Saturday, September 16, 2006

Paint Me Confused

A few things happened this week that, while all related, have left me thoroughly confused and frustrated. Here they are, in the most coherent order I can come up with:

  • First, Microsoft released the latest beta version of Windows Media Player 11. One of the reasons that the company may have released the software now is FairUse4WM, a utility making the rounds that very effectively strips the DRM off of most protected Windows Media files from version 9 on. I tried to use the new version of Windows Media Player to copy some MP3 files over to my trusty Rio Karma 20GB hard drive player. However, I got an error message telling me that Windows Media Player no longer supports the driver for the Rio Karma. My choices are to either get a newer driver or downgrade to Windows Media Player 10. Unfortunately, the most recent version of the Karma driver is from 2004, I've already got it, and Rio is out of business. Downgrading to WMP 10 isn't really an option, since any new DRM releases from Microsoft are likely to require WMP 11 , so I won't be able to buy any new music for my Karma from Napster, Urge, etc. (This might not be any great loss, but there you are.) So, my Karma's days are numbered.

  • On Tuesday, Apple announced a bunch of new products, including generation 5.5 iPods priced at $249 for 30GB and $349 for 80GB. The price for the 80GB iPod in particular is very impressive, and I haven't been able to find anything from Creative, iRiver, Archos, etc. to match it. So, is my search for a replacement for my Karma over? Not quite. Virtually all of my music library is in WMA format, since I was a Rio beta tester for a number of years and ended up buying my Karma for that reason. In addition to ripping my own CDs, I've been buying protected WMA tracks from Napster for a couple of years. Of course, the iPod doesn't play WMA tracks of any flavor, but iTunes will batch-convert unprotected WMA files into the AAC format used by the iPod. (As for the protected files, there's FairUse4WM, but I'd NEVER think about using that, would I?)

    However, before I sprung for an iPod, I decided to use iTunes to do a test conversion of some WMA tracks. I converted the tracks, and then queued them up in both iTunes and WMP 11 for some good old A/B testing on my PC with headphones. I hoped that recompressing the WMA tracks into AAC wouldn't cause audible artifacts, but I was wrong. The converted tracks were more "brittle," and some of the low-end was gone as well. There was even a very small amount of noise introduced by the process. So, my choices were:

    • Convert all the files to AAC and put up with diminished audio quality,
    • Re-rip hundreds of CDs into AAC, and then repurchase from the iTunes store all the music I bought from Napster and others, or
    • Buy a WMA-compatible player and stick with Microsoft.

  • That last choice suddenly became more interesting on Wednesday, when Microsoft announced more details of its forthcoming Zune player. It'll have a 30GB hard drive, will play a variety of audio and video formats including unprotected AAC, will be able to share files with other Zunes via WiFi (although, frankly, I couldn't care less,) and it'll be priced "competitively" with other media players. Given that the announcement came the day after Apple's, it was obviously intended to steal of that company's thunder. If the Zune's price will be "competitive," we can assume that it'll be closer to the 30GB iPod's $249 than the $399 price that was widely reported for Zune prior to last Wednesday. So, my search for a replacement for my Karma is over, right? Again, not quite. Some other details about the Zune came out that, if true, will end up taking it right off my shopping list:

    • Zune will have yet another DRM system that will work only with Microsoft's own Zune store. No other merchants need apply, and the format won't be shared with any other player manufacturer. Note to Microsoft: The iPod and iTunes store aren't successful because they're a closed ecosystem, they're successful despite being a closed ecosystem.
    • Apparently, Zune won't accept any other DRM system, including Microsoft's own WMP DRM. Now, honestly, I still can't believe this is true, but if it is, and if I can't even play my existing protected WMA files, there will be no Zune in my future.

I haven't even mentioned Microsoft's decision to coat everything sent from one Zune to another in a delicious DRM shell, even if the file is an unprotected MP3 with no rights restrictions. Once coated, the file will only play for three days in the receiver's Zune, so say goodbye to one person shipping a bunch of podcasts to someone else for listening to over a vacation or business trip.

I've finally become a victim of the format wars, stuck with an obsolete player and many audio files that may be obsolete in a few months. This is the inevitable outcome of DRM—sooner or later, you end up with obsolete content that you purchased and should have had the right to do with what you want, within the bounds of fair use. The more popular that digital media gets, the more frequent these Hobson's Choices will become—either spend a lot of time and/or money to continue to use your content, or stop using your content. So for now, I'm waiting to see what Microsoft really does and what other Windows Media players come out in the fourth quarter. Until then, I'll nurse my Karma along, and hope that it doesn't go bad.

Monday, September 04, 2006

A False Dichotomy

We’re constantly reminded about the battle between “new” and “old” media. How often have you heard that the old media just don’t get it? How often have you seen the leader of an old media company on the cover of Time, Business Week or Fortune? Increasingly, however, new and old media are acting the same, pursuing the same business models, and are even becoming the same companies.

The real dichotomy isn’t between “new” and “old,” it’s between advertising-supported and non-advertising-supported media. If you make your living by selling advertising, it doesn’t matter if you’re “new” or “old” media—you’re competing for eyeballs to sell to advertisers. By that rule, Google and Yahoo are in the same boat as News Corporation and The New York Times. All these companies also have non-advertising-related revenues, but the old media companies have several orders of magnitude more than the new media ones. CBS and Paramount are in two almost entirely different businesses—one makes its money through advertising, while the other makes its money through leasing and selling television shows and movies. Thus, we got the CBS/Viacom split, which acknowledged that the real difference is whether your business is or isn’t supported by advertising.

Google and Yahoo both successfully transitioned from free services to advertising-supported media. MySpace is now part of News Corporation, and is moving quickly to being advertising-supported. YouTube has to either pick a model soon or find an acquirer who’ll pick a model for it. The same is true of Digg, which has stuck its toe half-heartedly into the advertising-supported arena.

The question of “How will you make money?” is often seen as being crass, but ultimately, every Web 2.0 startup that hopes to survive has to either make a choice, or find a buyer who’ll make a choice for it. In the harsh light of reality, new and old media companies look remarkably alike, because they all make money in the same ways.