Jupiter Analyst: Interoperable DRM Won't Solve Music Industry Dilemma

Scott Fulton, BetaNews: You said that if there were such a thing as an iPod killer, a true competition not just for the gadget but for the whole iTunes platform, then perhaps there might be more public attention toward the idea, "We've got to make things play right and play together." As of now, it's not an issue. Would it be to the industry's benefit, then, to subsidize an iPod killer?

Mark Mulligan, JupiterResearch: First of all, the music industry is in such a dire economic situation at the moment, it really doesn't have the resources available to be able to do that. And also at the moment, sales of the iPod are an incredibly important part of the digital music market, and Apple is the dominant force in all European markets, as it is in the US. If someone were to go out there to try to weaken the iPod, it's a gamble because it might be that all that happens is, it just weakens the overall MP3 player market. Apple loses some of its luster, yet the competition that's fighting hard against it isn't actually as great as people had hoped it would be; [in] a fragmented market, some of the impetus goes away, which the music industry can't afford to have at the moment.

It's going to be a heck of a thing to be an iPod killer. No one has managed it yet. Zune certainly isn't it. So it's not even as though there's a likely candidate that the music industry could back. Even if it did, it would then face potential sanctions from regulatory bodies.

Scott Fulton: Your earlier statement about trust, that the consumers appreciated in the past the position of trust [on the part of record manufacturers]...In the video industry, I've noted that when it comes to AACS protection for Blu-ray and HD DVD, a lot of consumers are vehemently opposed to the notion of investing even a dollar in high definition technology, after having read that with AACS, there is this concept called the revocation key...It's the feeling that people have that they're being distrusted that probably prohibits them from wanting to invest in that. So I'm thinking, even if there is this interoperable DRM solution, doesn't that feeling of distrust continue, if there's one standard or many?

Mark Mulligan: Absolutely. That's what's both dangerous and difficult about online music, the fact that if there's any type of digital rights management - whether it's interoperable or whether it's got liberal or very conservative usage terms built into it - it's something that's completely different from how people have experienced music up until the modern day. That is, music was there, you [decided] how you wanted to use it. Yes, regardless of whether there's an interoperable standard or whatever else, all that will mean is that it makes the pill slightly less bitter to swallow.