Nordic regulators to discuss legal sanctions against Apple

Quick, someone say, "If you don't like iPods and iTunes Music Store Music, don't buy them!" or "you can burn to CD and rip your songs back, so you can do anything you want!"... completely demonstrating your misunderstanding of the problems with proprietary DRM systems.

Gonna have to disagree with you there. The solutions you suggest (and which you imply are not solutions) seem to take care of the problems with proprietary DRM quite nicely. Although I guess it depends on concept of what these problems are.

Personally I don't see problems, but rather the strength and beauty of the free market.

Just because everybody fails competing with iTMS and iPod doesn't make Apple responsible to make the music playable on all other devices. But if they would open up FairPlay to competitors just because it turns out nobody can beat iTMS, then there has to be a licensing fee per sold device that goes to Apple I guess. It would increase the prices of competitor's music players. It would also strengthen the iTMS's position, but not the iPod's.

well it is true in some ways. But the bigger picture is having to comply with stupid laws. Government regulation is not a good thing in most areas. If people dont like buying proprietary, they shouldnt be able to force a company to change by law, they should try to change the company by just not buying their product. The problem is that competitors cant do as good of a job from Apple, yet are mad and want to use the government to force Apple to use their success to reward others that want a peice of their pie. Forcing Apple to open their DRM is as bad as patent sharks.

I believe that shetline meant that these were the solutions, and that DRM is misunderstood. Your response to that was a prime example of how easily things are misunderstood.
I also think that it would be a good idea for Apple to start considering a "Plan B" and develop a new revised way to handle the DRM concerns that seem to be plaguing the world market. If Apple at least develops something now, and has that in their back pocket, then if the market place someday changes (Imagine that!), then Apple would remain on top. This would be better than the scenario of the "Buggy whip companies" that were too slow to change when the auto changed the marketplace. \

thts not how i read it at all, he said if you think these are solutions that you do not understand whats wrong with propritary DRM. basically saying those dont fix the problem of it.

I read it the same way as doh123, since shetline didn't really give any indication of sarcasm in the last part of his comment. However, if I misunderstood you shetline, then I apologize.

Just how big is the Nordic market? Not one of Apple's most important markets and certainly not worth making major programming efforts in order to comply with what ever laws they dream up during their long, cold winter. I doubt if Apple will stay there if there is no relief from the government.

While I don't love DRM it's going to be there for legal music sales, which is far better than the mass of illegal music being passed around with malware (for the PC users) - the situation we faced before iTunes made legally buying music acceptable.

Well, If I misunderstood the misunderstanding of DRM being misunderstood... than I apologize to all who have plagued their eyes reading this. <noted sympathetic sarcasm> But none the less, it does make my point about how easily things are misunderstood.

Quality and ease-of-use are not always enough to beat Microsoft--not unless you look years into the future. Smart business moves are needed too, and Apple's ability to strategically choose WHEN and HOW to let others share their iTunes/iPod success is a very important factor to use against Microsoft.

But if it violates laws, that's that. Just make sure Microsoft is also sanctioned for everything they offer that only runs on Windows and not on Mac.

If they do this Apple will simply pull the iTunes store in Iceland.

This is my opinion (also posted in the french forum, but posted also here since I think it's relevant):


The best alternative to DRM is called TRUST.

Trust is what record labels used between 1968 (year in wich Philips invented the audiocassette) and Internet.

People always copied music via audiocassettes from their friends and nobody introduced drm on them.

The difference between then and now is not only internet but trust and quality of music. If i really like a band i buy their music. This is how it worked before internet and there is no reason why it should not work today.

Apart from this: Music today sucks much more than before.
90% of music out there is clone of a clone of something else. And this is a tunnel that has no exit, because it's the road that record labels chose since early 90's. Marketing. Quick money with boy bands. Quick and easy does not last and the results are here now.

So this is my opinion about alternatives.

1: Eliminate DRM. Go on trust. People will like that and music sales will go up. If you want to copy you will still do it. Anyway.

