yet another subscription model which, naturally, Universal was backing. Well, let’s see how the Spiral Frog effort is doing, shall we? Well, Read/Write web says this:

“SprialFrog, the big music industry’s experiment with free music downloads, is bleeding money and considering hiring bloggers to improve their public profile.”

Hmm, yes, good idea. Pummeling your users with ads isn’t working, so let’s get some of those Zune astroturfers to get on the Spiral Frog bandwagon.

“According to financial filings, required by the company’s investors and dug up by Joseph Weisenthal at PaidContent, the company reported a Q3 loss of $3.4 million on revenue of only $20,400, leaving only $2.3 million in the company’s bank account.”

Ouch! The sad part is that, even though this should come as a surprise to no one, still I’m sure it will. After all, even with the writing on the wall they seem to think that a few bloggers may be able to prop it up. Hey, guys, you could hire me. Oh, wait, you probably wouldn’t like what I write. Scratch that.

Let’s face it, the big news for Apple is next week with their quarterly earning call on Monday and Leopard release on Friday. Still, there was a lot of interesting stuff this week to comment on.

Greenpeace is more like Brownpiece.

Greenpeace slammed the iPhone in a whirl of propaganda and headlines I will not give them the satisfaction of linking to. If you want to read it, by all means use Google or Yahoo!, it won’t be hard to find.

It should come as no surprise that, after a few days, they admitted the iPhone is no worse than others, does not violate any Euro standards, and in fact is all well in keeping with Apple’s own stated environmental goals.

Of course, such an admission after the fact is like proclaiming guilt in the headlines on page 1, then publishing a retraction in column six on page 23. Their horrific accusations served their purpose; now they’re just covering their ass.

Their action is not surprising, and follows a pattern they’ve been using since Apple’s recent success made them an easy and obvious target for such BS tactics. This latest garbage from Greenpeace reveals once again what they truly are: Brownpiece (of crap).

Apple US Market Share Increase.

IDC and Gartner released their figures for PC sales this week. As usual, the numbers don’t exactly match (they never do), but one is likely as accurate as the other. Many people just take the average of both and call it a day.

By those standards, they’re reporting something over 1.2 Million Macs for roughly a 7.2% share in the US. Just as predicted last quarter (when they were #4), this was enough to land Apple solidly at #3 behind Dell and HP. The 1.2M compares to around 900,000 reported by IDC/Gartner last quarter. The 7.2% compares with around 5.5% last quarter. Excellent gains.

Worldwide, Apple still falls into the “other” category for both research firms. Last quarter they were just under 3%, for this one they might have hit that mark. It’s not that I don’t think worldwide share matters, and Apple’s is increasing, but the US is where the most profits reside for computers.

These are preliminary numbers — Apple will reveal their own figures Monday — but with IDC/Gartner showing great gains I would be surprised of Apple’s numbers don’t bear it out. Apple broke records in their last reported quarter, I think there’s a great chance they will do so again this time around.

Let’s do a quick check on Vista.

First, there’s a retailer (finally) coming right out and saying Vista’s disappointing sales are eating into its profits.

Perhaps even more interesting is an article claiming that Microsoft has issues with Vista on another level. Calling it a “fear factor” may be an overstatement, but in my case there’s no question concerns about Vista not working and playing well with my two laptops — less than two and three years old — are what has kept it out of my house. That same concern has kept it out of a lot of other houses, too.

There’s something to be said for Vista’s “midnight madness” sales at release being a bust (and the big profit upgrade boxes still gathering dust on store shelves), while Leopard is already the #1 and #2 software products on Amazon when you can’t even get it yet.

Consumer Reports gives Apple some Love.

CR frequently treats the Mac as some sort of freak in the PC world that will leave you cold and alone in a sea of Windows users if you buy it. They’ve been better lately, and usually give Apple high marks for support (hard not to since it’s a survey), but for the most part they’re not particularly friendly.

However, they’ve claimed that Apple’s Web site is tops for direct web computer sales. Not bad, and great timing for mom and dad looking to get Jr. a computer online for Christmas.

One word you don’t want to hear from your CEO.

