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Jean-Louis Gassée Column

The Music Industry and PCs March 21, 2001 Around four years ago, the music industry started something called the Secure Digital Music Initiative. Apparently, it fizzled, because there is no evidence of it today. Yes, we have proposals and possible formats such as Sony's ATRAC, but in practice, MP3 is king. Real Networks and Microsoft are fighting it out in the marketplace with ambitious plans to provide complete encoding and playback solutions, while Napster tries to transition from perceived accomplice of piracy to partner of the "legit" music industry. But we still have no practical, standardized way to buy secure digital music. In theory, secure digital music lets buyers and sellers do business on attractive terms. The basic business model is similar to the time-tested telephone financial structure. The phone companies have a costly infrastructure but, once that is in place it doesn't cost the Baby Bell a red cent when I pick up the phone and dial, and they generate nice profit margins by charging me a few units of currency. Put another way, the phone companies have near-zero incremental costs. Returning to selling secure digital music online, we see the similarity. A relatively expensive infrastructure is needed, after that, selling me one hour of Mikhail Pletnev costs the company very little. On the buy side, I can choose between "transient" and "persistent" versions. The first one plays and disappears. The second is stored on my computer, playable at will, as with a CD, but impossible to duplicate or pirate -- hence, secure. So why hasn't security arrived? We can dispose of the loudspeaker wires explanation: you can record the music in "clear text" out of the speaker connector, thus defeating the whole purpose. That was always true and the Napster saga demonstrates that we prefer the easy digital reproduction process -- less work and better quality. The same is true for pirating CDs, which took off with the availability of CD-R and CD-RW drives. The real explanation is that PCs are easily hacked and the hack can spread almost instantly to millions through the same network used to trade pirated content. Let's assume for a moment that we have software on a PC that provides a secure environment for streaming, saving, and playing back digital music. A determined individual or team will always find a way to defeat the protection. We've seen, or rather heard, the fracas over unlocking DVD codes for playback on Linux systems. Once the defeating code is available, it spreads like a virus, with the important difference that many people welcome it. The problem doesn't lie with human nature and its instinct for picking locks and "liberating" property. No, the real trouble lies with the PC. It's too easily accessible, too easily modified to all kinds of ends, and too exciting a medium for experimentation to prove one's intellectual personhood. By now you've figured out where I'm going. The key to unlock, rather than secure, digital music and its market potential is the appliance. Few people hack the software in cars (actually, I'm looking for one such magician, but that's another story). Few take pains to pry open game consoles, replay TV recorders, or DirecTV boxes. Which is not to say that pirates will be discouraged by appliances, but the hacks won't spread the way they can and do on PCs. Herein lies one of the reasons for our Home Audio Reference Platform, HARP. That is, we believe appliances solve the secure digital music problem in ways PCs can never match.

Past Columns: March 7, 2001 Intemperance Makes the Suit Look Bad February 7, 2001 The Web Device of Choice at Home January 17, 2001 Transfer of Power December 6, 2000 One Step Closer November 15, 2000 Thoughts on Comdex 2000 November 1, 2000 Watching the Pendulum October 4, 2000 Plus çà change... September 6, 2000 Connected Appliances: A Field Report August 16, 2000 Sub-PC vs. Appliances July 12, 2000 The Victim Microsoft June 7, 2000 The Power of Words May 31, 2000 The First Be Shareholders Meeting May 24, 2000 Intellectual Property and Internet Appliances May 17, 2000 Spreading the Virus May 10, 2000 Numbers and Feedback May 3, 2000 Manufacturing Consent

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