2: Stop producing crap music. People lose trust on you and won't buy from you anymore.

Simon

Technically, trust is the ONLY alternative to DRM, unless you count just not having any music sales at all. (think about it, either you put mechanisms into music to make copying difficult, or else you're trusting people, one or the other).

However, while it is undoubtedly the best alternative (since the only other alternative is no music sales), I think it's a poor second to DRM. Prior to Apple's DRM solution, file sharing networks were helping to create the mindset that music SHOULD be free. I had a hell of a time convincing anyone at college that there might be something wrong about it. I think that if that mindset had been allowed to continue, it would have eroded music sales to the point where it was not profitable to sell music. Instead, musicians would have to make their money from live shows and/or sitting with a mug on the street. Trust didn't work, that's why we've moved to the better alternative--DRM.

"2: Stop producing crap music. People lose trust on you and won't buy from you anymore."

There is a lot of good music out there - all types.

A lot shows up in musicals - Jekyll & Hyde is a good example. Josh Groban ain't that bad, neither is Il Divo. On the punk side Shades Apart did some good stuff (Eyewitness), but unfortunately faded away. There is also a lot of great existing music to be found if you take the time. Ella in Berlin is as good today as it was almost half a century ago - if you like jazz.

The challenge is finding what you like and that's hard these days because there is so much out there.

I don't like the RIAA, nor most of the junk on the radio either, but to be clear: are you suggesting that people only steal music they don't like?

I blame piracy on selfishness and dishonesty.

If you (hypothetical, not you personally) don't like music, you won't pirate it, and you won't buy it.

The music people steal--and buy--is music they like.

If you like it enough to have it in your collection, pay for it. You don't have some "right" to someone else's creative product for free, just because you don't like the contract they signed, or the price they choose.

And if it sucks so much, why would you want to steal it?

There's some missing logic there. If I create a song, or a movie, or a software program, or whatever, I have the right to sell it in whatever way I wish, through whatever business relationships I choose, at whatever price I name. If that price keeps most people away, that's my choice--or the choice of those I have elected to work with. It doesn't give anyone the right to enjoy my work without compensation, unless I choose to let them.

Hear hear!

That's a misunderstanding of the situation that existed, even before the cassette was invented.

There was no way that anything like DRM could have been implemented before the digital age.

No company was happy about the situation, but there was little they could do about it, other than to put copyright notices on their products, telling the user that it was illegal to copy.

Once it became possible to do "perfect" copies, the fear was (and it has been born out in reality) that copying would rise to unheard of levels.

There has never been anything in any kind of business relationship that has depended solely on trust. There has always been laws regulating what can, and can't be done. That is enshrined in our Constitution, and in the basic laws of almost every country.

Now, companies can physically attempt to prevent unlawful duplication of their work, and they have done so.

If people didn't break that "trust" so naively mentioned, then DRM wouldn't be required. But there are some people who like to believe, incorrectly, that they own the works in question, and that they can do whatever they want with them.

Those are the people to blame for DRM.

AB SO LUT LY!!!

oops!!

Very well said.

Much bigger than you think. Norway, Sweden, Denmark and Finland is about 25 mill, so about 10% of the US. Some of the richest countries in the world with the best "electronic" infrastructure, and also probably the region with the highest spending on electronic equipment pr. capita.
So it is not a small market for Apple to lose.

No it isn't - that's what makes it even more annoying!

What is the supposed aim of DRM?

To stop piracy

Are all of the tracks currently available on iTunes also available from P2P networks?

Almost certainly

It is very easy to get around DRM, if you don't mind quality loss, and judging by some of the stuff I've heard from P2P, many people using that source don't give two hoots about the sound quality. DRM will always be easily circumvented (with quality loss), because even if your DRM doesn't allow burning to CD (and subsequent re-ripping in DRM-free format), you can always just do an analogue loop-through recording.

Does DRM achieve its aim of stopping piracy?

No.

What does it actually achieve?

It pisses off legitimate purchasers of music, who do care about sound quality, such as myself.

