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Did Apple use its online music monopoly to prevent much smaller competitor Amazon from landing music deals? The U.S. Department of Justice is investigating.  (Source: Dave's Whiteboard)
Apple's anti-Amazon moves may cost it some big fines

When it comes to the digital music sales market, services like Amazon or Zune Pass have made a minor splash, but Apple has long dominated the market.  Over the last two decades, antitrust regulators in the U.S. and Europe have imposed fines and restrictions on Microsoft and Intel to try to prevent them from abusing their dominant position in several markets.  However, they have cast a largely blind eye on Apple's iTunes -- until now.

Antitrust investigators with the U.S. Department of Justice are conducting an extensive inquiry into Apple's online music business, interviewing Apple employees, internet music company employees, and music label employees according to the
New York Times.  At the core of the investigation is the allegation that Apple applied pressure to force music labels not to grant Amazon.com access to exclusive tracks to help grow the online retailer's fledgling music market.

A previous investigation was conducted several years back in the European Union, examining Apple's iTunes pricing practices.  The investigation's conclusions were highly critical of Apple, but did not levy any fines -- unlike recent EU investigations into Microsoft and Intel.

In March, it was reported in 
Billboard magazine that Amazon.com would be getting certain songs a day before they were widely released.  It would put these songs in a special promotional section dubbed "MP3 Daily Deal."  According to the article, Apple hated the idea and threatened music labels that participated.  Specifically, it vowed not to sell the songs featured in the promotion on iTunes -- a much bigger marketplace.

ITunes reportedly owns 69 percent of the online music market, according to the NPD group. The next closest competitor in the online market is Amazon, which holds an 8 percent share. The remaining 23 percent are split up among smaller players.

In 2007 Apple had a mere 12 percent of the total music market (both online and offline), but it recently became the largest single seller of music in the world, with 26.7 percent of the overall market.

Daniel L. Brown, an antitrust lawyer at Sheppard Mullin Richter & Hampton states, "Certainly if the Justice Department is getting involved, it raises the possibility of potential serious problems down the road for Apple.  Without knowing what acts or practices they are targeting, it’s difficult to say exactly how big a problem this is, but it’s probably something Apple is already concerned about."

Apple now has dominant positions in several markets -- tablet computing (iPad), portable music players (iPod), smart phone applications (iTunes App Store), and online music (iTunes Music Store).  Thus it has leverage to use its position to damage competitors, if it should so choose.

The new investigation is at least the fourth antitrust inquiry into Apple.  The U.S. government is also investigating Apple, Palm and others to see whether the companies illegally agreed not poach each others' employees (Apple's CEO Steven P. Jobs secretly suggested such a truce, which appears to be illegal).  The government is also investigating Apple's ban on Flash for the iPhone or iPad and its decision to block out ports of Flash titles to native iPhone code.  And there's also a pending investigation about whether board members serving on both Apple's and Google's boards violated antitrust laws.

ITunes first launched in 2001 and has long been on the forefront of the push for legal online music downloads.  Apple has sold over 10 billion tracks on iTunes to date, and has become one of the biggest revenue sources for the struggling music industry.  Apple also has supported a number of smaller independent artists by promoting them and giving them tools to expose their work to a broader audience.  Apple also has recently made some steps to increase competition, such as allowing streaming music services such as Pandora and Rhapsody onto Apple devices.

Spokespeople for Apple and Amazon would not comment on the inquiry.  Gina Talamona, a deputy director at the Justice Department, also had no comment.



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Digital Music
By dukeofoil on 5/26/2010 11:24:41 AM , Rating: 2
I refuse to buy from Apple's Itunes or any digital music source. I buy the full CD or DVD or Blueray Disc and fully intend to take advantage of the higher resolution in my listening experience. If I am using a portable device I will Rip to that format, but for the most part I listen on a full-blown system.

