3 Ways The Beatles May Change iPods and Apple | iLounge Article

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3 Ways The Beatles May Change iPods and Apple

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By Jeremy Horwitz

Editor-in-Chief, iLounge
Published: Monday, February 5, 2007
Articles Categories: Editorials

This morning, iPod and Mac maker Apple announced that it had reached a new agreement with The Beatles’ record label Apple Corps regarding use of the “Apple” trademark, substantially revising a fifteen-year-old legal settlement that in 2003 landed the companies in court, and seemingly precluded The Beatles’ catalog from appearing on Apple’s iTunes Store. While most of the terms of the new agreement were not disclosed in a short statement from the two companies, one major change was announced: Apple now owns “all of the trademarks related to ‘Apple’ and will license certain of those trademarks back to Apple Corps for their continued use.” What will this likely mean for Apple and the iPod going forward?

(1) Apple Could Sell CDs and Bundle Music with iPods: The old agreement (at Sections 1.3 and 4.3) seemingly prevented Apple from selling music on physical media, such as CDs, even though it could sell music through the iTunes Store. On paper, this seemed like a simple limitation: Apple could sell music-playing hardware like iPods, but it couldn’t sell you the discs full of music to play on the iPod.

Apple’s iTunes Store - the subject of the 2003 lawsuit - successfully stepped around this limitation by using the Internet to distribute music, but it left Apple with two major limitations: Apple couldn’t pre-install music on iPods, or otherwise sell it on any physical medium, such as discs. This was one of the reasons that the prior U2 Special Edition iPods didn’t actually include U2’s music - Apple’s contract with The Beatles forced you to buy it separately online.

Most likely, since Apple now controls the Apple trademarks with limited license rights going to The Beatles, the new agreement will allow Apple to sell physical copies of music - whether they’re sold separately from an iPod, bundled in compact disc form with an iPod, or pre-installed on the iPod’s hard disk. An obvious strategy for Apple would feature artist-customized iPods akin to current iTunes Store Gift Cards. But this could also lead to a huge change in Apple’s iPod business going forward: if someone’s at the airport and thinking of buying an iPod from a vending machine, all they’re getting is an empty hard disk. Now, they might be able to buy an iPod filled with music, and enough battery power to last for the flight back home. Apple could conceivably also sell pre-loaded iPods at concerts, movie theaters, and record stores, preloaded with live performances, soundtracks, the latest releases, or box sets of music.

(2) The Beatles and iTunes: Rumored for months, The Beatles’ appearance in the iTunes Store seems a natural at this point. Apple CEO Steve Jobs nonchalantly displayed a wide variety of Beatles music content on the screen of the upcoming iPhone, a deliberate and extended tease he probably wouldn’t have risked under the 1991 settlement agreement. As The Beatles have already announced that their music is in the process of remastering for digital distribution, it would be highly surprising if the band’s music wound up on a distant second- or third-tier music download service rather than iTunes.

Right now, there’s a very small section of the iTunes Store devoted to The Beatles, and it doesn’t contain any true releases by the band; similarly, there are many unauthorized tribute versions of Beatles music in the store if you use the Store’s search feature to hunt for Beatles. We’ll be interested to see whether the band will be willing to release its songs in low bitrate AAC form like all of the existing iTunes Store content, or if it will insist on the higher-quality Lossless format for its music, as a group of hard-core vinyl fans have been suggesting for years.

(3) The Beatles’ iPod Special Edition: Since Apple introduced the iPod U2 Special Edition back in 2004, and despite numerous guesses and prayers from fans, no other artist or band has received a similarly redesigned custom iPod. Clearly concerned about manufacturing hundreds of thousands or millions of iPods that might wind up sitting on store shelves, Apple has instead offered only modestly customized, Apple Store- and contest-exclusive models such as the engraved Harry Potter Collector’s Edition iPod and Red Hot Chili Peppers Limited Edition iPod. A band with the worldwide popularity of The Beatles is the most likely next step in Special Edition iPods, if Apple intends to continue the concept at all.

Because the new agreement’s terms are confidential, it’s currently impossible to know for certain what has changed between Apple and The Beatles, so consider the three points above to be “quite possible” rather than definite. Friendly press release language aside, there may still be some acrimony between the companies that isn’t apparent from their public statement. But as Apple fans - and as Beatles fans - we were thrilled to see the band’s releases on the iPhone’s screen last month, and are hoping to see them on the iTunes Store very soon.

