Music players, DRM and the cell phone
The Record Industry has been very protective about distributing its content in digital form driven by their past experience with P2P networks and the mass of copyright material being illegally distributed.
Apple cracked this nut by committing to distribute content with Digital Rights Management that both encrypted the content and placed limitations on its use. These limitations are unfamiliar to music purchasers used to the "buy and own" model they were used to with records (remember them?) and CDs (about to follow the Dodo - just like the vinyl record).
Apple's iTunes has become the number one distributor of digital music... with a catch. Music you purchase through iTunes can only be played on your computer or Apple's iPods unless you are prepared to jump through a lot of hoops.
So far at least Apple hasn't been very proliferate in licensing their technology - no surprises here, Apple makes its profit from the iPod. So protecting the hardware revenue is completely consistent with Apple's past strategies.
The problem for the record industry and the player manufacturers is that this leaves Apple holding all the cards.
The problem for Apple is that the music player space is changing... the cell phone is fast catching on as the platform for the music player as it is the one device everyone carrys... remember the old days when you had a BlackBerry, a cell phone AND a PDA??? Gone - just like the dinosaur taking the pure PDA business with it.
The Shuffle end of the player market is under attack from the FLASH memory vendors looking to improve the functionality (to protect their ASPs) of FLASH drives - it won't be long before the chip for MP3 players get cheap enough to incorporate into a FLASH drive with the battery being contained in the cap protecting the USB connector.
So against this backdrop I read today's WSJ (subscription required I'm afraid) with great interest as EMI's Blue Note released Norah Jones latest single through Yahoo! as a pure MP3 - no DRM.
This and other efforts releasing pure MP3 content will play an important role in redefining how music is distributed and monetized. Watch this space!