This is the first substantive response from Apple to the so-called Harmony technology that underlies the RealPlayer Music Store.  RealPlayer Music Store users can download tracks in their choice of Microsoft Windows Media Audio format, Apple's QuickTime Audio/FairPlay format, and RealNetworks's own RealAudio with Helix DRM.  Real can offer files in Windows Media format because it has licensed Windows Media encoding and packaging software from Microsoft, just as many other online music services have done.  But because Apple does not license its DRM packaging technology, RealNetworks engineers had to figure out how to package content in the appropriate format by independently discovering the details of that format. (Apple's encoding technology is a variant of MPEG-4 AAC, which RealNetworks also uses.)

Now it seems that Apple has built into the firmware of the latest iPods a way of determining if a track was purchased from the RealPlayer Music Store instead of from iTunes, and if so, refusing to play that track. 

It is significant that Apple's response to this situation is through technology rather than litigation. For despite various comments to the contrary, this case has little to do with the anticircumvention provision of DMCA.  DMCA forbids circumventing copy protection; all RealNetworks is doing is creating files that use Apple's copy protection mechanism -- and it is far from clear that Real's engineers had to circumvent anything in order to accomplish this feat. 

Just about everyone in the industry outside of Apple -- including technology companies and content owners -- is bemoaning this decision as hostile to consumers, short-sighted, and a dismal repeat of Apple's insistence on keeping their hardware and software platforms proprietary -- a decision that led to Apple's marginalization in the personal computer market.  Yet there are other issues to consider.  To Apple, its FairPlay DRM technology is not a platform component (as Windows Media DRM is for Microsoft, or as Helix DRM is for RealNetworks); it is merely a feature of the iTunes service.  If Apple allows others to use it (whether by license or not), then it could end up with technical support and legal liability issues that it does not want on its plate. 

Nevertheless, we cannot help but feel that such considerations are small ones in light of the bigger potential that Apple has in the online music market through its iPod devices.  This skirmish with RealNetworks seems contrary to everyone's longer-term best interests, including Apple's own.

(Thanks to Jonathan Feinstein of Krasilovsky & Gross for input into this story.)

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