Nokia’s CEO has said he’s “paranoid” about the iPhone, and its significance cannot be underestimated. I wonder if this wouldn’t make me as a stockholder a little too uneasy.

Look, I’ll be the first to admit that the Verizons and Motorolas of the world are morons for discounting the iPhone as if it’s nothing. Such an attitude reveals that they’re clueless, fail to see what’s going on around them, and lack a real strategy to compete. In that regard Nokia is miles ahead; at least they see the iPhone as a legitimate threat. Good.

However, one can swing to far the other way. I don’t want my company head to ignore the iPhone, but I don’t want him scared of it either. The fact is the company can’t make anything like it for another year or two, yet we have to combat it in some manner now. Quit trembling in fear and do something.

Universal proves how stupid they are. Again!

Universal continues to outdo themselves every day. Now they’re going to sell singles on USB drives. I’m not sure what more needs to be said…

Dear Universal Stockholders,

Below is a simple four-step plan to end your misery. As a music lover, I provide it to you free of charge.

1. Determine how much profit Universal’s top brass will blow though on ventures like Wal-Mart’s PC-only online store, the “ringle”, another subscription service (w/ Spiral Frog), the Total Disaster Music initiative, and now this USB (Unusually Stupid Business?) effort.
2. Review the overall chance of success for items in #1. Be sure to consider management’s track record on technical and PR debacles such as PressPlay years ago, bad-mouthing your biggest online sales outlet, calling your customers (and Apple’s) thieves, and joining forces with Microsoft on the failed Zune.
3. Come to the conclusion they’re pissing money away on dubious schemes that will fail while simultaneously avoiding the most obvious move of all: Offering their catalog online as easily available platform-independent DRM-free files at fair prices.
4. Commence rolling heads.

Best regards,

Tom

http://thesmallwave.com

BusinessWeek published a story about yet another move Universal is taking against Apple. Before we get to their latest, let’s review the recent shots Universal has fired:

• Pulled out of negotiations for iTunes contract extension.
• Supplied DRM-free tracks to Wal-Mart’s PC-only music store as a “test”. Not for Mac.
• Threw a boatload of DRM-free titles at Amazon in support of their AmazonMP3 store.
• The Amazon and Wal-Mart tracks were not offered DRM-free to Apple’s iTunes store.
• Teamed with SpiralFrog to offer “free” subscription music. You know, the exploding media that renders itself inoperable if you don’t visit the site often enough. Not for Mac. Not for iPod.

I wrote about the last item here, and the Amazon deal here. It’s amazing Universal changed their DRM views (for now) on selected titles — still a small percentage of their catalog — to spite Apple and hinder an online store that’s working, is popular, and making them lots of money! How greedy/stupid/arrogant do you have to be to potentially harm your sales in the belief that you’ll get back to the “good old days” of controlling all music distribution with an iron fist? And how pathetic do you have to be to do this while complaining about the very sales you’re hindering?

OK, enough review, let’s see what BusinessWeek says is next up Universal’s sleeve:

“Now, [Universal CEO Doug] Morris is going on the offensive. The world’s most powerful music executive aims to join forces with other record companies to launch an industry-owned subscription service. BusinessWeek has learned that Morris has already enlisted Sony BMG Music Entertainment as a potential partner and is talking to Warner Music Group… The service… will be called Total Music.”

Total Music? Total Disaster is more like it.

I can see why Sony would buy into this. After all, these are the guys who invented the CD root-kit and ATRAC, both disasters. They also spawned the ridiculous “ringle”, which will be a disaster when they bring it to market (I blasted it here).

As for Time Warner, they were the relatively “quiet” label until a week ago when they formally announced they can be as stupid as Universal. They’ve shown nothing in the way of original thinking and I’m sure would follow Universal down one of its many meandering paths.

“This isn’t only about Jobs; Morris badly needs to boost his business, and Apple is the one to beat.”

Dear Morris, APPLE IS SELLING YOUR PRODUCT! They’ve sold over three billion tracks, and statistically most of those were yours. When Apple sells one of your titles, you make money. And you spent zip for that profit; all you did was supply a source file. Do you understand any of this?