A much, much, much better way of dealing with piracy is watermarking. A system such as this (which can survive analogue recording and perceptual coding, but is inaudible) should be used instead of DRM.

This is how it could work with iTunes:

Each iTunes account is given its own unique watermark key (just as current accounts are given their own unique DRM key). The music is not encrypted so can play on any device that can play AACs, on as many devices as you like. The watermark can only be "seen"/detected if you know the watermark key.

Make sure that users know that if tracks bought under their account are found on P2P networks, their iTunes accounts will be closed and they will be sued by the RIAA.

Watermarking is as simple to get rid off as of DRM. Already tried as part of SDMI... already cracked with little effort by a couple of grad students.

http://www.cs.princeton.edu/sip/sdmi/

Besides, you can fake watermarks and change watermarks the same way.
I'll change my watermark to yours and share a bunch of them on P2P and you'll get sued!

It's a mind game... encoders vs. decoders. In that game, anybody driven by profits like RIAA, doesn't have a chance. There will be plenty of grad students and other people who'll take up the challenge just for the hell of it!

I would argue that Apple's DRM, coupled with the successful RIAA suits against P2P filesharers has stopped quite a lot of piracy. Of course DRM can be circumvented, but the success of the iTunes music store has shown that if the price is right (and the cost of the alternatives is sufficient) the most people would rather just do things the legal way and avoid all the hassle of circumvention. On the other hand, if iTMS files contained no DRM, users would probably be much more likely to share them with their friends, (if it were as easy as emailing a file or even just making your iTunes music library accessible via P2P network, piracy of iTMS files would increase dramatically).

However, I think that while DRM decreases piracy, the biggest contribution the iTMS has made to the fight against piracy is the ability to purchase individual songs. I think that a lot of the reason people were turning to P2P networks for their music was because they didn't want to pay $15 for one or two good songs on an album.

Not the watermarking that I linked to. It is encrypted using AES-level encryption and impossible to detect or remove without the key - even the people who developed the scheme cannot remove it without the key.

Apple's current iteration of Fairplay DRM also remains uncracked, so even DRM can be pretty hard to crack, which is surprising considering Apple have to give you the DRM key in order for you to play your music.

Apple's DRM works like this:

All the songs are stored unencrypted on Apple's servers. When you create an account, keys are generated and transferred to your computer from the iTunes Music Store. iTunes keeps these keys in an encrypted keychain store. When you purchase a track, it is transferred to your machine, where your copy of iTunes adds the encryption with the key.

In the past, the DRM has been cracked by writing a client that pretends to be a copy of iTunes. You log in using this client, and iTunes Music Store sends you the keys. These keys can then be used to decrypt the files, hence removing the DRM.

With iTunes 6, Apple has changed the communication protocol between iTunes client and iTunes Music Store (it is now encrypted using an unknown method and unknown key), no one has worked out how to emulate it, so you can no longer get your keys if you are using iTunes 6.

The beauty of this watermarking scheme is that the end user doesn't have to have the key to the watermark, because the watermark doesn't have to be removed in order for the file to be played. iTunes Music Store could therefore add the watermark before transferring the file to the client, and the client need never be given the key to the watermark.

The system could only be circumvented by people managing to hack in to the iTunes Music Store in order to find and retrieve the watermark keys. In addition to the significant challenge of hacking, it also is much more clearly a crime in most countries, whereas even in the U.S. DRM circumvention is still a bit of a grey issue (some ruling have indicated the DRM circumvention to aid fair use is allowed under the DMCA).

This is not entirely true. What you wrote would be true if music was sold in a free market. Indeed, in a free market, a dissatisfied buyer can go elsewhere to buy the product he wants. Unfortunately, you cannot do that with music.

For instance, if I found that Madonna's latest record was too expensive as sold by Capitol Records, I could look at RCA's to find if they have the same recording at a better price.* But you know as much as I do that you cannot do that because there is only one source for the one product you are looking for (Madonna's latest record as an example). This is not in anyway or form a free market.

