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Navio may unlock iPod

updated 05:50 pm EDT, Mon May 22, 2006

Navio may unlock iPod

A new startup company based in Apple's home town of Cupertino, California has developed a new system that could open the iPod/iTunes ecosystem which currently dominates the digital music industry. Apple's competition has repeatedly tried and failed to take a significant share of the market, but the seamless iTunes experience coupled with an easy-to-use and intuitive iPod digital media player has kept competitors at bay. Further, Apple's has thus far refused to license its FairPlay DRM (Digital Rights Management) to other companies, which would allow them to release tracks that will play on iPods. Navio Systems is hoping to finally open the iPod to other formats with a system that stores the rights associated with a musical piece, game, or movie in the file itself, according to Business Magazine.

Navio-driven websites will offer songs and videos to consumers, which when purchased will store information about the sale in a "digital locker" that tracks user rights. The primary difference from iTunes is that Navio places no restrictions or requirements on where consumers get the content.

Early adopters currently experimenting with the Navio system include Fox, Sony BMG, Walt Disney Internet, Cingular, and Verizon Wireless. Disney, in particular, will be using Navio to drive content sales on its website promoting the Pixar/Disney animated flick "Cars," according to the report.

Navio plans to provide software that will enable its customers to offer copy-protected video content that will play on Apple's iPods by the end of June. The move will create opportunities for movie studios and music labels to reach potential customers via a large number of outlets, effectively allowing them to bypass Apple's closed iPod/iTunes ecosystem which has maintained a tight hold on digital pricing despite numerous complaints from record labels.

"Navio is an important alternative to the systems that are out there now," Mike McGuire said, vice president for research at Gartner. "The key for its success is to develop the technology and experience so that it is as good or better than what is out there right now. If not, it's back to the services that already exist."

While some users claim they have already managed to reverse-engineer the iPod's copy-protection system, licensing issues continue to form the real difficulty for those who would see Apple's iPod playing songs not purchased from the company's own iTunes Music Store.

"A lot of it is already technically possible," McGuire said. "The limitations are almost all related to mundane issues like licensing and rights agreements."




by MacNN Staff

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Comments

  1. kw99

    Joined: Dec 1969

    0

    This is different how?

    So a vendor sells a Navio-based song with DRM data "digital locker" in the file, and an iPod will play it... why? Does it look like a non-DRM'd file to the iPod, is that why it plays? Is Navio releasing an alternative program to iTunes that can interact with iPods, and transfer files to it based on the DRM restrictions? So many questions. The Macnn article and the linked article do not explain very well. And the article reads like a press release from the company, with the typical anti-Apple spin.

    Products like this acknowledge that Apple and its iPod/iTunes "ecosystem" IS now the standard. This is not competition for the iPod; it is conceding and giving up competing. It is competition for iTunes. And Apple does not compete with iTunes because iTunes is a tool to sell more iPods. The iTunes Music Store itself does not exist to make a large profit (although it may make a nominal profit at this point). So if another company wants to create another tool to help sell iPods, I do not think Apple will mind too much.

    Keep in mind that Apple will continue to negotiate for and sell content via iTMS at break-even pricing, because the purpose of iTunes is to sell more iPods. This "may" provide an option for other content providers, but Apple will still control overall pricing. And once they (the potential Navio customers) evaluate the cost of setting up, promoting, maintaining, and supporting the mechanism to sell content online (and also pay Navio for licensing), they may just let Apple do it with its already successful and reliable system, a system that is in place NOT to make money on sales of content, but to make money on the sales of the content's "player." Apple is being a "middle-man" who only takes "a cut" to cover its operating expenses. As a customer, that seems pretty fair and efficient to me...

  1. LouZer

    Joined: Dec 1969

    0

    pricing

    Keep in mind that Apple will continue to negotiate for and sell content via iTMS at break-even pricing, because the purpose of iTunes is to sell more iPods.

    People are always making this preposterous claim. The problem with it is that it makes no sense. If all Apple wants to do is sell iPods, wouldn't you think they could sell MORE if they supported WMA format on the iPod? How could not supporting a format and selling music themselves be the best solution, when they could say "Hey, buy the iPod. Not only are we cool, but we support every format out there!".