You should be helping Apple and iTunes, not wasting profits on building something inferior. You should attempt to leverage Apple’s success, not treat it as an enemy to turn your back on. That makes zero sense. Do you really think another subscription model and/or jacking up prices are your only options?

“And let’s not forget that existing subscription services have signed up only a few million people, vs. hundreds of millions of iTunes software downloads.”

The music labels have already forgotten this. This is why most of their initiatives revolve around very restrictive DRM and a subscription system. They keep chasing that dream.

“While the details are in flux, insiders say Morris & Co. have an intriguing business model: get hardware makers or cell carriers to absorb the cost of a roughly $5-per-month subscription fee so consumers get a device with all-you-can-eat music that’s essentially free.”

Oh, gee, another subscription service with another twist on “free”. While the SpiralFrog service is funded via ads, this new initiative will be funded by the consumer, having to pay for it in the initial price of the device. How the heck does this make it free?

“And though Morris hasn’t publicly blasted Jobs, his boss at Universal parent Vivendi is not nearly so hesitant. The split with record labels–Apple takes 29 cents of the 99 cents–”is indecent,” Vivendi CEO Jean-Bernard Levy told reporters in September. “Our contracts give too good a share to Apple.”"

Dear Levy, you don’t create the music, you don’t promote it, you don’t host it, you don’t distribute it, you don’t support it, and you built no infrastructure for it. In essence, you spend nothing yet rake in 70% of the price. It’s indecent alright, but not in the way your twisted view sees it.

Apple gets 30%, and from that must fund the infrastructure to make this happen. What’s that leave them? Half? Not bad, but nowhere near 70. Are you begrudging them any profit at all? The service they provide isn’t worth ~15% to you? You get nearly five times their profit, do none of the work, and it’s not enough? You’re even more out of touch than Morris. The truth is, you are indecent.

“With the Total Music service, Morris and his allies are trying to hit reset on how digital music is consumed. In essence, Morris & Co. are telling consumers that music is a utility to which they are entitled, like water or gas.”

Aren’t water and gas more like, you know, necessities? And don’t you usually have just one source? It’s not like I went online, shopped around, and then picked the best gas and water companies to service my home. It’s a dumb analogy, and shows that BusinessWeek should maybe mind another business.

To me, this is just another BS maneuver by the labels in a bid to get people to rent music. They want what the video guys have, but the difference in the two is pretty fundamental. People listen to their favorite music over and over. While there may be a few movies or TV shows watched numerous times, the majority are watched once or twice. This is why DVRs or renting flicks work so well. Video and music are different animals, with different experiences and totally different expectations.

“The big question is whether the makers of music players and phones can charge enough to cover the cost of baking in the subscription. Under one scenario industry insiders figure the cost per player would amount to about $90.”

So, right now an incredible music player with 4GB memory and video/podcast/game capability sells for $149. But they’ll sell an inferior one (no one’s made one better) with a price 60% higher, and justify it by saying the user can load it with DRM-infested music for “free”? Wow. Can you show me the dictionary being used to define “free”?

Oh, and let’s talk about the DRM they’ll be using. Can the user put this music on an unlimited number of mobile players? Of course not. Can they play it on up to five PCs? Don’t bet on it. Can they effortlessly burn it on CD? Hell no. Remember, folks, this DRM won’t be FairPlay. It’s going to be a subscription DRM. You do not own these songs; they must be locked tightly to the device or the subscription model is useless.

“Of course, Morris still needs Jobs. It’s noteworthy that Universal has not pulled its music from iTunes–Morris simply can’t afford to do that.”

But apparently he can afford to thumb his nose at Apple and their iTunes customers. I’d love to hear why Universal didn’t cut Apple the same deal they cut Amazon for DRM-free tracks. There’s little reason except a certain disdain for iTunes and those who use it. The labels have decided that iPod consumers (most of them are pirates, remember?) and their overwhelmingly favorite online music store must be the cause of their declining sales.

Personally, I think the cause of the music labels failure is a lot more simple. It’s the morons in charge. I’ve asked this before but it bears repeating: Where are the labels’ stockholders? Why aren’t they calling for these guys’ heads?

