iPod Insanity

On the day the iMac G5 was announced, Apple’s Web site slyly promoted the new model as “from the creators of the iPod.” But even with the tail wagging the dog, if the new iMac is even remotely as successful as the iPod, Apple will have no complaints. Not only has the wildly popular iPod-iTunes combo sent Apple’s stock through the roof, it seems to have the unexpected side benefit of driving the competition insane.

At RealNetworks, pugnacious founder and CEO Rob Glaser apparently has gone completely nuts following the realization that Apple is kicking his ass. RealNetworks owns Listen.com and the “celestial jukebox,” Rhapsody, which features subscription-based streamed music and downloadable music that can be burned to CDs. Earlier this year, Glaser e-mailed Apple’s Steve Jobs to suggest that the media titans would fare better in the coming online music war with Microsoft if the iPod were re-engineered to be able to play music downloaded from Rhapsody. Allegedly, Glaser threatened to team with Microsoft if Jobs declined his overture, which Jobs did. And when, mysteriously, Glaser’s e-mail found its way to the New York Times—there were suggestions that Jobs himself forwarded it to the paper—the snubbing of Glaser went public, big time.

No real surprise. Glaser’s been dissin’ Jobs for a while now. In a Wired magazine interview last year, before iTunes expanded into the Windows world, Glaser condescendingly thanked the Apple CEO for kick-starting online music sales: “It’s hard to design a better scenario for us than what Apple did” in creating the iTunes store, Glaser said. “It’s great having Steve Jobs get the word out since we have the best service for the 95 percent of the people who don’t use a Mac.”

Glaser rejects the Jobs mantra that people don’t want to rent music, they want to own it. He fervently insists that streaming and music-by-subscription are the future of online music, telling Wired that one of his company’s “challenges” is to “teach consumers about digital music.” But with RealNetworks joining other iTunes wannabees at the back of the pack, it’s Glaser, not music buyers, who’s been taken to school.

Undaunted by Apple’s rejection, Glaser kicked the rivalry up a couple of notches by releasing Harmony—software that allows any digital player to play music downloaded from Apple’s music store. Apple likened RealNetworks to a “hacker,” and threatened legal action, but Glaser still wasn’t done. He created an ersatz dot-org consumer Web site, “Freedom of Music Choice”, self-described as “a destination for consumers to learn more about the issues of music choice in the growing digital music arena.” Glaser’s overheated site—“Consumers are getting a raw deal with the status quo in digital music”—features a logo graphic of an iPod as an unlocked padlock and a call to action: “Don’t let Apple break your iPod! Sign up and tell the Apple [sic] you want the right to choose where you get your music.” There’s also a mission statement vowing to help consumers “break the chains that tie their music devices to proprietary music downloads.” You can almost hear the patriotic music swelling in the background. And for a limited time, it’s available for just 49 cents! Yes, Freedom of Music Choice even includes a promotion for a Rhapsody half-price sale.

I’ve said it before, and I’ll say it again, probably many times: Rob Glaser is a fatuous twit. Whether Apple should “unlock” the iPod is a question worth discussing—but it’s a business matter. There’s no Constitutional guarantee of freedom of choice in digital music players. Glaser’s phony baloney consumer-activist campaign (“Choice Rocks!”) insults those with genuine concerns about the issues of “the growing digital music arena”—interests that go beyond just selling music.

The Empire Strikes Back

Even as the Jobs-Glaser drama unfolds, another big name has entered the online music “arena” (and without Glaser’s assistance!). After numerous delays, Microsoft is in music biz. Some industry watchers think the company will be an instant player, but don’t expect the Earth to move anytime soon. Microsoft may have enough muscle and guaranteed exposure to quickly move into second place, but its late start, unproven technology, and image problems guarantee Microsoft won’t be king of the hill anytime soon.

Microsoft is just not cool, and cool counts for a lot. Apple names software upgrades after big cats; Microsoft calls them “service packs.” Apple has Steve Jobs; Microsoft has Steve Ballmer. Apple has the iPod. Microsoft has a sticker that promotes its compatibility with less-popular players. There’s nothing sexy about the name “Microsoft Music Store.”

Still, Microsoft’s Janus software and a new version of the Windows Media Player will add a new dimension to the competition: the rented music so dear to Glaser’s heart. New digital rights management software will make it possible to subscribe to music without buying it, a scenario which has yet to get a serious market test. Will music lovers buy in to renting? No one knows. If conflicts pop up between software and players, will consumers be understanding if they can’t get to their rented music?

And, of course, like everyone else in Apple’s thinning competition, Microsoft lacks the one thing that above all else has made the iTunes Music Store a success: the iPod. So far, selling music online appears to be at best a break-even proposition while Pods are selling at premium prices faster than Apple can make them. Microsoft may become number two in selling music online, but to Rob Glaser’s consternation, it isn’t likely to be at Apple’s expense.

A Last Word on iPods

You may have heard rumors of a forthcoming video iPod. As the owner of a handheld TV, I can attest to the limited appeal of watching a tiny screen, so allow me to immodestly offer a better idea: an iPod with digital satellite radio. Now, how cool would that be?