02 April 2007


Well, not exactly RIP - Rest In Hell maybe more appropriate.

Today's announcement is a great demonstration that Steve Jobs' Apple has learned from its past mistakes about failing to open up key technologies at critical times.

For consumers, the great advantage of this announcement, beyond of course the obvious DRM and quality issue is that it will move the world towards an MPEG-4 world. That is an open world - not governed by any single company. Perhaps people (and journalists) will finally twig that neither of the A's in the synonym AAC stand for a computer company! For Apple, the victory is that the world did not end up with WMA and a comfy lock-in between the content providers and Microsoft dictating just about everything about how, when, where and for how long we could use the material we'd bought. Essentially global adoption of WMA would have squeezed Apple and indeed any other non-Microsoft device out of the equation. The significance of this cannot be underestimated, but I suspect it will never be seen that way as we have no insight into the parallel universe in which WMA took over. And, note to Norway, along the way, not a single consumer has been harmed in the making of this story!

Just as importantly, it should cement MPEG-4 as the standard rather than leaving the lowest common denominator (MP3 - a 16 year old format) as the "future" of sound. Most listening tests give AAC-coded material the best possible ratings of any lossy format with well-coded 128kbps AAC close to lossless. (If you don't believe me, check the Dolby site, some audiophile sites, and Wikipedia, who can point to these tests). Only the very highest levels of MP3 encoding and WMA Pro (which is not in common use in players) even come close to AAC at the same bitrates.

I've no doubt that Apple will continue to sell content ONLY in AAC format, and so any stragglers in the portable player market would be foolish not to support it. And furthermore, many music stores would be best advised to adopt it in order to maximise the music quality for the same bitrate (when compared with MP3). Those using WMA will be faced with the choice of using MP3 or AAC if they wish their music to be compatible with the dominant music player on the market today. Apple's choice of (and pushing of) the latest open MPEG standards has paid off this time and we are all beneficiaries.

There is of course the slightly inconvenient issue for such stores of having still to support DRM'd music until the other companies relent. That is an advantage that Apple has squeezed by this move. But this is great news for independent stores and labels who will make the most of this.

For Apple, apart from the defeat of WMA, they open up the digital download market for iPod users to many more companies, so on the one hand they would seem to be loosening their hold on the digital download market. But, as Steve pointed out in his "Thoughts on Music", it's more important for the digital market to be on a level playing field with CD. Apple have music retailers such as Walmart in its sights. It is not looking backwards at the download competition (it regularly compares itself to Amazon, Borders etc, rather than to Yahoo Music, and other download peers). It would rather have 30% of the music market (100%), than increasing its already massive share of the download-only market that would be permanently limited in scope to perhaps just 10-20% of the total market in a DRM world. Conveniently perhaps, it should also help to reduce concerns of the (misguided) competition authorities which had threatened to cause consumer confusion and waste a lot of Apple resources fighting.

Is it self-serving for Apple? Yes, of course - that's what they're about (as any company should be in commerce). But once again, Apple have shown that by moving in the direction that favours the consumer, they position themselves to benefit too. That is in stark contrast to its arch competitor.

With greater adoption of MPEG-4 this should also help Apple in the next battleground of video where WMV (and Microsoft IPTV) need to be neutralised. I'm sure that's where Apple has it's sights on. MPEG-4 AVC (or H.264) is the open way forward, is again better than any other existing technology out there, and needs to win out.

From a selfish perspective I have never found Apple's DRM to be limiting in any way, and I had no concerns that if they did abuse their position, there would be plenty of solutions from legal to not-so-legal that would come to the consumer's aid. In that regards, the bigger thing for me is the move forward in music quality. I still like to be able to listen to the best possible version of a song in certain situations while having the convenience of small size for others. With 256kbps AAC, I see really little downside compared with CD, (though I generally found it very hard to distinguish 128kbps AAC from real CD in a few listening tests).

Now, with the quality issue sorted (which I didn't necessarily expect), the convenience of online purchase/instant gratification has levelled the playing field if not tilted towards the future. With easier competition between music stores, we can look forward to greater innovations including such ideas as "Complete my album" introduced just last week by Apple which is a unique download-only differentiator (can't be done easily with physical media). Expect to see more variation in offerings including bundles of music, video, concert offers, and digital books that only the internet can provide. These are the sorts of initiatives that can breathe life into the music industry and hopefully signal an intent to grasp the future rather than defend the dead-end single/album status quo.

This is a great announcement for music loving consumers, for the music industry, for Apple and for any number of innovative small companies out there (eMusic, Bleep, etc). Well done to EMI for showing some nerve here. Hope the other 3 from the industry cartel will grasp the nettle!

Update: Added link to EMI press release for those not on Planet Earth.

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1 comment:

tomj said...


I agree with your comments about the AAC encoding that is the default importing format on iTunes. It is really pretty good. I imported a few CDs recently with the lossless format, and then I did an ABC listening test:
(a) CD
(b) lossless iTunes
(c) AAC 128k iTunes

I did the comparison using the new AppleTV through my home theater system. I can't claim to be an audiophile, but I really coudn't tell the difference. They all sounded grreat to me.