Setting that aside, advancing technology is making the need for a compressed format for digital music unnecessary. As storage capacities increase, their associated costs decrease, and battery capacities go up, there should be no need to segregate media purchasing into compressed, reduced quality music, versus that in native recording formats. No one should have to buy a disc, or other media based native recording, and a compressed digital format simply to be able to satisfy the portability requirement. Unless the RIAA and others of that ilk prevail in controlling the markets through wrong-headed law, one should be able to buy a single natively recorded content media form and use/listen to that content (in that recording format) on a multiplicity of devices under Fair Use. The idea that an MP3 or MPEG4 recording is in some way different than the original and worthy of a separate purchase is a fiction. It is a bit like selling an original oil painting (or more appropriately, a high quality print) to someone and insisting that they also pay for a photograph of that painting/print to carry around in their wallet!

Compression based portables will one day have the same cachet as an 8 Track, and compressed format content will have turned to digital dust. Apple can then turn to marketing the content in its original format just like other retailers.




RE: Digital Music
By Azure Sky on 5/26/2010 1:36:16 PM , Rating: 2
not really, flac/ape/ofr/tac all are lossless and compressed, with PROPER decoders you literally cant tell the difference, with a bad decoder you can, but you can also have same problem with a crappy cd player(i know i had 2 crappy cd players years back...sounded bad....)

I also dont feel lossy formats are all bad, MP3 sucks, AAC isnt "bad" but IMHO it isnt great either.

I use Ogg Vorbis for my portable use, using a proper encoder like the latist aoTuV 5.x encoder you can drop bitrate VERY low and 99% of tracks will still be transparent even to the "golden ears club" and their $500 or higher earphones/headphones, the tracks that have issues you can up the bitrate for, Out of close to 3000 tracks on my fuze I have maby 6-8 tracks that where problematic, and recoding them from flac to higher rate vorbis was a matter of a 3 clicks and 10 seconds(or less)

Wav is a dead format IMHO, same with BMP images and the like, Flac and PNG(among many others) are replacing uncompressed formats with lossless compressed formats, yes storage media is getting cheaper and cheaper per GB, but Thats still on reason to use uncompressed formats when you can have lossless compression, not only do compressed files take up less space, they also are quicker to move, and in portable devices compressed formats(lower bitrate) use less power.

quick example would be my buddies iRiver h340(upgraded with a 160gb drive) that gets days of use on ogg, flac eats batt life pretty quick, you have to charge it once a day when using flac, with WAV you see yet another drop in batt life due to bitrate, I only know this because he was going to use wav or flac for all his massive music collection but changed his mind after testing it, the tests lead him to decide to use max rate vorbis since that would allow him to put most if not all his music on his player without any quality issues.

NOTE: I do agree that formats like iTards...I mean iTunes lossy SUCK DONKEY Schelong but using them as a reason to say compressed formats are like 8track is way off base, NOT ALL COMPRESSED FORMATS ARE EQUAL!!!!


RE: Digital Music
By gralex on 5/26/2010 2:04:53 PM , Rating: 2
Damn, now I look retarded! I left my reply to go make a cup of coffee and you beat me to it:)

FLAC is only lossless by self proclamation. It's CD quality (at best) and that's not something to write home about.


RE: Digital Music
By afkrotch on 5/27/2010 1:42:39 AM , Rating: 2
I prefer mp3. It works on everything. I don't care if the only person who can tell the difference between an mp3 and flac is a dog.


RE: Digital Music
By gralex on 5/26/2010 1:50:38 PM , Rating: 3
I'm with you, but...

Sorry if this seems like nitpicking but which original format? CD audio is 16-bit, 44.1kHz. Studio quality is 24-bit, 192kHz. And video? I won't even go there:)

DVD was an improvement over VHS. But CDs over vinyl? They sound about as crap as the iPod's bundled headphones. Long ago the record companies spent a decade trying to convince us that the human ear can't really destinguish the difference. So (as if to say, "Fine! If you're gonna be like that") people invented the Mp3 & Napster.