Here’s some reading for the weekend with a few of my comments.

Bill Gates: Music genius.

The New York Times seems to think Bill knows what he’s doing re: Online Music. My favorite is this quote from Bill at the conclusion:

““People are going to listen to a lot more music because it’s going to be easy to find neat new exciting music, its going to be easy to have your music with you, in the car, when you’re running,” he said. “It seems like there ought to be a way to translate that into an opportunity.””

Easy to find? You mean like via a one-stop shopping online store with music, movies, TV shows, free podcasts, and more? Listen to it when you’re in the car or running? You mean like if you could easily burn a CD for the car, or have a player that clipped to your running outfit? Hmm, yes, Bill, you’re so visionary only you can see that that could be translated into an opportunity.

Retire, Bill. Now. Seriously, you’ve been looking awfully foolish lately.

A new Zune requires new management.

Now that the Zune 2 is here, Microsoft can get down to what they do best: Bureaucracy. They hired another exec to toss at the problem. Remember, you can never have too many managers. Heh.

The secret behind why WGA was removed from IE7.

I’m glad we have Mary Jo Foley to question this, otherwise all us gullible morons would just assume MS told the truth when the IE 7 team says it’s because of this:

““Because Microsoft takes its commitment to help protect the entire Windows ecosystem seriously, we’re updating the IE7 installation experience to make it available as broadly as possible to all Windows users””

But Mary actually wonders if maybe there is another motive. Firefox is digging into IE, and perhaps Safari could gain ground as it improves in beta. So to Hell with WGA, we just want as many people to download IE and use it. We’re all about numbers; always have been, always will be.

What’s most amazing about this, and the little secret nobody will talk about, is that it’s absolute proof — if any were needed — that WGA has never been a GA to anybody but Microsoft.

Time Warner to Universal: Oh yeah? Well, we can stick our heads up our asses even further than you!

Can you believe another label is setting up yet another online store? No, I don’t mean one that’s been successful like iTunes. And no, I don’t mean one that’s DRM-free like eMusic. And no, I don’t mean one that’s a major new force (and going to be successful) like Amazon. Instead, I mean one that has everything that makes a music store fail:

• DRM? check
• Microsoft WMA files? check
• Won’t work with iPods? check
• Only half the songs of iTunes? check
• Build a new PC client player from scratch? check
• PC only? check
• Subscription service? check

Holy shit! This is absolutely unbelievable to me. How freakin’ stupid do you have to be? Where has TW been that last few years? This boggles the mind. Universal, I take back everything I said about you (I’ll just say it again later anyway), TW has got to be even dumber than you are. Amazing.

Thurrott again.

Didn’t want to spend a lot of time on this one since Thurrott is piggybacking on an article that itself is overreaching in its attempts to be “fair” about eight reasons why Windows users don’t switch to Macs. Still, Paul takes the nauseating and makes it worse.

For example, price is listed as one reason, and Thurrott drools all over it:

“Well. Actually, the truth remains: Macs are more expensive than PCs, they still are. Yes, Macs are often comparably priced to similar PCs. The problem is that PCs come in many, many more price points, and unlike with Apple, PC users are used to choosing exactly what they want and getting it. “

And yet, when it comes to MP3 players Paul says that you can only look at comparable devices. So what have we learned? As a shill, when it suits Microsoft you compare everything, when it doesn’t suit Microsoft you narrow the parameters at least until you can claim the #2 spot.

Number 5 (lies) and 6 (Windows bashing) and 8 (Mac users) in the list bother me even from the original author but Thurrott, as usual, piles on:

“This is, quite possibly, the biggest problem facing the Mac community. You may not realize how serious this is. But consider this:

Mac fanatics are like Detroit car lobbyists. They’ve spent decades doing nothing but propping up the Mothership, all for what they think is a good cause, but all they’ve really done is harmed the thing they love so much. People understand quality, and that’s why so many are swayed by Apple’s products. People also understand bullying, and that’s why so many ignore Apple’s products.”

