Category Archives: Technology

iTunes is a Loss Leader for Apple

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The Register reports today that Steve Jobs admits that the iTunes is really a loss leader for Apple in a fascinating article. (Just in case you click through and notice the date, remember that it’s in European format — 07/11/2003 is 7 November, not July 11th.) So even though Apple made a big deal about on-line music purchases being the future of digital music, it turns out that all of the money goes to right back to the recording industry. Apple is at best breaking even, likely even losing money, all in the hopes of selling iPods.

The rest of the article is kind of a fun look at why Apple might be doing this (unclear at best) and a pitch for compulsory licenses (talked about earlier in my blog).

South Park and Music Sharing

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I don’t know how many of you caught it, but last night’s episode of South Park was a hoot. Stan, Kyle, Cartman and Kenny are attempting to form a band (“Moop”), when Cartman breaks off to form a Christian rock band because the market is easier. Cartman and Kyle bet $10 on who will have the first Platinum record.

Stan, Kyle and Kenny decide that the best way to establish a style is to listen to many other bands, but when Kyle’s request for $300 to purchase several CDs is denied, they discover that they can download music off the Internet for free. However, after downloading three songs, the FBI arrives and promptly arrests them. The kids say that they didn’t think they were hurting anyone, so an FBI agent brings them through a hilarious tour of musicians that are unable to purchase gold-encrusted shark tanks, must fly in Gulfstream-3 jets (instead of Gulfstream-4 jets), and can’t purchase islands for their children’s birthdays. The kids decide to go on a music strike because of this, and soon Metallica, Britney Spears, and others have joined them.

After a while they realize that they shouldn’t be striking because musicians are artists and they should be doing what they do for art’s sake, not just for money. Of course, Metallica, Britney and the others say that they are in it for the money. Kyle decides that if they produce good music, that people will pay for it, whether as CD purchases or concert tickets.

So, this is clearly the “it’s-time-to-change-the-business-model” argument for the music industry, where my head is currently at. I believe that this attempt to legalize music on the Internet (iTunes, etc) is a wrong headed attempt to force consumers to pay virtually the same amount for bits that they were paying for atoms. Until the prices significant drop (to about 25 cents per song), I think the music industry is going to continue to flounder. The business models must change, and Kazaa, Morpheus, Limewire, and other P2P apps continue to push this along. I think that the record contracts should start to change so that the industry gets more involved in the promotion of concert tours for these artists — that’s where their next dollars will be coming from. While it’s great to believe that someone can record something once and continue to get paid for it many times, the music industry has finally hit a wall where the goods are so desired that everyone is willing to break the law to get them. That’s when things just have to change.

Anyway, if you can catch the replay of this episode, it’s worth it. You’ll get a good laugh at the RIAA’s expense.

Catching Up (Again)

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It’s been a while since I’ve posted. I guess even with the number of things going on in the industry, I haven’t been inclined to write much lately. It could be just because I’ve been busy (thankfully). Maybe.

Anyway, here’s a few thoughts about recent events:

– RIAA lawsuits. This seemed to be big news for a while until a 12 year old girl was caught in the mix, prompting a number of companies and organizations to pay her $2000 fine. This can be nothing but bad publicity for the RIAA. Certainly this battle isn’t endearing them to anyone. The best move I’ve seen regarding this was the decrease in the retail price of CDs. The decrease isn’t enough, but it’s a step in the right direction. People won’t bother to download if CDs are priced correctly. Instead of wasting millions of dollars to protect your profits, generate a little consumer happiness with CDs that are priced around $4 each.

– Verisign’s SearchLight. Verisign, who runs the .COM and .NET gTLD servers, has decided that if you request a domain that doesn’t exist, they will return the IP address of their search engine. You can read ICANN’s comments here. From my perspective, this is problematic since Verisign can’t tell from the DNS request whether it’s a web browser, e-mail server, or custom application that’s making the request. This has the potential to wreak havoc on many applications that rely on DNS return the proper message for nonexistent domains. In addition, the management of a gTLD seems to be a public trust; Verisign seems to have violated that.

– Mac development. I noted earlier that I’ve been working on a 15″ PowerBook and thought I’d offer a little update. I’ve since installed Virtual PC and have booted both Windows XP and Linux on it. That means that the Mac is the only machine that runs all three operating systems that I care most about. It’s likely to become my main computer. Hopefully Microsoft will not remove the Linux option from Virtual PC now that they own the company that makes it. (By the way, I really want one of the new 40 GB iPods!)

Other than that, I haven’t been impressed much with the software industry of late. My colleagues tell me that there’s a chance that spending will begin to increase in the IT sector because many companies will begin to need software and hardware upgrades that were shelved for the past three years. This seems right with the increased movement toward service-based companies. IBM, HP, EDS, and others like them will benefit from this. However, the innovations of the dot-com era still seem far in the future. I’m still predicting a total of five to seven years before we truly get out of this funk.

Cheers — jeff

GET SOME VIRUS PROTECTION, PEOPLE!

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I’ve been getting nailed all day by this new variant of the W32/Sobig.F-mm virus (read about it here). This virus is worse than many others because it not only scans address books and contact lists for e-mail addresses but it also goes through your Internet cache. That means that any infected people out there who have visited my web site are now filling up my mailboxes with junk.

This is simple, folks. Get virus protection. It’s not expensive. Personally I prefer Symantec/Norton Anti-Virus, but I don’t care which one you use, just as long as you use it. There’s really no excuse for this.

Just in case this seems funny, remember that while it’s filling up my inbox, it’s clogging up your dial-up connection. At some point, this problem is going to reach a critical level where the Internet is all but useless. It’s time to start taking some responsibility for your access to the net.