RE: Digital Music
By dukeofoil on 5/26/2010 3:27:45 PM , Rating: 2
Sorry if I wasn't clear by being non-specific about "native" formats". I was deliberately not citing one format over another (audiophiles for the last 60 years have been falling all over themselves arguing nit-picky nuances), just that highly oversampled digital audio can be faithfully excellent in the extreme. Faithful reproduction (way beyond vinyl) is possible with proper sample rates and recording techniques... and there will be (note I did not say TODAY) no reason for any form of audio compression, lossy, lossless or otherwise, when inexpensive storage capacities can hold more "native format" audio than you can listen to in a liftime. All of these storage techniques arose from the need to maximize available storage. When that is no longer necessary, then whatever new "native format" emerges can be shared among portable and non-portable devices without the need for separate mercantile streams to the end-user. This makes the Apple ITunes business model seem somwhat questionable in the long term.

I find it humorous how much time and energy is expended discussing sampling methods with audio when the weak link is the audio transducer. I remember in the 1950's when the HiFI magazines were touting how wonderful it will be when electostatic and plasma speaker systems replace the magnetic voice coil. Oh, well....


RE: Digital Music
By afkrotch on 5/27/2010 1:50:42 AM , Rating: 2
For me, I prefer to keep my music at a smaller size, as I put more than just music on my mp3 player. The music on my mp3 player takes up a little over 4 gigs. That's 320k mp3s. The rest of the 32 gigs is storing pictures and videos. It also has a mini-SD slot on it, which has another 16 gig card with videos.

Course, I use my player to listen to music, watch movies, and temporary portable storage.


RE: Digital Music
By gralex on 5/27/2010 5:13:53 AM , Rating: 2
Like I said, I'm with you. As for your reply, even more so:)

We really DO need far better audio to share between our portables and non-portables. Make a track 20 or even 50MB (and 200MB in the near future), I honestly don't care (you already mentioned all the reasons why this makes sense). Online music stores should be flexible enough to provide such service, though. I might be wrong but I think what you are really trying to get at is that we should be able to "upgrade" our old media with some sort of discount, when a new format comes along. I'm with you on that one too.

My only objection is a trivial one. You can listen to an analogue source all day long (no problem), whereas digital gives you something of a mild headache after a few hours. No matter what the sampling rate, it's somehow exhausting in the long run.

But since speakers are your pet peeve and (I'm happy to say) you enjoy being a black sheep among audiophiles, have you heard of Genelec? Give 'em an audition, I promise it won't be a waste of time.


RE: Digital Music
By sprockkets on 5/26/2010 10:22:03 PM , Rating: 2
quote:
Studio quality is 24-bit, 192kHz. And video? I won't even go there:)


FYI, they still use analog tape, because it is simply the best.

Video? 35mm?


RE: Digital Music
By gralex on 5/27/2010 5:44:15 AM , Rating: 2
quote:
FYI, they still use analog tape


Are Tascam & Nagra aware of this!? But seriously, tape really is far sexier sounding just not the de facto standard anymore:(

You are right about the video remark though, I meant to say image. 70mm, 35mm, 16mm vs a ton of digital formats was exactly the reason I didn't go into it.


RE: Digital Music
By Lazarus Dark on 5/26/2010 9:19:39 PM , Rating: 2
"Apple now has dominant positions in several markets -- tablet computing (iPad), portable music players (iPod), smart phone applications (iTunes App Store), and online music (iTunes Music Store). Thus it has leverage to use its position to damage competitors, if it should so choose."

lol. And yet... I have never had the slightest interest in any of those services/devices. There have always been alternatives. Most of them better quality.


RE: Digital Music
By MrPoletski on 5/27/2010 9:08:37 AM , Rating: 2
When they start offering 96Khz/24bit - or even better 192Khz/32bit - uncompressed/lossless music downloads then I'll be interested, until then I'll stick to my old ways.


"The whole principle [of censorship] is wrong. It's like demanding that grown men live on skim milk because the baby can't have steak." -- Robert Heinlein














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