Huibert-Aalbers.com

As most probably already know, some countries in Europe (Norway, France and the Netherlands among others) are putting pressure on Apple to force it to open the Fairplay DRM system. They argue that digital tunes should be playable on any digital music player, much in the same way that vinyl records could be played on any turntable.

There are some flaws with that reasoning. After all, I do not recall similar threats to Sony when they released Betamax (and more recently the ATRAC audio compression algorithm) or Nintendo who offers downloadable games that only work on their console. However, I think that everyone agrees with the fact that if Fairplay protected tunes could be played on any device, that would be better for consumers. After all, that would offer everyone the freedom to choose a player fron a different brand once the time comes to upgrade to newer gear. However, even though I am all for more freedom, I do not want this (small) improvement to result in higher prices. Why am I concerned?

Today, Apple can afford to leverage its large iPod installed base to put some serious pressure on the majors in order to keep the price of digital downloads relatively low. Therefore, because Apple makes money on the players, not the music, legal music downloaders have actually benefitted from Apple’s near monopoly. If Apple is forced to allow digital music interoperability, the leverage is lost and the majors will be able to set higher prices, much like what they have done with ring tones (in conjunction with network operators), and regain control of the online music distribution business.

So, who stands to win if EU regulators manage to force Apple to open up Fairplay? In the short term this could seem to be good news for SanDisk, LG or Philips (a Dutch company), among many others. However, there isn’t much money to be made in a totally commoditized market. The real winners would be the music labels, specially the majors (think RIIA), who would regain full control of the market. Where does that leave consumers? We have to choose between Steve Jobs (a benevolent dictator) and the freedom to choose a music player while living under the grip of the music tyrants.

For now, I sincerely prefer the Steve Jobs option. Why? Because right now Apple makes the best music players and because once you start buying a lot of digital music, like I do, the price of each song becomes more important than the price of the player. Of course, things could change in the future and therefore such a measure could become necessary. However, I would really appreciate if EU regulators tried to break the music oligopoly before suing Apple. Otherwise there is a clear danger that the remedy could be worse than the problem they are trying to fix. As a Dutch citizen I would like to see my government reconsider its decision.