On Tuesday the French parliament will vote on an amendment to a highly controversial piece of legislation concerning digital content. So far an amendment suggesting a blanket license for content distributed on file sharing networks has been rejected. However the current amendment is just as controversial: it would give consumers the legal right to circumnavigate DRM. The legislation also allows for private copying of CDs, but not DVDs.
The strategy behind the draft legislation is opening up of DRM to foster greater competitiveness in the digital music market and also to ensure that DRM becomes an interoperable billing and distribution platform rather than a proprietary tool for a few large businesses to lock consumers into their products and services. Which in practical terms means: opening up Apple’s iPod and iTunes.
It has been argued that the key beneficiaries of Apple (an American company)’s loss will be French companies: Universal Music’ Ecompil (owned by French giant Vivendi Universal), Virgin Mega (the French owned subsidiary) and Fnac. However, though French legislators may believe that they are fulfilling their duty of serving the interests of their people, in actual fact all they will be doing is opening up the French market for the real American giant: Microsoft.
Apple may currently hold the aces in pack with iTunes and iPod, but Microsoft still holds most of the rest of the cards. Windows Media Player is still the most widely installed media player (by a big big margin) and the vast majority of Europe’s 200 digital music stores retail in WMA.
Apple are a big fish in a small pond. Digital Music was only worth € 192 million in 2005, and just €20 million in France (see our Digital Music report for more details). Apple are in digital music principally to sell devices. The AAC / Fairplay combination is a retention play to ensure that Apple users remain Apple customers. Though Apple also have their own platform strategy, in the PC market they are minnows compared Microsoft compatible shipments. Microsoft are in DRM and media to help their platform strategy. If interoperability is forced through then the odds are that the market will lean on the widest common denominator: WMA. (It won’t go for MP3 because the music industry simply won’t give up on DRM). The other alternative is a highly fragmented market with numerous vendors trying to develop technologies that work within an industry standards framework. A model which has had underwhelming success in the mobile space so far with OMA 2.0
If the law does go through then it still has to be passed by the upper house and then run the gauntlet of the judiciary (remember it was less than a year ago that the French courts ruled against interoperability in the Virgin Mega case).
There are also various inconsistencies in the bill and the strategy behind it, not least of which are:
– Why were DVDs exempt from this legislation?
– Why is it ok for console games manufacturers (Sony, Microsoft, Nintendo) to build their business models around non-interoperability?
A senior French Parliamentarian argued
“We cannot accept that numerical data is available in one language that cannot be translated into another.”
Surely the same principles should apply to all forms of digital media, not just Internet downloads?