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Thursday, January 05, 2006

DRM, Incompatibility, and Market Power: A Visit to the Sausage Factory 

DRM, Incompatibility, and Market Power: A Visit to the Sausage Factory: "Yesterday Alex wrote about how SonyBMG’s XCP CD copy protection software includes a feature – apparently built on illegally copied open-source code — to translate music files into the FairPlay format used by Apple’s iTunes and iPod, but the feature was not exposed to users. The details are interesting. But equally interesting, I think, is the question of how this situation came about. Why would Apple make compatibility so difficult? Why would First4Internet go to the trouble to make its software compatible? Why would First4Internet and/or SonyBMG then turn off this already-working feature? And why would SonyBMG then blame Apple for the difficulty of moving XCP files into iTunes and iPods? Today I’ll try to answer these questions. My answers will be speculative, as I’m not privy to any special information about the companies’ plans. But the story I’ll tell should be plausible, at least, and it will shed some light on how companies use DRM (copy protection) as a weapon in struggling for market supremacy. Let’s start by reviewing why Apple makes it hard for others to encode files in the Apple FairPlay format that is used by iTunes and the iPod. Apple could easily facilitate such encoding if it wanted to; but it doesn’t. Instead, Apple seems to be trying to "

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