DRM Watch has an interesting article which examines EMI's DRM-free music deal with Apple and now Microsoft. 

It's been interesting over the past few days to watch the reaction from different tech sectors to the EMI/Apple and then the EMI/Microsoft deal to make DRM-free music with less compression available to the public.  To call the response "mixed" I think describes it well.  Basically, the impression I'm getting is that no one, not even within EMI, Apple or Microsoft, really knows how this is going to play out.  Bill Rosenblatt, writing for DRM Watch, does a good job of analyzing the possible short-term impact of these deals.  So, is this a good move for EMI?  Rosenblatt doesn't think so:

As far as EMI is concerned, the deal was shortsighted, risky, and possibly irresponsible to the company's shareholders.  EMI is the smallest of the four majors, enjoys no synergies with corporate siblings, and is undergoing financial hard times.  This move with Apple was a lunge for near-term revenue, at the quite possible expense of longer term revenue for EMI and the rest of the industry.

The announcement also didn't help EMI's stock price:

Any longer-term revenue effects from the deal are unpredictable.  The financial markets concur with this assessment: EMI's stock has edged down slightly in the days since the Apple announcement. 

But the deal is very good for Apple:

The short-term effects of this announcement on Apple, as with EMI, are predictable; but unlike EMI, they look positive (Apple's stock was up about 1% on the news).  Apple is now well and truly in control of music download economics for Internet distribution.  This deal should also be a huge help to Apple in defusing consumer advocacy actions in many European countries.

What about the knock-on effect on iPod sales?

Apple has determined that it no longer needs DRM to sell iPods.  It stands to benefit most from any additional unauthorized copying resulting from the lack of DRM.  And any additional movement towards DRM-free music will hurt its would-be competitors among device and platform makers, notably Microsoft.  In other words, give credit where it is due: Apple has indeed played this scenario smartly. 

I think that it'll be interesting to keep an eye on iPod sales over the next 12 to 24 months and see what happens.  Initially, there's no way that the EMI deal can have a negative effect on iPod sales.  After all, the type of person likely to by DRM-free EMI tunes from iTunes is also likely to have a large DRMed library too, forcing them to remain within the iPod ecosystem.  But over time, especially if more and bigger player jump aboard the "DRM-free" wagon, there will be an increasing number of iTunes users who won't be locked into this ecosystem (assuming, of course, that they buy smart and stick to non-DRM stuff) and will be free to pick and choose their next media player from outside the iPod range. 

Has EMI given too much power to Apple?

What does EMI get in the longer term?  No one really knows.  The effect that the lack of DRM will have on content misuse or on revenue is unpredictable.  What we do know is that this deal flies in the face of the music industry's view that Apple has too much control over it.  That's where the irresponsibility part comes in.  If EMI wanted to go DRM-free, it would have been better off in the long run if it did so with an iTunes competitor. 

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Every time I mention how WEP (Wired Equivalent Privacy) protocol used to secure wireless networks needs to die, I always get at least one comment from someone who, for one reason or another, obviously still uses WEP and wants some false hope that it's better than nothing.  Well, it isn't.  Want proof?  Here it is.

A paper by Erik Tews, Ralf-Philipp Weinmann, and Andrei Pyshkin of the Darmstadt University of Technology demonstrates how to break 104 bit WEP in less than 60 seconds (PDF link).

We demonstrate an active attack on the WEP protocol that is able to recover a 104-bit WEP key using less than 40.000 frames with a success probability of 50%. In order to succeed in 95% of all cases, 85.000 packets are needed. The IV of these packets can be randomly chosen. This is an improvement in the number of required frames by more than an order of magnitude over the best known key-recovery attacks for WEP. On a IEEE 802.11g network, the number of frames required can be obtained by re-injection in less than a minute. The required computational effort is approximately 220 RC4 key setups, which on current desktop and laptop CPUs is neglegible.

In my book, sixty seconds worth of protection does not classify as "better than nothing".  Unless you are in a position where you aren't using your WEP-protected WiFI connection for anything remotely important, it's time to eliminate WEP altogether.  Upgrade software drivers and firmware.  If that's not possible, buy new hardware.  If that's not an option, stop using WiFi.  Period.