The problem is that the music market is a closed one : on one side you have the RIAA acting as a monopolistic conglomerate treating the end-buyer as an infinite revenue source, and on the other side you have the dissatisfied buyers that did not have any efficient means to counter-strike until MP3s came to exist (if you think cassettes were a satisfactory counter-strike measure, you haven't listened to a cassette recording recently !). To RIAA's dismay, the frustration of the end-buyers prove to be extremely important and the retaliation of the end-buyer when he could finally retaliate shook the RIAA on its base. As a good monopoly, however, the RIAA reacted monopolistically : by increasing the control on its products, instead of lowering the price back to the levels they were in the vinyl days (most realistically the gripe of most end users).

What's more, your statement leads the reader to believe that it is the musician who choose the price and the means to market. The problem is that this is far from being true. The reality is that the musician are as much prisoners of the RIAA as the end-buyers are... So the artificially inflated price of the CDs are RIAA's decision, not the musicians... And guess where all this money is going ? Hint : not to the musicians !

(As an aside, I am not against anyone making a profit : that a record company makes a profit on the record they helped bring to market, this is OK. There is some work done, there is an "entitlement" to retribution. The problem with the RIAA is not the fact that they profit from the music market. The problem is GREED.)

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* The record company name chosen randomly, I don't have any idea of the relationship between these companies in real life if they still exist ! And of course you understand that I am not talking about record stores here, but about record companies. All the record stores have the same Madonna recording by the same record company. So there is only one source for that music. Even if the outlets are various, that doesn't make the music market any more free.

So do other online stores have to make their songs playable on the iPod? Or is it the iPod has to be able to play songs from other stores?

Easy answer: sell non-DRM mp3s and say 'the government made me do it'. Then the record companies will pull their contracts.

Seriously - why doesn't the government go after the record companies and not allow them to force these kind of contracts (which require DRM)??

If they file a lawsuit against Apple they should go after Microsoft too. Currently WMA with DRM only plays on Windows and their Zune seems to be exactly like the iPod where other players won't be compatible.

Before tapes, and vinyl that was the only way musicians made money.

1. Piracy ensures the record buisenesses deliver good quality music, kind of like the press is keeping the goverment in line, (they do in denmark) If you download a hit and you dont like, you dont buy it. With piracy constructed stars (e.g. boybands) are harder to make.

2. Piracy dose not destroy music, piracy spreads creativity! Music will still exist just in another form.

3. Pirats were the first to have a working democrecy, the killed raped and stole, but men and wemmen were equal, and everybody shared. In the dawn of record buisnesses WB universal, and all the others were seen as pirates, now its a billion dollar buisness. What im trying to state is that piracy is a stage of anachy between to ways of doing stuff.

And by the way they are attacking every big DRM online music store here in denmark not only apple.

You are completely wrong.

Taking an example, let's say you want to buy a computer. Lots of companies make computers. But if you want an HP, you have to buy it from HP. You can get something very similar from DELL or Lenovo, but it won't be exactly the same as the HP. In a similar vane, it is unusual for an artist to be unique, and if someone does appear with a "new sound", you can bet that if it's successful, it will be copied rather quickly (witness Coldplay, followed by Keane, Snow Patrol etc. etc.)

If you think Madonna's music too expensive that does not give you the right to steal it.



A huge problem with this deeply flawed argument is that the RIAA is not a monopoly, it doesn't even sell any music. The RIAA is an association representing many music labels in America.

A second problem is that you have gleefully ignored the options open to artists of self-promotion or signing with an independent record label.

A third problem is that you have implied that because major labels don't pay some of their artists that well, that gives you the right to steal the music, so the artist then gets absolutely nothing! Very weird logic.

A fourth problem is that you've trying to represent a group of companies producing a product and consumers buying said product as a "war". What is up with that?

I hate to say it, but people with this kind of asinine attitude are precisely the reason the RIAA's and IFPI's existence is still justifiable to this day.

Shame on you.

