Peter Griffin: iPod not the apple of everyone's eye in the trade

The iPod may have become the device of choice for those who like their music digital and portable. But the music industry has a big beef with the iPod's creator, Apple.

Two music industry executives who breezed through New Zealand in the past couple of months expressed exasperation at Apple's refusal to make the iPod compatible with Microsoft's digital rights management technology.

A large range of music publishers, hardware makers and online music sellers have got behind Microsoft's anti-piracy technology, but Apple stands alone in ignoring it. The result is that the iPod is now incompatible with most of the music download services and media player software now available.

That wouldn't matter, were it not for the fact that the iPod and Apple's own music service (itunes.com) account for about 70 per cent of music player sales and downloads.

For Kiwi iPod owners, it means they can't transfer to their devices music files downloaded at the new Coketunes services (www.cokefridge.co.nz).

So the device you bought because everyone was raving about how good it was isn't even compatible with the first comprehensive music download site to set up shop here. If I was an iPod owner I'd be a little miffed about that.

Ted Cohen, the good-humoured senior vice-president of digital development and distribution at EMI Music, sums up the position well.

"Apple is not interested in being part of an ecosystem. Their idea of interoperability is: buy an iPod," says Cohen, who called in on Coketunes, Vodafone and music retailers on a fleeting visit earlier in the week.

Apple has its own digital rights management software called Fairplay, which is incompatible with the Windows media format. Apple doesn't look inclined to license Fairplay to the record labels any time soon.

That's a sore point with Thomas Hesse, Cohen's opposite at Sony BMG.

Sony BMG wants to put anti-piracy software on every CD release by the end of the year. The measures mean you can make three copies of the music, storing the songs on your computer if you're using Windows Media Player 10, which has digital rights management software recognised by the discs.

That seems reasonable enough.

The problem is that iPod owners use the Apple-created iTunes media player to load up their music device, not Windows Media Player. The iPod doesn't recognise the Microsoft-flavoured .wma files that the songs are converted to when ripped from the CDs.

There are ways around it. Sony BMG recommends those who buy its copy-controlled discs to burn a copy to CD, rip them, then transfer them into iTunes.

The CDs are being released to the iTunes.com online store where iPod users can get their hands on them. But many music listeners still want a physical copy of the disc, complete with artwork.

These get-arounds put another step in the process of getting music onto your iPod, a process that should be easy. Users who have paid good money for music and the player shouldn't be subjected to them.

It's these sorts of headaches that keep people like Cohen trekking around the world (he's been through New Zealand three times, but this is the first time he left Auckland's international terminal).

Apple rival Real Networks last year developed a piece of software called Harmony, which allows music tracks purchased from its Rhapsody download service to play on iPods. That infuriated Apple, which said Real had the "ethics of a hacker".

The message is clear: while it's the biggest game in town, Apple isn't going to do anything to make it easier for iPod owners to check out the competition.

Here's the irony: Microsoft's Windows operating system runs on 90 per cent of the world's computers, giving Microsoft a monopoly on the desktop software market. Apple has a small share of the computer market.

But iPod and iTunes give it a near-monopoly in digital music and no incentive to license its digital rights management to anyone else. It's playing Microsoft's game this time.

But it seems that Apple might be backing itself into a corner in its desire to protect its software and online music businesses.

After all, it's not the only company making music players, and the competition - for a long time left in the dust by Apple - is now coming up with some worthy competitors.

Cohen points to iRiver, which sells with hard drives ranging in size from 5 gigabytes to 60GB and has an FM tuner and voice recorder built-in. The new iRiver looks great too. Then there's the Toshiba Gigabeat, which has the same form factor as the iPod. The Creative Zen is also gaining ground with an improved design. All of them are Windows media friendly.

The incompatibility of the iPod with the formats new music is being released in will also play havoc with a new strategy the record labels are getting into - music kiosks.

These are in-store computers that users will be able to download music from.

"You dock your portable player, load on the tracks you want, take them home and integrate them into your home library," Cohen explains.

If you're an iPod owner, however, that appears to be out of the question for now, unless you go to an Apple terminal and use itunes.

Apple's ingenuity never ceases to amaze me. A Motorola-made iTunes mobile phone is rumoured to be in the making and could be the next big thing for them.

But Apple's divergence with the music industry will only going to cause it bigger headaches and annoy the legions of music lovers who are also iPod owners.

As a user of Windows Media Player and an avid CD buyer, I won't be investing in the little white device until Apple sees sense.