    But, nope, they don't. And now they've started selling videos on iTMS. Is this just to sell iPods? I don't think so. If anything, its to sell more mac minis as half-assed media center devices.

    Apple is trying to make money on both sides of the fence. While hardware is great, its got limited growth. How many people need to keep buying and buying more iPods? However, there's always new music, new video content, new whatever, to sell. In fact, I wouldn't be surprised if Apple is completely reversing their thinking, now driving macs and iPods to push iTMS sales.

  1. kw99

    Joined: Dec 1969

    0

    They do actually...

    "wouldn't you think they could sell MORE if they supported WMA format on the iPod?"

    WMA is supported through iTunes, I believe. WMA with DRM, that's another story. Wouldn't Apple have to pay Microsoft for the "privilege" of supporting WMA DRM? But that's not the real reason...

    Follow the logic here:

    * (If) Apple supports WMA DRM. * Initially, this "may" increase iPod sales slightly, but it also makes other online music providers more successful because they now work with the most popular player, the iPod. * After Apple "voluntarily" helps make WMA-based services more successful, other non-iPod players become more successful because they (by default) work with these now more successful WMA-based services. * In the long run, Apple loses marketshare, not because iPods are any better or worse, but because Apple helped make the competing music players into more viable alternatives.

    With 70-80% marketshare, why would Apple want to go down that road? In an ideal world, Apple wants sell iPods by making them the best choice. They are the best choice partly because of tight integration with iTunes and iTMS. So by default, iTMS is the top online content service and Apple is able to leverage this advantage into deals that make the service better, which helps fuel the iPod marketshare. And so on...

    Apple is a content distributor who can negotiate for the best prices, and then marks up the price only enough to cover operating expenses (and maybe a small profit through volume sales) [BECAUSE THE PURPOSE OF ITUNES AND ITMS IS TO SELL IPODS]. How are customers like me being hurt by this arrangement?

  1. vickys_box

    Joined: Dec 1969

    0

    No restrictions

    ..apart from requiring a Navio-driven website to get the content, and no doubt some kind of connectivity to access the 'digital locker', wherever that may be.

  1. LouZer

    Joined: Dec 1969

    0

    Re: they do actually

    With 70-80% marketshare, why would Apple want to go down that road? In an ideal world, Apple wants sell iPods by making them the best choice. They are the best choice partly because of tight integration with iTunes and iTMS. So by default, iTMS is the top online content service and Apple is able to leverage this advantage into deals that make the service better, which helps fuel the iPod marketshare. And so on...

    So what you're saying is that the iPod is not a superior player, one that would be chosen despite the options, its only will be chosen because the iTMS is the end-all/be-all of stores.

    Apple is a content distributor who can negotiate for the best prices, and then marks up the price only enough to cover operating expenses (and maybe a small profit through volume sales) [BECAUSE THE PURPOSE OF ITUNES AND ITMS IS TO SELL IPODS]. How are customers like me being hurt by this arrangement?

    Exactly how do you know Apple only increases the price to cover expenses (a lot of assumptions that Apple is out working to protect your rights, as opposed to their bottom line). And if you don't know how you're hurt by this relationship, you just will never understand (here's a hint: competition drives prices LOWER, not keeps them the same).

    In fact, if it wasn't for Jobs insistence that music be simply priced [except for long-playing music, which you can only get on an album] at 99 cents each (something they've taken to the video store, which is completely assinine, considering that some content is 5 minutes long, others 45 minutes, and yet they're worth the same?), we'd have music selling for 50 cents to 4 dollars, and then the labels would actually know how many (or few) people want to spend more than a dollar for music. Or even that less pricing would equate to more sales.

    Hey, single pricing works for the oil companies. They all charge one price. Works great for them. Why not for music and Apple! Who cares if the consumer suffers.

  1. eldarkus

    Joined: Dec 1969

    0

    bottom line

    Apple has hte iTMS because it wants the software/hardware combination. That is what Apple is about. Apple doesnt want to support other formats because if other music stores use the iPod, the "it just works" campagin is out the door.

    People want it both ways. They want the ease of use, but they want choices.. you cant have both with technology from several different companies.

  1. Foe Hammer

    Joined: Dec 1969

    0

    It's August, So ...

    ... where's this thing we're supposed to see at the end of June? As of today, their most recent press release on their own website is dated May 23, 2006.

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