Yes, our consumer agencies (I speek for all Nordic countries in this question since they are quite similar, i.e. Sweden, Norway, Denmark, Finland and Iceland) are in most cases doing a really good job. They fight for us consumers against companies and stores that go too far in their maltreatment of individuals.

In the case of Apple and iTMS though, this is definately not the case - all customers are treated equally and are therefore free to choose alternatives on the market. Also, there is no maltreatment here since the functionality/limits of the product are thoroughly declared. This is not what the agencies were intended for, and most of us Nordic citizens do not agree with their action in the iTMS-question.

But for all of you in the rest of the world to better understand us icy people, I will give you a few hints:

1) People up here are extremely envious of anybody who is having a better life than you. It doesn't matter if they have worked for it and deserve their success.

2) The Nordic countries should not be underestimated when it comes to consumer electronics, especially not when trendy lifestyle products and entertainment are involved. Trends spread really fast up here, and people put a lot of money into these kind of products. We have a population which is about 10-15% of the USA. The big difference is that almost every single person up here have the money and the interest in buying these products.

3) Despite our wealth, some people are real misers up here (or call it econimical if you like). If there is a cheaper product claiming to do about the same thing as a more expensive one, then it's automatically also better. These people don't even have a clue what I mean when I say that cheap persons often end up with junk or pay more in the long run anyway. These people wear yesterday's clothing and use Windoze. Thank god they don't represent all of us, because Apple is definately not to thank for this. ...

4) ... As a matter of fact, Apple in Sweden is doing a really terrible job. I often wonder if they exist at all up here. They seem to miss every nice business opportunity, and are not seen in the press ever - not even to comment on things like this consumer agency issue. This, and the cheap people, is the main reason why M$ is thriving up here. And in the lands of M$ you will always find a lot of Apple grinders. This is why iTMS is targeted by the consumer agencies, while other companies doing similar business are not. Take for example all the manufacturers of inkjet printers. They explicitely prevent usage of ink cartridges across brands. By putting ID microchips in each cartridge they limit their usage not only to specific brands and models, but even to specific geographic regions. In this way they can tackle each market with their own individual pricing, effectively hindering the free market and making some consumers pay more than others. Do we hear the slightest squeek from the consumer agencies in Scandinavia here? No, wouldn't dream of it. Maybe it's because HP, Canon, Lexmark etc make their voices heard up here, as opposed to Apple's president in Scandinavia - Oscar Bjers or whatever he's called. Really poor business decision to have one single president for all Scandinavian countries. He is quite fair though, since he's certainly doing an equally terrible job in all our countries.

So, in essence this whole iTMS issue is due to envious and cheap, but wealthy, people in the lands of M$ where Apple is trying to mark it's puny territory with a rusty flagpole upheld by a wimp who doesn't understand why people are laughing at him.

You just pretty much stated that they don't have one. *

Well, as long as people are breathing there is a business opportunity. It's only up to the clever ones to take it.

No, you misunderstood. We are cheap, but if you can show us the added value, at least we can afford it. Problem is Apple doesn even want to get our money(no advertising).

On complitely different note, can any one give any real reasons why different iTunes sites have different songs? Many always answer that it's because of marketing, but that is such a stupid reason. I can understand different pricing, but if someone want's to buy a song without advertising, In my stupid head it only sounds good for music labels. In best case they would get benefit of viral marketing.

Record labels insist on licensing songs on a per-country basis. This is sometimes necessary because different countries have different negotiators and distributors, but most of the time, it's really just a (semi-illegal) attempt at controlling the markets.

In any case, the necessity of per-country stores is not Apple's doing nor in Apple's interest; they don't have a choice.

