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French law would have ‘minimal’ impact on Apple

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By LC Angell

Contributing Editor
Published: Tuesday, March 21, 2006
News Categories: iPod

The French National Assembly’s vote to open copy-protection technologies on music stores and digital audio devices will have “minimal” impact on Apple, according to Piper Jaffray senior analyst Gene Munster. While the analyst believes that the law will be made official by the French Senate, Munster said in a research note that Apple will likely halt music sales in the country. “In our opinion, Apple would prefer to remove itself from the French market than start what could be a slippery slope of other countries passing similar legislation,” he said.

“We believe Apple is more likely to drop out of the French market than open up its FairPlay DRM to allow iTunes to play on competing MP3 players,” Munster said in the research note provided to iLounge. “While this sounds like a drastic move, we believe it would not materially impact business. We estimate that approximately 20% of iPod and iTunes sales occur outside of the U.S. The French market alone is likely less than 2% of iPod and iTunes business.”

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Comments

1

From Apple’s perspective, I have to think this is a no-brainer. Their business model relies heavily on their exclusive DRM technology, not to mention the record companies that agreed to sell their music on iTMS because of that exclusivity. France isn’t a large enough market for them to give that up.

Posted by Jason Martin on March 21, 2006 at 1:56 PM (PDT)

2

But, France is right in this case. You should be able to play iTunes, Napster, Rhapsody, yahoo downloads on any or all devices. In other words, DRM is evil. Cut and dried.

Posted by Mark on March 21, 2006 at 2:00 PM (PDT)

3

Yep you are both right

Posted by Jonathan Keim on March 21, 2006 at 2:13 PM (PDT)

4

It’ll be interesting if interoperability is enforced as to who will be responsible for what.

ie If a napster WMA files refuses to play on my iPod, or I have trouble syncing an iTMS AAC file to someone elses Creative player, who do I turn to ? Apple, Napster, Microsoft or Creative. I can see each company maintaining that their own bit works fine, must be someone else who’s responsible…

WIll Apple be forced to implement WMA DRMless encoding in the iPod firmware ? Will any non-Apple players be allowed to sync with iTunes ? Will Microsoft allow a fully functioning WMP to work on the Mac to allow usage of Napster etc ?

If France does choose to legally mandate interoperability, the issue suddenly gets much more involved and complex.

If this ever spreads to the UK, everyone else can enjoy it. Me ? I like the fact I can just buy a tune, plug my iPod into my iMac and it *just work*.

Posted by Brenster on March 21, 2006 at 2:20 PM (PDT)

5

This is why I still buy my music on vinyl.  No DRM, no problem wink

Posted by BrettB on March 21, 2006 at 3:07 PM (PDT)

6

This probably won’t impact Apple so much. The iPod is still the best player in the world due to iTunes and it’s connection to the player itself. In fact, though it may dig a bit into the cash bag that is iPod/iTunes, I still believe people will buy the iPod. It looks better, plays better, and there’s a ga-zillion accessories for it. I don’t believe anyone buys an iPod for the sole reason to use a Music Store.. do you?

Posted by Boris34 on March 21, 2006 at 3:14 PM (PDT)

7

First France, then the UK, Japan…soon Apple will be locked out of every market except the US, and why?

The RIAA/MPAA cabal of evil will continue to protect megacorps while screwing the consumer, and Apple will happily help them do it.

Posted by stark23x on March 21, 2006 at 3:20 PM (PDT)

8

“I don’t believe anyone buys an iPod for the sole reason to use a Music Store.. do you?”

Millions do.  Without iTunes, the iPod is just another mp3 player.  Not just the store…the library management and integration with the player are key.

If Apple never developed iTunes, I would not own three iPods.  I’d own a player with more features and more storage.

Posted by stark23x on March 21, 2006 at 3:22 PM (PDT)

9

i don’t think the record companies will be too pleased if apple pulls the plug on a nation of 60 million people.

Posted by sighte on March 21, 2006 at 3:23 PM (PDT)

10

Leave it to the French to get create anti -foreign business law..This law really benefit the French online business because they know window, Apple, Sony would not benefit from that law ...but they will…because most likely all of those companies have to pull out of the France to protect their content from piracy in the US…. Leaving the market to only French companies standing..lol..wow ..VIVe La France!!!!

Posted by ko on March 21, 2006 at 3:29 PM (PDT)

11

“i don’t think the record companies will be too pleased if apple pulls the plug on a nation of 60 million people.”

Whichever was this ultimately plays out I’m sure the record companies will be able to spin this as a positive.

Apple forced to open up fairplay = Victory for the consumer, Apple becoming too powerful, must bring in variable pricing etc etc.

Apple withdraws from market = Apple becoming too powerful, need taking down a peg or two, must bring in variable pricing etc etc.

Status quo prevails = Existing revnue stream for labels maintained.

Posted by Brenster on March 21, 2006 at 3:58 PM (PDT)

12

opening up the iTunes DRM has been called for by every major US-based business publication including Fortune, Forbes and especially Business Week. Closed shop systems controlling consumer-based, cultural content have never worked, and are less inclined to work in a multi-national, wired world with different standards in different countries.

iTunes already has a DRM bypass in the ability to turn purchased music into an MP3.