Paul, Microsoft INVENTED bullying. Regarding lies, isn’t your leader Bill Gates quoted as saying Vista was the first OS with parental controls, and that every day the Mac OS is hacked? Every day! Didn’t Balmer claim the iPhone was the most expensive phone ever? Doesn’t Microsoft claim shipped units as sold? Didn’t the IE7 team just claim they removed WGA to “protect the entire Windows ecosystem” (see above, and do try to keep up)?

The fact that marketing people “lie” is a given everywhere. That somehow Apple has done more of this, or been more egregious about it, is such horse shit I wonder if you have to wash yourself after you type this garbage.

Microsoft’s sins are not just on paper. They’ve been dragged into more LEGITIMATE court cases (not the BS type that they and Apple have to suffer through) and have SETTLED more times than anyone cares to count. Did you read ANYTHING out of the Iowa antitrust case? And wasn’t Microsoft just busted big time by the EU?

As for bashing, go to the comp.sys.mac.advocacy usenet news group to see what your precious sainted MS community has to say and how they act, Paul. Heck, just go to Digg. As Microsoft is fond of pointing out, they outnumber the Apple supporters by 9 to 1. They make Apple “zealots” look like kids at Sunday school, and have for 20 years!

Oh, and don’t forget this FACT: The vast majority of Apple supporters have experience with Windows (as Microsoft is also fond of pointing out, most people have to use it at work). Meanwhile, what the vast majority of Microsoft zealots know about Apple and Mac OS X would fit under a gnat’s armpit.

Any blogger attempting to be “fair” and somehow equating Apple’s sins with Microsoft’s, or Apple’s supporters with Microsoft’s, is either trying way too hard to get in the “big boys’” sandbox, or has a disgustingly short memory, or is too young to be writing about it with any authority. Paul saves his “best” for last:

“while Apple’s fanatics might have been desirable or even necessary during the rebuilding years, now they’re just dead weight. Good riddance, I say.”

Screw you, Paul. I love the way you bash people in a post that includes a lecture on bashing people. Jerk. Your livelihood is crumbling around you. The only dead weight is on the back of your old ideas about technology and the supporting business models. It’s to those ideas you should be bidding “good riddance”.

Radiohead’s stance must be honored; Jobs is an ass who doesn’t care.

I like the Rough Type site, but in this piece I think Carr is way off the mark.

Basically he says that since Radiohead won’t allow singles to be sold (only albums) they can’t be on iTunes. This is true, and it’s a choice made by them and Jobs. Jobs wants singles (rightfully so, album buyers like me are a dying breed; people want singles).

I haven’t seen Radiohead badmouth Apple or iTunes about this, and I haven’t seen Jobs or Apple badmouth Radiohead, so what’s the big deal? Agree to disagree, and all that. They both have stances and stick to them. Seems OK to me.At first Carr even seems to agree with this:

“You can applaud Radiohead’s lonely stance, or you can, as Crunchgear recently did, dismiss the band as “a bunch of crybabies.” … And you have to admit that Radiohead’s motivation in protecting what it sees as the integrity of its works is no different from Jobs’s motivation in protecting what he sees as the integrity of his products.”

Exactly. A sound statement and, as I said, agree to disagree. Crunchgear is wrong. But then Carr says this:

“Jobs’s lack of concern for the desire of Radiohead, and other artists, to control how people experience their creations undermines his attack on the people who would alter the iPhone to serve their own purposes.”

WTF? How the heck did we get from Radiohead and Jobs both protecting the integrity of their works/products to Jobs suddenly having no concern for Radiohead and other artists? And, oh yeah, Carr throws in the iPhone from left field ’cause it’s all the rage these days.

That’s nuts and, frankly, the one paragraph simply does not logically lead to the other.

I like Radiohead and have no issue with them not wanting to sell singles. I don’t agree with it because I believe it’s outdated thinking. And the fact is no artist can ever tell me how to enjoy their art. Ever. But I appreciate both sides stuck to what they believe, and really don’t see how either can be “wrong”. But Carr apparently believes one must be “wrong”, and that it’s Jobs. Nonsense.