You are completely wrong, and I knew very much that someone was going to compare music to cars or computers sooner or later. The problem with your way of thinking is that you view music as an uncreative product. Like a computer or a car. Music is not "a product like any other". If I want to buy a luxury car, I can go to Mercedes, BMW, Volvo, Lexus, etc. Obviously, I cannot a Volvo build by Lexus, but it will be a car of the category "Luxury". I may prefer a brand to another but they'll be all driven to work in the same fashion and in the same amount of time ! Music, on the other hand, is a creative production resulting of the work of an individual, and this individual cannot be replaced. However you slice it, music cannot be commoditized like a computer or a car is. I'm not a big fan of Madonna, but I use her as an example because she is often cited as an example of commercial music. But even if it is true, if someone was to replace the woman named Madonna by some other woman singer and call her Madonna, everybody would notice. Hence music is not an interchangeable product.


I never said that I thought that Madonna's music was expensive. Like I said in my example, I said that I could think that the record sold by "Capitol Records" is too expensive. You might have forgotten, but when you buy a record, you actually buy just that : a record. Madonna is still the owner of the music, and "Capitol Records" is the owner of that particular recording found on the record. (Once again the names are fictional I didn't check to see with whom Madonna is recording, this is irrelevant to the discussion.) So, as I said, in a real capitalistic free market one would have many record company selling the same singer, and then the end user could choose the product they want, at the price point they want. And as I said, if you think Madonna chose the price her latest record was sold, you don't know a thing about this industry ! I never said I wanted to steal anything, by the way, that's your conclusion !


Of course, we all know that. This is why I wrote "acting as a monopolistic conglomerate". Please look up the word conglomerate in the dictionary. (Hint : Tiger has a great built-in one, so you don't even have to get out of your chair !) Members of the association decided of a conduct, and it is in the best interest of the members to adhere to this conduct. I could also have used the word "cartel".


And you are gleefully ignoring that any record company, however "independent" it may be, has no interest whatsoever in changing the current rules because it generates a tremendous amount of money from a captive audience. (Until MP3s, you had to go through a record company to buy your music.)


Artists, even well known ones, make most of their money during tours and shows. Once again, though, I never said I wanted to steal music ! I said I wanted to be able to choose from whom I want to buy my music, at the price point I believe is adequate and/or from a company I believe has respect for the artist, etc. Hey I could even decide to pay more ! (After all, I bought a Mac when I could have bought a Dell...)


You and I both know that this is not a war per say. This is not Vietnam or Iraq in anyway, shape or form. But it is a relationship where the consumer had nothing to say (and was powerless) until MP3s became prevalent. If you absolutely want to make a comparison, you could compare the consumer in that model to the beaten wife. But one day the beaten wife said "that's enough" and took back control of it's side of the relationship. Had the record company been only "mildly" abusive instead of "wildly" abusive as they have been ever since the switch to CDs then the MP3 phenomenon would have never been so pervasive. (The higher price of CDs were initially blamed on the higher cost of production, but everybody know this was never the case and the price of CDs never came back to the price of vinyl LPs (even in today's dollars) anyway, so guess who is being greedy ?)

Just for the sake of completeness : I am not a musician myself, but the majority of my family are musicians. So let me tell you that I hear about this more often that I'd like to !

Anone of you know a record label called K7? www.k7.com (they were on iTunes with some stuff). They release great suff, and very good electronic music. The kind indie media like pitchfork gives gret reviews.

This is a statement from them:

Copy protection kills customer relationships, That's why, from now on, !K7 releases will carry a new logo: 'NO copy protection - respect the music.

Only those to whom respect is given show respect themselves

As an engineer, I find the suggestion that computers and cars are uncreative products somewhat offensive.

The music industry is highly competitive with literally thousands of record labels and tens of thousands of artists competing for your dollars. To try and argue that it doesn't work in a capitalistic way is rather bizzare. The product is music (the fact that it is more creative than some other products in neither here nor there - it doesn't matter), there are thousands of companies producing the same product.


Plenty of independent labels offer their music in DRM free formats (from e.g. eMusic) and are thereby trying to change the "current rules" when it comes to DRM. I know that many of them would like to be able to sell their content through iTunes and Plays For Sure Music Stores (e.g. Napster) sans DRM, but Apple and Co. won't let them.



That fight is definitely up to the artist, not you. The business savvy ones (e.g. U2) are able to negotiate decent contracts.