INDUSTRY ANALYSIS
Apple, RealNetworks Live in Never Never Land

"RealNetworks, Inc. is delighted by initial consumer and music industry support for Harmony."

Apple (Nasdaq: AAPL) FairPlay "consumer control" technology prevents people from playing iTunes tracks, which cost a dollar per track, on players Apple doesn't like, which is just about everything -- except iPods, of course.

Apple wouldn't deal with RealNetworks to allow music from the RealPlayer music store to be transferred to music players in general -- including iPods. So Real came up with Harmony Technology to allow people to buy Real tracks and play them on any player, whether Apple likes it or not.

Consider this statement: "The purpose...is to allow you to exercise your fair-use rights under copyright law. It allows you to free your iTunes Music Store (protected AAC / MP4) purchases from their DRM restrictions with no sound quality loss. These songs can then be played outside of the iTunes environment, even on operating systems not supported by iTunes."

Is the quote above from the Real statement? Nope. It's from Hymn, the latest incarnation of a free application that's been available in the real world for some time. Not at all incidentally, Apple tried to crush it, issuing cease and desist orders, and generally being unpleasant.

Major Storm

Apple would refer to the Hymn site as a hacker page offering a hacker application, because its software is designed to let people who have paid good money for iTunes tracks play them on any device they want. There was a major storm in April when PlayFair, Hymn's similarly home-made predecessor, turned up. It decoded iTunes protected-AAC files to unencrypted AAC files without quality loss.

"I buy all of my music," the author said at the time.

He explained: "In fact, most of the music I buy, I buy from the iTunes Music Store. However, I want to be able to play the music I buy wherever I want to play it without quality loss, since I PAID FOR that quality."

He added: "I want musicians to make money. I want Apple to make money. I don't condone sharing music through P2P networks with the masses, though I believe making a mix CD or playlist for a friend is okay. I also think the RIAA are a bunch of crooks, but that's another story."

Fair Use

Apple stomped PlayFair, it reappeared, Apple stomped it again, and then it turned up yet again, only this time as Hymn. Meanwhile, Jon Lech Johansen of Hollywood, QuickTime for Windows AAC memory dumper and DeDRMS fame recently released FairKeys for retrieving FairPlay keys from Apple's servers.

It's called fair use.

"Compatibility, choice and quality are critically important to consumers, and Harmony provides all of these to users of the iPod and over 70 other music devices, including those from Creative, Rio, iRiver and others," RealNetworks says. "Consumers, and not Apple, should be the ones choosing what music goes on their iPod."

RealNetworks claims its Harmony Technology follows "a well-established tradition of legal, independent development that bypasses proprietary formats to achieve compatibility," citing the first IBM-compatible PCs from Compaq as an "ample and clear precedent for this activity."

"Harmony creates a way to lock content from Real's Music Store in a way that is compatible with the iPod, Windows Media digital rights management [DRM] devices and Helix DRM devices," RealNetworks declares.

Irritating Piece of Software

It explains: "Harmony technology does not remove or disable any DRM system. Apple has suggested that new laws such as the Digital Millennium Copyright Act [DMCA] are relevant to this dispute. In fact, the DMCA is not designed to prevent the creation of new methods of locking content and explicitly allows the creation of interoperable software."

British technology observer Bill Thompson begs to differ:

"Real managed to turn the RealPlayer that we all loved when it launched in the mid-1990's into one of the least usable and most irritating pieces of software ever written, filled with features that nobody wanted, pushing popup ads for their paid-for service at regular intervals and generally annoying everyone."

And of Apple, he said: "It sold its integrity to the record business when it agreed to pay their inflated royalties for each song sold from the iTunes Music Store and to lock them up using FairPlay, a proprietary technology which they refuse to license to anyone else."

Real and Apple live in Never Never Land where the Big Four record labels are kings, with the owners of the various corporate music sites and "services" -- that is, Apple and Real -- carrying "product" and dancing to their tunes.

Wide Boy

It's like Farmer Jones growing the same type of cabbages loaded with growth hormones and genetically altered so they're an identical shade of green, and then offering them in a brutal hard-sell to the same grocers.

Because the cabbages have been artificially produced, they're bland, wormy and tasteless, but the grocers -- packed together in the same shopping mall -- are nonetheless trying to sell them at grossly inflated prices to a very small group of people who don't know any better, or who just don't care.

In the UK, Farmer Jones would be called a Wide Boy and you'd see him selling off the back of a truck, one eye open for the police.

And while they wait for the market to equalize and settle, millions of discerning shoppers who long ago figured out there's no point in trying to deal reasonably with Jones -- he's congenitally programmed to rip them off -- are helping themselves to a huge range of tasty, organically grown cabbages and other produce from an equally vast range of farmers.

In the meanwhile, Apple's very own software can create unprotected song files that can be played on any computer without recompression, circumventing iTunes' DRM protection.

"iMovie users can use the 'Share' feature of iMovie to export any imported [protected] song from the iTunes Music Store," Germany's Macnews.de says. "The exported songs can either be stored in the unprotected AAC file format (used by Apple at the iTMS) or in the raw WAV file format; both of these formats are supported by iTunes," it says.