I know it's painful, but it's necessary.  I've even stopped connecting my old (but still functional) iPAQs to WiFi networks because they only support WEP (I never managed to get the WPA supplicant or HP patches to work to make them WPA compatible).  It's a tough call, but where security is concerned, you can't start cutting corners, taking chances and go around offering hackers and bandwidth hijackers an attack surface like that.

If you're not already a regular reader of Dwight Silverman's TechBlog (if you don't, I highly recommend you add it to your RSS reader), you really should check out his latest post.   Gadget lust has hit him hard and he really "needs" an 8-core Mac Pro desktop.  His plan for getting one - get his wife to buy him one!

He begins:

Dearest Lovely Wife:

Good start!

Apple today announced that it is now offering an 8-core version of its Mac Pro desktop. You're not a techie, Lovely Wife, so let me explain — 8-core means it has eight processors in it. In this case, it's two Intel Xeon Quad-Core processors. 2 x 4 = 8, but since you do the finances in our happy home, I don't need to tell you that (I hope).

Flattery will get you everywhere!  It doesn't take long for Dwight to get down to the finances:

Total price, according to Apple's configurator: A mere $5,541!

He did soften the blow though by not adding the screen!

That doesn't include a monitor, such as the $899 23-inch Cinema HD Display . I figured I'd cut you a break. We can negotiate on this point later.

My recommendations Dwight - get two of those babies!

I think his payment plan needs work though:

Really, this would not require much financial sacrifice. Perhaps if we don't buy clothing for a few years, or not pay the electric bill for a couple of Houston summers, or maybe sell our first-born into slavery . . . we could easily afford it.

Ohhh, you should have added on the end there "after all, it does have 8 cores!"  You could have also mentioned that 8 cores means that you'll get 8 times as much work done in an eighth of the time! 

And if all that isn't enough, there's the classy close:

Anyway, I'll leave it up to you, of course. I know you'll do the right thing.

And if not, well, I'm sure my third wife will.

Thanks for sharing your moves with us Dwight!  Alternatively, you could have bought the rig and when your wife spotted it casually say "what, this old thing, had it for ages …"  That also works a treat!

Let us know how you get on! ;-)

According to the Seattle Post-Intelligencer Microsoft is being sued over deceptive marketing practices that allowed PC makers promote computers as "Windows Vista Capable" even if they couldn't run the new operating system's "signature" features.

The proposed class action has been filed on behalf of Dianne Kelley of Camano Island.  The issue surrounds PCs carrying the "Windows Vista Capable" stickers.  These PCs were designed to meet the very basic requirements for Windows Vista Home Basic and would not be capable of making use of Vista more advanced features such as Aero, Flip 3D and media center support.  In order to be able to fully leverage these features customers will need to have bought a "Premium Ready" PC in order to run Vista Home Premium or higher.

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Microsoft claims that the suit ignores the lengths that the company took to make clear the differences between the different versions of Windows Vista.

I've written about this issue several times before (the last time I touched on this was in the post entitled "Is Vista Home Basic a way for vendors to sell low-spec PCs?") and my take is that having a situation where you have so many different operating systems all falling under the "Vista" banner, and then having two sets of system requirements and two logo programs for PCs is just too complicated for the average user to navigate.  Not only that, but the scope for confusion and misrepresentation at the store level is also high.  Microsoft then went on to market Vista based on features such as Aero which aren't guaranteed all round.  Take this passage directly off the Microsoft Vista website:

In the Home Premium, Business, and Ultimate editions of Windows Vista, you'll see everything you're working on more clearly through the stunning new Windows Aero interface, which includes Windows Flip 3D to help you quickly switch between windows and tasks.

Makes it sound like a done deal to me no matter what your hardware.  The small print might make it clear that "some product features are only available in certain editions of Windows Vista and may require advanced or additional hardware" (the wording that you come across on the Microsoft site quite often), but the main text and images gloss over the differences.  OK, a few minutes researching Vista will tell most people what they need to know about the different versions, but if all consumers researched before they purchased PCs, we probably wouldn't have the "Vista Capable" logo in the first place.