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Comments

1

Superb analysis. Upon first hearing the news, I thought “Now the Beatles will be available on iTunes, maybe with a special edition Beatles iPod.” (Items #2 and #3 on your list, which are obvious no-brainers.)

But then your editorial reminded me how limiting this lawsuit has been to Apple over the years. The possibilities you briefly mention might not sound like big news, but that’s just the tip of a potential iceberg.

This isn’t exciting in the same way as a possible iPhone-style iPod. But it opens up a lot of possibilities for the long-term growth of the iPod/iTunes system.

Editorials like this one are a big reason why I am an iLounge reader. Quick news and press releases about the iPod can be found anywhere. But insightful commentary and trustworthy reviews are hard to find.

Posted by BJ Nemeth on February 5, 2007 at 9:28 PM (PDT)

2

What about the best idea that apple will add publish to iTunes button to garage band which allow you to publish you recorded songs directly to iTunes and to the world?!

Posted by LinkTree in IL on February 5, 2007 at 11:03 PM (PDT)

3

How about Item #4.

Apple becomes the first all-digital music label. Artists now can negotiate directly with Apple, cutting out all the greedy slubs in the RIAA who ream artists with tricks like “loaning” artists back their own money to line their pockets and stealing even the band names. Artists get to keep their music instead of signing it away to the labels.

Just imagine what that would do to music labels. More importantly, imagine the positive it would have on music, where the artist is freed from being a corporate slave of the labels, and free to focus on the music.

Posted by kiwali on February 6, 2007 at 6:56 PM (PDT)

4

Re: Apple couldn’t pre-install music on iPods, or otherwise sell it on any physical medium, such as discs. This was one of the reasons that the prior U2 Special Edition iPods didn’t actually include U2’s music.

This isn’t the only reason why Apple doesn’t ship music pre-loaded on an iPod.

Assuming Apple would want to protect the pre-loaded music with FairPlay DRM, FairPlay’s current implementation does not allow for the pre-loading scenario.

When you purchase a track at the iTunes store, it generates a new random user key, which is used for encrypting the track (or more correctly, encrypting the master key, which is then used to encrypt the track).  This key is then downloaded and stored in both the iTunes and iPod encrypted key stores.  When iTunes or iPod are required to play back a DRM-encrypted track, they retrieve the user key from their key store, decrypt the master key stored with the encrypted audio in the track, and then decrypt the audio with the master key.

Given this implementation, for Apple to pre-load DRM tracks on an iPod they would need to:

(1) generate a unique user key for each pre-loaded iPod sold, storing that key in the iPod’s key store, encrypting each of the tracks to be loaded on the iPod with that key, and finally loading the tracks onto the iPod,

(2) synchronising not just the pre-loaded tracks but also the user key(s) from the iPod back to iTunes when first paired, then synchronising the user key(s) from iTunes back to the iTunes store to be kept in Apple’s customer database linked to the customer account.  It is Apple’s database that determines what computers are authorised to play DRM tracks.

It’s not that it’s impossible to make the pre-loading scenario work with FairPlay, more that it’s pig ugly technically.  Apple would not be able to use mass disk duplication, as each iPod would need to be pre-loaded with tracks encrypted especially for that unit.  This overly complicates the production line for iPods, and would require many CPU cycles for all that encryption.  Sure Apple can solve the iPod to iTunes to iTunes Store synchronisation of pre-loaded tracks and keys with software, but it’s a lot of work for what gain?

Is pre-loading tracks on an iPod important enough to Apple to solve these problems?  What is so wrong with buying a U2 iPod with a download voucher?  It achieves the same end, and it already works with no costly changes to the iPod, iTunes and iTunes Store implementation.

However, if Apple can, in the future, sell non-DRM tracks, then all these
implementation headaches go away and Apple would easily be able to ship iPods pre-loaded with music.

Posted by sausage on February 7, 2007 at 1:04 AM (PDT)

5

another way to look at it, is that Apple is tranisitioning from the ipod to the iphone. and are now building up a market infrstructure condusive for it instead. read it off here

http://www.asia.cnet.com/reviews/techbuzz/audio_arsonist/0,39041384,61988220,00.htm

Posted by kurtufo on February 8, 2007 at 9:52 AM (PDT)

6

If I could get I-pods with about 10 or so albums on them it would be a great starter gift for older relatives who have never used an I-pod. I trhen could also give them the cassette for car and they would be set, they then could load the rest of the music themselves, why can’t i buy a I-pod with a few who albums, Beatles, Bruce, Etc. already loaded, Apple you are losing money

Posted by hamblda on November 24, 2007 at 1:15 PM (PDT)

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