As for throwing in the iPhone, well, why not? Apparently every blogger was contractually obligated to post a scathing “we want third-party apps” and/or “Apple is evil and mean to developers” piece on the iPhone this week.

Well, except me, I’m non-union.

Amazon opened their MP3 store today, and it’s clear iTunes has legitimate competition since Amazon avoids the pitfalls that made other music sites a joke. However, through it all some curious questions arise, which I’ll get to below. Meanwhile, here’s why this new site is a valid alternative to iTunes:

Type:
This is a buy-to-own store, not a music-rental store. And there is no DRM. Enough said.

Brand:
This is not some entity you’ve never heard of. This is Amazon. Even though the system is beta, I tend to trust it more than a new company formed by groups looking to make a quick buck or fit a marketing plan. Further, even as beta I expect Amazon to have fewer glitches than a new company. After all, they’ve been doing this online sale thing for a long time (it remains to be seen how well they are at the download process, however).

Interface:
Works fine on PCs and Macs. While not as slick as iTunes’, the interface is pretty easy to navigate and will be familiar to anyone who’s used Amazon. I bookmarked the site, and occasionally used that to get “home” because an obvious way back was not available. Also, on a couple of occasions I found myself in the CD section of Amazon when that’s not what I wanted. Overall, though, it’s a pretty good interface for a beta.

Compatibility:
Since there’s no DRM, all files are playable on any MP3 device (your computer, iPod, CD, iPod, car player, iPod, Sansa, iPod, Zune, iPod, etc.).

Price:
Price is quite good. Lots of popular albums for $8.99, a dollar less than iTunes. They advertise albums for under $4.99, $5.99, etc., but that’s misleading since they’re EPs. You’re still paying ~90 cents a song. The iTunes store has lower prices on such “albums” as well. Amazon singles are 99 cents, better than iTunes because their DRM-free tracks are $1.29.

Quality:
All tracks are 256K MP3. The free track I got was 256K VBR LAME encoded, which is about as good as MP3 gets. However, the album I bought was 256K CBR with no information about the encoder. Clearly there’s some variance, but at 256K they should all be very good quality.

Selection:
Since this is DRM-free music, an initial offering of two million tracks is actually pretty good. It pales next to iTunes’ six million, but that’s not all DRM-free. Amazon’s site really shines a light on what is not DRM-free. For example, where’s Sony? And where is most of Universal’s catalog?

Clearly, this is not yet another “me too” site that will close with a whimper in 18 months. For now, it’s a legitimate place for me to browse when I want to buy an album, though by no means a slam dunk.
But something doesn’t smell right…

Amazon’s DRM-free prices are in line or even less than iTunes’ DRM prices. Think about that for a minute. The labels hate iTunes pricing — it’s what they constantly bitch about — yet here is Amazon with those same iTunes prices (or less!) for tracks having a distinct advantage.

EMI wanted more money from Apple for singles with no DRM, but seem perfectly satisfied with Amazon’s 99 cent price for the same thing. Why? Further, Universal has repeatedly said they’d never remove DRM, yet they tossed a few hundred thousand DRM-less tracks to Amazon at only 99 cents. What gives? Why the special treatment?

In my opinion this is just a push for Amazon to get customers while the labels hope to break iTunes’ grip on the digital music world. If the store gets popular, expect the labels to raise prices and, unlike Apple, expect Amazon to have little issue with this. The labels might also rollout more tracks, but with DRM. We know Amazon’s video site is in bed with content providers (most recently NBC); they clearly have no issue with DRM. I think if Amazon were seen as a threat to balk at any of this they wouldn’t be getting this preferential treatment to begin with.

So what’s going on, is this all just to spite Apple? That makes no sense because the labels gain nothing from it; all they‘d have done is create another iTunes store, or worse. Have they changed their mind on DRM? Then offer all of Universal’s tracks and, for that matter, the other labels’ as well. Have they decided iTunes pricing isn’t so bad after all? Then offer Apple the same terms. Do they just want to build a popular store with a partner who won’t argue over pricing and DRM restrictions? DING DING DING DING DING!! We have a winner!

Of course, I could be wrong, but something doesn’t smell right.