Personally, I don't feel that this deserves a lawsuit (I'm no real fan of them because the only winners are lawyers, and in this case I'm almost certain it's going to get thrown out anyway), but I do think that Microsoft needs to make it clear to customers what they need in order to see the WOW.  Windows Vista is not just about Aero and Flip 3D but Microsoft does promise a lot of WOW!  After all, if you bought a new PC, bought it home and didn't see the WOW, wouldn't you feel just a little bit cheated?

By the way, do you feel that the wording on the "Vista Capable" stickers is a bit, well, misleading?  What does "Windows Vista Capable" mean to you?

A number of new details relating to Microsoft's Xbox 360 Elite have been clarified on the AVS Forum by Amir Majidimehr, corporate vice president, Mobile and Embedded Devices Division at Microsoft. There are a number of issues that potential buyers need to be aware of before buying.

The Xbox 360 Elite is Microsoft's response to Sony's PS3, but it seems that Microsoft may have cut a few corners.  Specifically:

• Xbox 360 Elite supports HDMI 1.2 profile, not HDMI 1.3 like Sony's PS3.
• PCM output is available but only for 2-channels (not 5.1). This means that if you want high-quality audio output from HD-DVD, you need to rethink.
• When the 360 Elite is connected to an HDTV set using an HDMI input, the console will automatically select the appropriate video output resolution up to 1080p. Users cannot manually force resolutions.

There also seem to be a number of issues relating to audio and video being out of sync when playing HD-DVDs.  Patches are in the pipeline for this, but won't be released until the spring update.

Am I the only one that feels like both the PS3 and the Xbox 360 Elite have that unfinished, "beta" feel to them?

Today the European Union (EU) announced that an investigation of Apple is underway for antitrust violations related to the pricing of music sold through the iTunes store.

What's happened so far is that the European Commission (EC) has issued Apple with a statement of objections to Apple.  This statement lays out how Apple, along with four major recording companies, are violating EU antitrust laws.

The antitrust allegations center around how Apple charges a different price in the iTunes store for the same content across different countries.  This action, according to the EU, unfairly penalizes consumers in countries where the content is more expensive.  For example, in the US a track on iTunes costs $0.99, but throughout the Eurozone, a track sets you back €0.99, while in the UK a track costs £0.79.  However, $0.99 converts out to roughly €0.74 and £0.50 respectively.

Here are a couple of extracts from a memo issued by the EC:

The European Commission can confirm that it has sent a Statement of Objections to major record companies and Apple in relation to agreements between each record company and Apple that restrict music sales.

Consumers can only buy music from the iTunes on-line store in their country of residence. Consumers are thus restricted in their choice of where to buy music, and consequently what music is available, and at what price.

The EU and the EC are perfectly capable of making mountains out of molehills, but I don't see this issue giving Apple much of a headache.  After all, it's not Apple that set pricing, but the record companies. 

Now if the EC really wanted something to get its teeth into, it should take a look at the tightly locked iPod/iTunes ecosystem that Apple fosters.  That would make for a far more interesting case and I think that Apple knows this - which is why they want to appear to embrace the new "in support of a DRM-free world" image.

When the world changes, even a little bit, it takes a little time to get used to it.  Yesterday's announcement by EMI that it was to offer DRM-free music through iTunes was one of those changes that took a little time to get used to.  But who's going to benefit from this new era of DRM-free music?  My guess is that Apple and EMI will benefit far more from this than the consumer will.

The main catch in this deal is that DRM-free music will cost more than the DRMed stuff.  Between 25 and 30 per cent more (25% if you live in the UK, 30% if you live in the US).  Why?  I'm not really sure.  I think that "DRM-free music" is somehow being touted as a value-added benefit, and since the bitrate is higher, it's pretty easy to justify jacking up the price. 

Note: This means that $25 buys you 19 DRM-free tunes (leaving you with 49 cents change), while the same cash will buy you 25 DRMed tunes (and leave you with 25 cents).

