Apple’s Secret Battle For Music, Movies, And TV.

There is an increasing visible battle raging around Apple, the Mac, the iPod, and soon the iPhone.

It has to do with music, movies, TV shows, distribution and control. Caught in the middle are tens of millions of Mac and Windows users. Who will win the battle?

The battle is more complicated than a grand masters chess game, and with many more players. Suffice it to say that the average Mac and Windows user doesn’t know what’s going on, though, if they knew they would care, perhaps joining the battle.

At the highest level are the big players, jockeying for position in the public mindset, yet working the smoke-filled rooms to enhance shareholder value, increase revenue, maximize profits.

The players include but are not limited to Apple, Microsoft, Sony, Disney, Intel, the music industry, the TV industry, the Cable TV industry, the movie industry, the telecommunications industry. Each wants us to buy more of what they have to sell. Each wants to influence the others and control distribution.

Make no mistake about this raging battle for our minds and money. It’s all about power, control, and money. There will be a number of winners, and some losers.

Apple, by growing the iPod and iTunes Store, and moving to a position of prominence, has upset the balance of power in the status quo.

The company is making dramatic inroads and changes in consumer electronics, PC market share, software, music sales, TV and movie sales, and perhaps soon, the cell phone market.

Many of the media status quo players have been slow to embrace digital technology because they can no longer control distribution and management of their products.

Others, such as Disney, have moved quickly to become a major player in new technology.

Microsoft, expected to become a dominating influence, is seen as a lumbering, if not near comatose giant, losing control of every opportunity afforded a front runner.

Warner CEO Edgar Bronfman demands a cut of the portable music player revenue stream in exchange for allowing their music and media on such players.

Governments and customers demand some measure of interoperability for media purchased online to be played everywhere, in all players and PCs, as it already is with most CDs and DVDs.

Without question, the newest success player is Apple; the iPod, the iTunes Store, perhaps the iPhone. That success scares most traditional status quo players, as Apple and their new products become a disruptive force in the marketplace.

Then there’s digital rights management for media. DRM. Movies already have DRM built in. It’s not easy to copy a movide DVD. You buy it. You play it. Not so with most CDs. Digital quality, easy to copy to Mac, PC, iPod, any portable player.

Most of the music and movie industry wants to maintain the status quo of DRM.

Steve Jobs just announced that he’s in favor of dropping music DRM, though Apple’s DRM, FairPlay, is the defacto standard for Mac and Windows and iPod users. Why would he make that call?

Jobs claims that there are only three scenarios for the future of online music sales: 1 - status quo, with Apple as the leader and defacto standard, 2 - Apple licenses FairPlay DRM to others, thereby maintaining control of the technology and a leadership position, 3 - sell music online without DRM.

The music industry, and to a large extent many other players, media and technology, don’t want #1. Jobs says #2 can’t be done because it’s difficult to manage. Media players may not want #2 because Apple remains the defacto leader. #3 scares the hell out of most media players, music, TV, or movies, and most technology players.

The rest of us, the great unwashed masses of gadgets, music, movies, TVs, just want to buy media (once) and have it play everywhere we choose.

What’s Steve Jobs up to with his call to remove DRM? He’s looking for a win-win-win-win situation. He knows the status quo won’t last, so #1 is out. He also knows that #3 won’t fly with the major music, movie, and TV show media players, so that’s out. What’s left? What’s REALLY behind door #2?

#2 is the objective. Apple wants the entire industry to fall in line behind door #2. Not just music, but TV shows, movies, and the gadgets that play such media. Apple already has a head start. FairPlay as a DRM is the least restrictive, most accessible, most successful in the marketplace, and Apple owns it.

Steve Jobs is leveraging Apple’s dominant DRM position to get all media makers—music, TV, movies—to agree to Apple’s FairPlay as the universal standard. In return, Apple gets all music, TV shows, and movies, in higher quality for the iTunes Store.

Licensing FairPlay everywhere insures interoperability. Media makers get a universal standard that works for them and customers. Apple gets a modest cut of the technology and licensing action, a huge head start in the market place, and a level playing field against every other manufacturer. Everyone except die-hard anti-DRM fanatics wins.

What do you think? Care to share an opinon or two?