There is no way Apple can “pull out” of France.

First, at least 5 other countries are contemplating similar laws, with Spain coming up next, and the Scandinavian nations also looking closely.

Second, while the new law much more strictly enforces copyright, there is little doubt there will be little French enforcement (and correspondingly EU enforcement) of copyright under the d/l and u/l legal provisions if there is no stakeholder to push the case for a legal digital download altrenative. In other words: if Apple and other legal d/l providers “pull out” leaving no legal means to d/l cultural content (and iTunes is moving beyond music) then there can be little precedent to punish illegal d/ls. No court (Canada set the example last Fall) will force a user offline and into a record store to buy a CD.

It was only a matter of time before access to cultural content was subjected to some government regulation as ther eis no industry and consumer consensus.

Posted by Aristophanes on March 21, 2006 at 5:32 PM (PDT)

13

Apple is going to pull out because as the article says, France isn’t making them that much money. Only 2%. Apple can use France as an example. “Screw with us and we leave”.

As much as I’d like a DRM free world I don’t agree with France. A company should not be forced to sell it’s product to people they don’t want to (users of other mp3 players). They also should make a product have to use a format that it doesn’t want to. Now Apple players and computers would be forced to use WMA. WMA is windows format. That may cause Apple to have to pay fees to use that format.

I just don’t think it’s right want they are doing. They are messing with the formula that has made Apple the success it is today. France is also messing with the RIAA. We all now what kinda jerks they can be. Apple has 3 million song most other stores (rhapsody, napster, yahoo…etc) have only 1 million. Now if the RIAA wanted thier music played on just any player then we’d see WMA stores with 3 million songs as well. It’s obvious that the RIAA doesn’t want thier music on all these players at this time.

Posted by Glorybox3737 on March 21, 2006 at 6:11 PM (PDT)

14

I personally strongly believe the best solution would be no DRM in any of these “stores” products.  DRM only hurts consumers, and does absolutely nothing to slow piracy.

Iggy smile

Posted by TheIguana in Calgary, Alberta, Prarires, Canada, North America, on March 21, 2006 at 6:47 PM (PDT)

15

Apple should pull out of France.  That will send a message to iPod users in other countries, being:  Stand up and be heard.  Don’t let your government run wild like they did in France!  If the US Government tries that crap here, I’ll be writing more than a few letters.  I just hope everyone else does as well.

Posted by Stephen on March 21, 2006 at 10:32 PM (PDT)

16

The problem with the reporting about this issue is that no one seems to get one thing: the bill has not yet been passed. This was only the first step - initial approval by the lower house - before it goes on to the higher house, then has to be passed by both houses. So don’t get all excited yet.

FWIW, this would open up a can of worms: why can’t I use a Playstation game on an X-Box? What about razor blades - I want to use my razor blades on your razor. The list is very long.

For this reason, I’m highly skeptical about it’s passing. (Note: I live in France, and am following this a bit more closely than those merely reading wire service reports).

Posted by Kirk McElhearn on March 22, 2006 at 12:35 AM (PDT)

17

“In our opinion, Apple would prefer to remove itself from the French market than start what could be a slippery slope of other countries passing similar legislation,?

If they do so, they will loose more than the french market…and this law will be european soon anyway.

Posted by steph on March 22, 2006 at 12:47 AM (PDT)

18

“Apple should pull out of France.  That will send a message to iPod users in other countries, being:  Stand up and be heard.  Don’t let your government run wild like they did in France!  If the US Government tries that crap here, I’ll be writing more than a few letters.  I just hope everyone else does as well.”
I have no idea what you mean, what are iPod users standing up for? What do we have to lose if iPods are able to play DRM music from stores other than iTunes? I hope the UK and Europe follow suit (which they most likely will). I don’t like being told where I can buy mp3s, just like I don’t expect to be told where I can buy gas/petrol when I buy a car, or what channels I can and can’t watch when I buy a TV. I don’t even see why this would hurt Apple so much, if iTunes is so good, then surely it will beat out the other stores in a competitive market, and should even increase revenue from selling songs to owners of other mp3 players. I can’t really see it harming iPod sales in the long run, unless Apple pull out of France and eventually the whole of the EU. Just because corporations control the US, doesn’t mean you should support them doing so all over the world. Good job France.

Posted by Oliver on March 22, 2006 at 10:36 AM (PDT)

19

” A company should not be forced to sell it’s product to people they don’t want to (users of other mp3 players).”

But people ARE forced BY THE LAW to respect companies’ marketing strategies. DRM are just business decisions, and it’s illegal to go against those business decisions.

(like if a peanut butter company would force you to use a certain brand of spoon, and it would be illegal to hack the jar to use another brand)

I think it’s the (strange) deal here : we give the force of the law to your DRM, but you have to allow interoperability.

Posted by Faz on March 22, 2006 at 5:26 PM (PDT)

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