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Personally though, I feel that this increase in price is:

• A "piracy tax" where consumers buying the DRM-free content are being charged extra because a few of these people will abuse the system and make the tracks they buy available for illegal download by others.
• A sneaky way to raise the cost of tunes.
• Or, a bit of both.

The clever part to this deal is that Apple and EMI can't lose.  For them, success or failure is a win-win situation.  Why?  Here are just a few of the reasons:

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So, EMI has chosen to free its entire catalog of DRM.  Is this the beginning of the end for DRM?  I think it is.

Here's a link to the press release that says it all.  Here are some of the highlights:

• EMI makes its digital catalog available at a much higher sound quality than existing downloads and free of DRM.
• The new higher quality DRM-free music will complement EMI's existing range of standard DRM-protected downloads already available.
• Quote from Eric Nicoli, CEO of EMI Group: "Our goal is to give consumers the best possible digital music experience. By providing DRM-free downloads, we aim to address the lack of interoperability which is frustrating for many music fans. We believe that offering consumers the opportunity to buy higher quality tracks and listen to them on the device or platform of their choice will boost sales of digital music."
• Apple's iTunes Store is the first online music store to make available EMI's new premium downloads.
• Apple has announced that iTunes will make individual AAC format tracks available from EMI artists at twice the sound quality of existing downloads, with their DRM removed, at a price of $1.29/€1.29/£0.99. iTunes will continue to offer consumers the ability to pay $0.99/€0.99/£0.79 for standard sound quality tracks with DRM still applied.
• EMI expects that consumers will be able to purchase higher quality DRM-free downloads from a variety of digital music stores within the coming weeks.
• Consumers who have already purchased standard tracks or albums with DRM will be able to upgrade their digital music for $0.30/€0.30/£0.20 per track. 
• All EMI music videos will also be available on the iTunes Store DRM-free with no change in price.

This has to be the beginning of the end for DRMed content.  Other labels will no doubt have to follow suit and make similar offerings to remain competitive.

I'll have more comment on the potential implications of this later.

Thoughts?

The rumor mill is in high gear over an announcement planned for later today by Apple and EMI.  It seems that EMI plans to sell "significant amounts" of its catalog free of DRM.  Some are also hoping that The Beatles catalog will finally be made available through iTunes.

Sorry, but where there is a DRM vs. The Beatles story, the DRM issue is far more significant in my opinion.  Today could be the day that heralds in a new era in consumer freedom from DRM.  If this ends up being a Beatles announcement, I'll be severely disappointed.

The removal of DRM on some of EMI's catalog is a good thing, but most would rather see a complete removal of DRM on EMI's entire iTunes offering.  Now that would be cool, but I don't see that happening.  My guess is that we'll only get a partial removal, and that these aren't going to be the big sellers.  It's going to be the less popular stuff.  The stuff that's come to the end of the line from a profit point of view (maybe it's no longer worth supporting DRM-related support issues for these tunes).  If EMI take the bold step of freeing up the stuff that's in big demand, I'll be very impressed.

Here's a question though.  If EMI does unlock some of it's catalog, will users who bought a DRM-ladened song that now gets unlocked be entitled to a DRM-free download?  Also, how will iTunes make it clear which tunes are DRMed and which aren't? 

Is Apple "unmodding" modded Apple TV boxes?  I've come across a few stories/rumors suggesting that it might be. 

Several of us over in the Awkward TV IRC(l0rdr0ck, myself, and others) have had our Mod’d Apple TV’s played with over night(SSH/VNC disabled), our guess is apple has started to fight back the mod’d Apple TV’s. This is a warning to all of you to block your Apple TV from the internet by going into your routers settings and denying it internet access!

I can't confirm or deny this at present.  It seems likely to me It's that old chestnut of who actually owns the hardware we buy - us of the company that subsidizes the hardware in order to sell additional services (because that's where the long term money is) and then feels that it own the hardware.  Companies look at consumers who use the hardware in their own way (as opposed to the way it wants you to use it) as, well, not much better than thieves.

This kind of thing is just going to get worse.  As companies move away from selling hardware and software and move to selling products, the long-term service becomes the main income stream, not the initial hardware sale.